Cerrado Gold Significantly Increases Grades and Throughput in the Second Quarter to Report Highest Gold Production Levels at the Minera Don Nicolas Mine Since Cerrado's Acquisition

• MDN Mine posts first quarterly operating profit ahead of management target with strong second half anticipated
• MDC reports updated PEA with NPV5 US$617 million with 94% IRR

Toronto, Ontario--(Newsfile Corp. - August 30, 2021) - Cerrado Gold Inc. (TSXV: CERT) (OTCQX: CRDOF) ("Cerrado" or the "Company") is pleased to announce its operational and financial results for the second quarter of 2021 ("Q2/21"). The financial results are reported and available on SEDAR as well as on the company website (www.cerradogold.com).

(All numbers reported in US dollars)

Q2 2021 Minera Don Nicolás ("MDN") Production Highlights:

• Highest quarterly gold production at MDN since Cerrado acquisition
• Record gold production of 9,607 ounces, 28% higher than previous high of 7,485 ounces in Q1 2021
• Average gold head grade of 2.97 g/t; a record high and a 15% improvement over Q1 2021
• 5^th consecutive quarter of throughput improvement since Cerrado acquisition
• Mine operating margin of $2.0 million and operating cash flows of $2.0 million in the second quarter
• MDN on track for strong 2^nd half of 2021

Corporate Highlights

• Announced the appointment of Casper Groenewald as Chief Operating Officer and Kurt Menchen as President and Country Manager of Brazilian operations
• Commenced trading on the OTCQX under the symbol "CRDOF"

Mark Brennan, CEO and Co-Chairman stated: "We are very pleased to report much improved second quarter results of operations at Minera Don Nicolás, which continue to exceed management expectations. The results demonstrate the tremendous effort of the team at MDN. The second quarter saw the company achieve record quarterly production since the acquisition by Cerrado, as well as record throughput rates and head grade."

He continued, "As a result, the Company recorded $2 million in both mine operating margin and operating cash flow during the second quarter. This performance has been in spite of severe COVID-19 restrictions which continue to impose significant interruption to optimizing production and costs. We look to continue to build upon the successful second quarter results to achieve aggressive production objectives for the second half of 2021."

"In addition to the strong operating results, we are extremely pleased with the continued exceptional results from our Monto Do Carmo project in Brazil, where a recently completed PEA released on August 24 highlighted robust economics with an NPV5% of $617Mm and an IRR of 94%. Exploration work continues to further expand resources as we continue to move the project forward."

A summary of key operational and financial performance at MDN for the second quarter 2021 is provided in the table below:

Table 1

To view an enhanced version of this table, please visit:
https://orders.newsfilecorp.com/files/7487/94839_cerradotable1.jpg

MDN Results for 2021 continued to be impacted by various COVID-19 restrictions and by a government mandated shutdown over the holiday period that resulted in the loss of 10 operating days in January. Thereafter, operational results have continued to improve as some restrictions were lifted allowing for a full complement of employees to be housed at site. While mining and processing operations have begun to return normal, previous restrictions have required additional stripping needed to access additional high-grade ore. This was completed in Q2 and has positioned the mine to deliver higher grade ores in Q2 and for the rest of H2/21.

Cerrado has maintained tight onsite protocols to ensure smooth operations, restricting entry and exit from the site without a proper medical affidavit and a quarantine period if deemed necessary. The mine continues to use thermal body cameras and daily temperature checks to detect early COVID-19 symptoms to limit any possible spread. All required COVID-19 protocols remain in place with enforced physical distancing and other safety precautions; enhanced cleaning and sanitizing, use of extra protective gear and remote work policies applied where possible.

Despite these severe added burdens, management has been successful in ensuring its ability to continue operating effectively despite the COVID-19 effects and the additional cost and time to implement enhanced health and safety protocols, and occasional workforce restrictions. MDN is the only mine in Argentina that did not stop operations since the beginning of the Covid epidemic. Mining operations at Minera Don Nicolás ("MDN") have continued to undergo continuous operational improvement implemented since the acquisition of the mine just a year ago (March 2020).

As a result, MDN has seen a significant reduction in the AISC and Cash Costs driven by improved operational performance in all areas of the mine. Operational results are expected to continue to improve strongly over the course of 2021 as the Company reduces low grade feed to the plant and ore grades further improve, leaving MDN well positioned to generate robust operating results and free cash flow for the foreseeable future.

Second Quarter 2021 Operational and Financial Performance at MDN

The Company produced 9,607 ounces of gold and 22,388 ounces of silver during the three months ended June 30, 2021, as compared to 6,865 ounces of gold and 10,938 ounces of silver in the three months ended June 30, 2020. Production is 40% higher in the three months ended June 30, 2021 due to more tonnes mined, higher throughput and higher grade, offset slightly by lower recovery. Production of 9,607 ounces of gold in the second quarter 2021 also represented a 28% improvement over the 7,485 ounces of gold produced in the first quarter of 2021.

