Latest / Kitco MINING / Cabral Gold Moves Into Production With 50+ Targets Still Untested | Alan Carter

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Cabral Gold Moves Into Production With 50+ Targets Still Untested | Alan Carter · Kitco MINING

• 0:07
  SPEAKER_01: Brazil's newest gold producer.
• 0:09
  SPEAKER_01: Hello and welcome to Kitco Mining with me, Paul Harris, here at the 2026 Precious Metal Summit in Beaver Creek, Colorado.
• 0:15
  SPEAKER_01: Joining me now is Alan Carter, CEO of Cabral Gold, which trades on the TSXV under the ticker CBR.
• 0:22
  SPEAKER_01: Alan, welcome back to Kitco.
• 0:23
  SPEAKER_01: Thanks, Paul.
• 0:24
  SPEAKER_01: Nice to be here.
• 0:25
  SPEAKER_01: Thank you for joining us.
• 0:26
  SPEAKER_01: Looking forward to an update.
• 0:27
  SPEAKER_01: You recently started gold production from the Cuyu Cuyu uh project in the uh in Para in Brazil.
• 0:34
  SPEAKER_01: I think you've just had your second gold pour.
• 0:36
  SPEAKER_01: Um tell us about how the ramp up's going and when you anticipate hitting that all-important commercial production mark.
• 0:42
  SPEAKER_00: Yeah, it's going very well, Paul.
• 0:44
  SPEAKER_00: Um, as you know, um we've brought the project in uh into production two two months ahead of schedule.
• 0:50
  SPEAKER_00: Um so we're very pleased with that.
• 0:52
  SPEAKER_00: Uh you know, um we uh the ramp up is going extremely well.
• 0:57
  SPEAKER_00: Uh we anticipate that we'll be declaring commercial production probably sometime in November.
• 1:01
  SPEAKER_00: It will be the third fourth quarter in line with expectations.
• 1:04
  SPEAKER_00: So uh things are going very well.
• 1:06
  SPEAKER_01: For people that aren't too familiar with the the whole building of mine process, what happens between first gold pool, you know, first production and commercial production?
• 1:15
  SPEAKER_00: Well, the first gold port is part of the commissioning process.
• 1:18
  SPEAKER_00: So commissioning means you've got to figure you're gonna ensure that all your pieces of equipment are running as expected, and that's quite that's no me no uh sort of small task.
• 1:27
  SPEAKER_00: We've got a dry circuit here with a whole bunch of conveyors and different pieces of equipment, and the wet circuit is even more complicated.
• 1:33
  SPEAKER_00: So you we've actually hired a commissioning team out of Perth in Australia to make sure that all this all this uh all the equipment that we purchased runs as according to the specs and uh and there aren't any problems, and they're always teething issues, you've got to optimize uh the throughput.
• 1:50
  SPEAKER_00: So um yeah, it's it's uh it's normal, it usually takes several months.
• 1:54
  SPEAKER_00: So we're we're on schedule.
• 1:56
  SPEAKER_01: Okay, thank you for that sort of sort of detail.
• 1:58
  SPEAKER_01: As you get into commercial production, what does that do for your cash flow forecast vis-a-vis um the the what was stated in the economic study, which obviously had a much lower gold price than we're experiencing today?
• 2:10
  SPEAKER_00: Yeah, well, um obviously the the cash flow is going to be significantly higher than than uh than than uh the model from the PFS study that was done in July 2025.
• 2:21
  SPEAKER_00: And the model that was done in July 25 as part of the Asenko study assumed a gold price of$2,500 an ounce.
• 2:28
  SPEAKER_00: So, you know, we're significantly above that now.
• 2:30
  SPEAKER_00: Um what are we today?
• 2:31
  SPEAKER_00: $4,300 gold, something like that.
• 2:33
  SPEAKER_00: So it will throw off quite a bit of cash.
• 2:35
  SPEAKER_00: I mean, just to give you some guidance, in the first 12 months of of production, we anticipate producing around about 25,000 ounces of gold.
