Cerrado Gold (TSXV: CERT) has completed its previously announced acquisition of Ascendant Resources (TSX: ASND) this morning. The transaction, which saw Cerrado pay a 14% premium for the Portugal-focused developer, centered around the feasibility stage Lagoa Salgada project.
Under the terms of the arrangement, Ascendant shareholders received one share of Cerrado for every 7.8 shares of Ascendant they held. A total of 27.7 million common shares were issued in connection with the acquisition by Cerrado, alongside 4.9 million replacement options and 1.7 million replacement warrants.
As part of the transaction, Rui Santos, a former director of Ascendant, has been appointed to Cerrado’s board of directors.
Lagoa Salgada is a feasibility stage polymetallic VMS project, which is expected to be the next producing asset within Cerrado’s portfolio. A 2023 feasibility study outlined a net present value of US$147 million alongside an IRR of 39% on an after tax basis for the project, which is based on a mine that would produce on average 124 million pounds of zinc equivalent over the first five years of production at an AISC of just US$0.59 per pound of zinc equivalent.
The study also estimates US$75 million per year in cash flow once operational, while funding requirements are said to be sub-$5 million to deliver a construction decision on the project.
EIA approval at Lagoa is expected to be received in the second quarter, while an optimized feasibility study is scheduled for release in Q3. A construction decision is expected to be made by year end, with initial production expected to occur in H2 2027.
Ascendant shares meanwhile are expected to be delisted from the TSX is connection with the transaction on May 21.
Cerrado Gold last traded at $0.60 on the TSX Venture.
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