The average gold head grade of 2.97 g/t was the highest quarterly head grade recorded since the Cerrado acquisition and represents an 18% increase as compared to the average head grade of 2.52 recorded in the second quarter of 2020. The second quarter gold head of 2.97 g/t also represents a 15% improvement over the 2.59 gold head grade recorded in Q1 2021.

Mill throughput of 106,603 tonnes of ore was also a quarterly record since the Cerrado acquisition and represents a 37% increase in throughput as compared to the second quarter of 2020. The second quarter throughput also represents a 13% increase as compared to Q1 2021.

The Company generated revenue of $17.9 million for the three months ended June 30, 2021, from the sale of 9,744 ounces of gold and 21,881 ounces of silver at an average realized price per gold ounce sold of $1,773 versus the three months ended June 30, 2020, where the Company generated revenue of $9.4 million from the sale of 5,486 ounces of gold and 8,627 ounces of silver. Revenue and sales of gold and silver for the current period was 91% higher than the three months ended June 30, 2020, due the higher realized gold and silver prices, higher mining rate, higher grades and higher throughput. Revenue in the second quarter 2021 also represents a 60% increase as compared to Q1 2021.

Cash operating costs per ounce sold was $1,219 per ounce in the three months ended June 30, 2021, which is the lowest achieved in the last four quarters and third consecutive quarter of improvement. Second quarter 2021 cash operating costs per ounce sold represents a 12% reduction as compared to Q1 2021 and a 27% reduction as compared to Q4 2020.

Second Quarter 2021 Operational and Financial Performance

Net loss for the three months ended June 30, 2021, was $1.8 million as compared to $2.7 million for the three months ended June 30, 2020 an improvement of $0.9 million. The decrease in net loss is primarily a result of a mine operating margin of $2.0 million (an increase in of $0.7 million) and a decrease in general and administrative expenses of $1,1 million, offset by an increase of other expense by $0.9 million. Net loss in the second quarter of 2021 also represented a $3.9 million improvement as compared to Q1 2021.

The Company incurred general and administrative expenses of $1.9 million for the three months ended June 30, 2021, a $1.1 million decrease compared to the general and administrative expenses incurred during the three months ended June 30, 2020. During the three months ended June 30, 2021, the Company had increases in salaries and wages of $0.2 million, consulting fees of $0.1 million which were offset by a decrease of $1.6 million in share-based compensation expense. The increase in salaries and consulting fee expenses were largely the result of an increase in corporate activities required after the acquisition of MDN in 2020. General and administrative expenses were also $0.3 million lower as compared to Q1 2021.

During the three months ended June 30, 2021, the Company incurred other expense of $0.2 million as compared to $0.8 million of other income recorded during the three months ended June 30, 2020. During the three months ended June 30, 2020, short term investments of the company were sold, a contingency provision was reversed, and the application of accelerated sales tax recovery all resulted in one-time gains recorded in other income in the prior period.

Adjusted EBITDA was $1.8 million in the second quarter of 2021 which is a $2.7 million improvement as compared to the $0.9 million adjusted EBITDA loss recorded in Q1 2021. Adjusted EBITDA was $2.4 million in the second quarter 2020, $0.6 million higher than 2021 as a result of non-cash share based compensation added back in 2020.

Basic and diluted loss per share for the three months ended June 30, 2021, was $0.02, compared to the basic and diluted loss per share of $0.06 for the three months ended June 30, 2020, a $0.04 per share improvement as a result of the improved operating performance of the mine in 2021.

Technical Disclosure/Qualified Person

The scientific and technical information in this press release has been reviewed and approved by Sergio Gelcich, P.Geo., Vice President, Exploration for Cerrado Gold Inc., who is a Qualified Person as defined in NI 43-101.

Mark Brennan
CEO and Co Chairman
Tel: +1-647-796-0023
mbrennan@cerradogold.com

Nicholas Campbell, CFA 
Director, Corporate Development
Tel.: +1-905-630-0148
ncampbell@cerradogold.com

About Cerrado Gold

Cerrado Gold is a public gold producer and exploration company with gold production derived from its 100% owned Minera Don Nicolás mine in Santa Cruz province, Argentina. It also owns 100% of the assets of Minera Mariana in Santa Cruz province, Argentina. The company is also undertaking exploration at its 100% owned Monte Do Carmo project located in Tocantins, Brazil. For more information about Cerrado Gold please visit our website at: www.cerradogold.com.

Disclaimer

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

This press release contains statements that constitute "forward-looking information" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation, All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

Forward-looking statements contained in this press release include, without limitation, statements regarding the business and operations of Cerrado Gold. In making the forward- looking statements contained in this press release, Cerrado Gold has made certain assumptions, including, but not limited to ability of Cerrado to expand its drilling program at its Minera Don Nicolás Project and increase its resources. Although Cerrado Gold believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurance that the expectations of any forward-looking statements will prove to be correct. Known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Except as required by law, Cerrado Gold disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise.

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