• 2:42
  SPEAKER_00: We won't give full guidance for 27 until probably the beginning in probably early January, uh, because we're still ramping up here.
• 2:50
  SPEAKER_00: Um but I think around about 25,000 ounces a year in year one, that is going to actually grow significantly moving forward.
• 2:58
  SPEAKER_00: But um the all-in cash cost um as per the PFS study was about all-in-sustaining cost was uh$1,210 a US ound.
• 3:06
  SPEAKER_00: So the current gold price prices current gold price pool, there's a significant margin here.
• 3:12
  SPEAKER_00: Um the operation next year should throw off about$75 million US dollars in free cash.
• 3:16
  SPEAKER_00: So it's a it's a good it's a really good start.
• 3:18
  SPEAKER_00: We are going to be expanding it though, as I said.
• 3:20
  SPEAKER_01: Okay, this could be a good moment in time to talk a little bit about economics and money.
• 3:24
  SPEAKER_01: Um, given what you've just mentioned, what does that do to your payback time?
• 3:28
  SPEAKER_00: Uh it shortens it considerably.
• 3:30
  SPEAKER_00: The PFS study at$2,500 gold on our gold loan uh was 10 months.
• 3:35
  SPEAKER_00: We actually borrowed a little bit more than the actual capital cost from the PFS study, but at$3,500 an ounce, that uh$38 million capital cost was shortened to six months.
• 3:46
  SPEAKER_00: So we should be able to pay the gold loan down pretty quickly.
• 3:49
  SPEAKER_00: Uh it is a 39-month term, um, but we are anticipating on sort of accelerating that and being able to pay that loan down uh sooner.
• 3:57
  SPEAKER_00: As you know, the current cash balance of the of the company before any gold sales here um is uh 55 million Canadian currently, and that that's going to be going up because we are selling uh the first the first production here.
• 4:10
  SPEAKER_00: So um we are in a position to pay that gold loan down a lot more a lot faster than uh than the actual current term.
• 4:18
  SPEAKER_01: Okay, and that's the$45 million gold loan you took out with one of your largest shareholder.
• 4:23
  SPEAKER_01: Correct.
• 4:23
  SPEAKER_01: Um so that that's good news to be able to sort of pay back debt quicker, isn't it?
• 4:27
  SPEAKER_01: Um how how does the how does the mechanics of the gold loan how does that work out?
• 4:32
  SPEAKER_01: Do you actually give them the gold?
• 4:33
  SPEAKER_01: Do you give them the cash in lieu of the gold?
• 4:35
  SPEAKER_00: No, no, no, we pay it in in bullion.
• 4:38
  SPEAKER_00: So we we are just finalizing the details of that.
• 4:41
  SPEAKER_00: Uh the first interest payment is due at the end of December, and then there's another interest payment and uh principal payment on the gold loan due in March.
• 4:49
  SPEAKER_00: As I said, we'll probably pay that down quicker, but we're finalizing the details.
• 4:53
  SPEAKER_00: But it is it's a gold loan.
• 4:54
  SPEAKER_00: So we borrowed gold, we converted most of that gold to cash, kept some of the gold in gold, but uh uh we have to pay uh uh uh the precious metals fund back in in gold.
• 5:05
  SPEAKER_01: Okay, so as the gold price goes back, you're still paying the same amount of gold, the same quantity of gold, but obviously that gold is worth more.
• 5:13
  SPEAKER_01: Is there any uh scope to sort of perhaps renegotiate those terms, or it is what it is and you just have to it is what it is.
• 5:19
  SPEAKER_00: It was it was a very good deal um at the time, there's 10% interest, which was a very competitive interest rate.
• 5:25
  SPEAKER_00: So you're right, as the gold price goes up, the dollar value of the gold loan um goes up.
• 5:31
  SPEAKER_00: The amount of gold we're paying stays the same.
• 5:33
  SPEAKER_00: But don't forget, Paul, so does the amount of money we're making.
• 5:36
  SPEAKER_00: And so uh the amount of money we're making is way more than actually the the the increase in the in in the actual value of the dollar value of the gold.
