Cassiar Gold Corp. (TSXV: GLDC, OTCQX: CGLCF)
Revitalizing the Cassiar Gold District in British Columbia, Canada
Cerrado Gold (TSX.V: CERT, OTCQX: CRDOF) announced on Monday that it will acquire all the issued and outstanding shares of Ascendant Resources (TSX: ASND) that it does not yet own. Once the transaction is complete, Cerrado Gold will hold an 80% stake in Ascendant Resources’ Lagoa Salgada project located in Portugal.
On Monday afternoon in Toronto, Cerrado Gold’s stock price fell by 10%, while Ascendant Resources’ stock declined by 8%. Both companies currently have market capitalizations of approximately C$45 million and C$10.3 million, respectively.
According to the terms of the deal, Ascendant shareholders will receive one common share of Cerrado for every 7.8 Ascendant shares held. Following completion, Ascendant shareholders will collectively own about 21% of the outstanding shares of Cerrado. Cerrado will issue an additional 27.7 million shares for the transaction, bringing its total outstanding shares to approximately 131.3 million.
The Lagoa Salgada project is a volcanogenic massive sulphide (VMS) deposit located in the mineral-rich Iberian Pyrite Belt. It is recognized for being a highly advanced, long-life, and low-cost polymetallic asset. According to Cerrado, gold and silver account for approximately 34% of the project’s net smelter return (NSR). In 2023, Ascendant Resources completed an NI 43-101-compliant feasibility study on Lagoa Salgada, which outlined an after-tax net present value (NPV) of $147 million and an internal rate of return (IRR) of 39%. The project is expected to generate approximately C$75 million in annual free cash flow during its first five years of operation.
Mark Brennan, CEO of Cerrado Gold, stated that the acquisition of Lagoa Salgada is an opportunity to add a world-class, low-cost asset with strong cash flow potential and significant value. This move will support Cerrado’s long-term growth plans without compromising the company’s financial health or current operations. Additionally, the Lagoa Salgada project has been designated a “Project of National Interest” by the Portuguese government. Approval of its recently submitted Environmental Impact Assessment (EIA) is expected in the coming months.
Ascendant Resources is currently advancing an optimized feasibility study for the project, which is expected to further enhance its economic prospects and enable a construction decision by the end of the year.