• 5:45
  SPEAKER_00: So um we you know both sides win.
• 5:48
  SPEAKER_01: Okay.
• 5:48
  SPEAKER_01: Uh as you face the possibility of the gold price continue to increase, i i can you to a certain extent offset some of that with financial instruments?
• 5:55
  SPEAKER_00: We could.
• 5:56
  SPEAKER_00: Uh I don't think we're gonna need to do that, but um you know potentially we could, but uh as I said, I think we'll uh be able to pay that loan down fairly quickly.
• 6:06
  SPEAKER_01: Okay, excellent.
• 6:07
  SPEAKER_01: So let's look a little bit further ahead into the future.
• 6:10
  SPEAKER_01: You've uh made a new discovery at uh Jeremy Msima, that's not yet in the resource base.
• 6:15
  SPEAKER_01: Um, given the strength of the results you have there, what what is the plan and perhaps the timeline to get those into resource and perhaps into production scenario?
• 6:23
  SPEAKER_00: Yeah, well the current resource base indicated and inferred at at QUQU is about 1.2 million ounces roughly.
• 6:30
  SPEAKER_00: Um that was last updated as a global resource update was last done on all the deposits at QUQUU four years ago in September 22.
• 6:39
  SPEAKER_00: We're currently in the process of updating that, so by the end of this year, we expect to update that uh resource.
• 6:46
  SPEAKER_00: Back in 2022, we modeled three gold deposits, we're currently modeling six, and Jerry Moonsima is one of those.
• 6:52
  SPEAKER_00: So um we're on track.
• 6:54
  SPEAKER_00: I think that'll be a significant catalyst.
• 6:55
  SPEAKER_00: We are expecting the resources to grow significantly.
• 6:58
  SPEAKER_00: I think they're gonna keep growing every year, and now that we're in production, we will be issuing a resource statement on an annual basis.
• 7:05
  SPEAKER_00: So um I think there'll be continual growth growth moving forward beyond the end of this year.
• 7:11
  SPEAKER_01: Okay, so um the it sounds like the resource base is going to continue to increase and expand.
• 7:16
  SPEAKER_01: So, what how does that feed into your plans for possible expansion at Cuyu Cuyu?
• 7:21
  SPEAKER_00: Well, we have um we have mentioned uh in recent weeks that we are planning on expanding the phase one uh mine.
• 7:28
  SPEAKER_00: So just to backtrack a little bit, we are developing Cuyukuyu in two stages.
• 7:32
  SPEAKER_00: We've built the phase one mine, and the phase one mine is mining the saprolytic material, i.e.
• 7:37
  SPEAKER_00: the weathered material, which is about 60 meters thick from surface.
• 7:40
  SPEAKER_00: Now, below that, most of our gold resources, about 75% of that 1.2 million ounces is in the hard rock below that saprolite.
• 7:46
  SPEAKER_00: So phase one, which is in production now, is to mine that saprolite.
• 7:50
  SPEAKER_00: Phase two is to mine the hard rock material.
• 7:53
  SPEAKER_00: Obviously, if by year end we're significantly growing both the oxide resources and the hard rock resources, that will mean that uh that that gives better confidence around expansion.
• 8:05
  SPEAKER_00: We are planning on expanding the initial oxide phase one operation that's in production now and doubling that production over the next uh year or so.
• 8:13
  SPEAKER_00: Um so we'll be putting out some guidance to the market and how we're going to do that in the next uh few weeks.
• 8:17
  SPEAKER_00: So is that going from 3,000 tons per day to six thousand tonnes per day?
• 8:20
  SPEAKER_00: That's the objective, Paul, yes.
• 8:22
  SPEAKER_00: And also, I think in all likelihood we'll be commencing a PA on phase two, which is the much larger hard rock uh mining operation which is coming along behind.
• 8:31
  SPEAKER_00: So that's also very exciting.
• 8:32
  SPEAKER_00: I think hopefully by this time next year we'll be chatting about the results of the PA on the much bigger phase two mine.
• 8:38
  SPEAKER_00: Um so it'll be an exciting 12 months.
• 8:41
  SPEAKER_01: You've got a lot on your plate, Alan.
• 8:43
  SPEAKER_01: You you brought the the mine into production earlier than planned, ahead of schedule.
• 8:47
  SPEAKER_01: Um if that sort of trend continues with the plans you've got for expansion, does that mean you have to start looking about okay, what comes next?
• 8:56
  SPEAKER_01: You know, a broader time horizon, what comes next for the company beyond the phase one expansion, beyond the phase two expansion, the hard rock?
• 9:03
  SPEAKER_00: Yeah, yeah.
• 9:03
  SPEAKER_00: I mean, obviously it changes things when you're a gold producer, even when you're a small producer like we are, um it it definitely changes things.
• 9:11
  SPEAKER_00: We are starting to turn our attention to look at other potential assets.
• 9:15
  SPEAKER_00: Uh our focus is is on QUQU right now.
• 9:18
  SPEAKER_00: We control an entire district, but um, you know, once you're in cash flow and you're producing gold, you it it does it does throw up other opportunities.
• 9:26
  SPEAKER_00: So we'll take a look at those and and we may or may not pursue other things.
• 9:30
  SPEAKER_00: The focus will remain though, uh let's be clear, on on QUQU, which is an entire district.
• 9:35
  SPEAKER_00: As I've said to you before, Paul, we've got over 50 targets here that we need to test outside of the six gold deposits that we're modelling now.
• 9:43
  SPEAKER_00: And those 60 targets aren't sort of geophysical targets where we don't know if there's gold there or not.
• 9:48
  SPEAKER_00: Those are 50 targets where we've either found gold in drill holes, trenching, or boulder fields.
• 9:54
  SPEAKER_00: I mean, there are boulder fields at QUQU that we've not had any money to explore, which are averaging sort of 90 grams a ton.
• 10:00
  SPEAKER_00: There's one boulder field that averages 91 grams a ton.
• 10:03
  SPEAKER_00: There's another one five kilometres away that's averaging 75 grams a ton gold, not silver.
• 10:08
  SPEAKER_00: So there's a lot to do on the district scale.
• 10:10
  SPEAKER_00: We've got six rigs running.
• 10:12
  SPEAKER_00: That's gonna that aggressive exploration program will continue into next year.
• 10:16
  SPEAKER_00: We still need to set the expiration budget for next year.
• 10:18
  SPEAKER_00: We've hired a uh a new guy called Elton Pereira, who is one of Brazil's top expiration geologists.
• 10:23
  SPEAKER_00: He's had a fantastic career.
• 10:24
  SPEAKER_00: He's found a number of gold and nickel deposits.
• 10:27
  SPEAKER_00: We're very excited to have Elton on board.
• 10:29
  SPEAKER_00: So there'll be a lot of exploration results moving forward.
• 10:32
  SPEAKER_00: So it's gonna be an exciting 12 months because we're gonna be expanding phase one, giving guidance on the much larger phase two operation, but at the same time, we're gonna have our uh the pedal to the metal, so to speak, on the expiration program.
• 10:45
  SPEAKER_00: And as I said, we've got a lot of very, very compelling exploration uh targets, 50 plus, and I'm sure other ones are gonna come up the more money and the more effort that we put into that regional exploration program, you know, which has suffered, to be honest, because we haven't had the capital to to do the work on it.
• 11:02
  SPEAKER_00: But now, being in cash flow, we've got more than enough money to actually do all those targets justice.
• 11:08
  SPEAKER_00: So I mean I can't wait.
• 11:09
  SPEAKER_00: I can't wait.
• 11:10
  SPEAKER_00: It's gonna be an incredibly exciting time.
• 11:12
  SPEAKER_01: Well, that's fantastic, Alan.
• 11:13
  SPEAKER_01: And uh I I guess it perhaps gives you a champagne problem.
• 11:17
  SPEAKER_01: You can have very strong news flow.
• 11:19
  SPEAKER_01: You've got a lot going on, so you've got the potential to have very strong news flow.
• 11:22
  SPEAKER_01: But given that you've got 50 targets, you're ramping up exploration.
• 11:26
  SPEAKER_01: There's I think there's sometimes the danger that um uh the clarity of the messaging can suffer because so much is going on, you're putting out so much news, it can be confusing.
• 11:35
  SPEAKER_01: And obviously, the the key thing is you've got a mind that's in production, that's presumably the bread and butter.
• 11:40
  SPEAKER_01: The exploration is upside, but managing how that that that messaging gets out, that communication gets out, so the message stays clear.
• 11:47
  SPEAKER_01: Um, that's uh gonna be a new challenge for you.
• 11:50
  SPEAKER_00: Yeah, absolutely, Paul.
• 11:51
  SPEAKER_00: It will be because with you know 50 targets, 50 different names.
• 11:53
  SPEAKER_00: We're not gonna be uh uh working on all 50.
• 11:56
  SPEAKER_01: Do you know how much I butcher cuyus?
• 11:59
  SPEAKER_00: Yeah, yeah, no.
• 12:01
  SPEAKER_00: Yeah, some of these targets have completely unpronounceable names, so that will be a challenge.
• 12:07
  SPEAKER_00: I'm gonna do my best, guys.
• 12:08
  SPEAKER_00: Um as you know, I put out um some CO notes on the on the various press releases trying to sort of like simplify it in four or five bullet points.
• 12:16
  SPEAKER_00: So that will continue, but we are working on other sort of um methods of trying to simplify what's happening in our district.
• 12:24
  SPEAKER_00: But it is a large district, there's gold all over the place, there's a lot of targets here, um, and and that is a challenge to sort of like uh simplify the message.
• 12:33
  SPEAKER_01: Okay, a lot going on, Alan.
• 12:35
  SPEAKER_01: So let's end our conversation if we can.
• 12:37
  SPEAKER_01: If you can recap what are the key catalysts our viewers should watch out for from capital gold for the next 12 to 18 months.
• 12:43
  SPEAKER_01: Yeah.
• 12:43
  SPEAKER_00: Uh the key catalyst this year will be uh achieving commercial production, updating that global resource estimate, uh um uh some guidance on how we're gonna expand that phase one and the timeline and the costs and how we're gonna do that.
• 12:59
  SPEAKER_00: Uh, that's this year.
• 13:00
  SPEAKER_00: Obviously, expiration drilling is continuous, six rigs running uh this year.
• 13:05
  SPEAKER_00: We don't know what the programme will be next year.
• 13:07
  SPEAKER_00: We haven't set the budget yet, but it'll be at least six rigs moving forward.
• 13:10
  SPEAKER_00: It may be more than that.
• 13:11
  SPEAKER_00: Looking into 2027, I think uh the expansion of phase one and the doubling of production will be another key cap key cap key uh catalyst.
• 13:21
  SPEAKER_00: I hope by this time next year we'll have doubled the capacity from the phase one uh operation, the heat beach mine we've just built.
• 13:27
  SPEAKER_00: I think the PA results on the phase two, the much larger project coming along behind, will be very exciting too.
• 13:33
  SPEAKER_00: Again, similar sort of time frame about 12 months from now.
• 13:36
  SPEAKER_00: So um, those are the key catalysts.
• 13:38
  SPEAKER_00: As I said, it's gonna be an exciting time.
• 13:40
  SPEAKER_01: Excellent.
• 13:40
  SPEAKER_01: Well, congratulations on becoming a gold producer.
• 13:43
  SPEAKER_01: Alan Carter, thank you very much for joining me today.
• 13:45
  SPEAKER_01: Thanks, Paul.
• 13:46
  SPEAKER_01: And once again, Cab will grow gold trades on the TSXB under the ticker CBR.
• 13:52
  SPEAKER_01: We have a lot more to come from the 2026 Precious Metal Summit, so stay tuned and don't forget to hit that subscribe button.
• 13:58
  SPEAKER_01: I'm Paul Harris, and this is Kitco Mining.