Cabral Gold Inc. Announces Public Offering of Up to $5 Million Units

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Vancouver, British Columbia–(Newsfile Corp. – May 25, 2022) – Cabral Gold Inc. (TSXV: CBR) (OTC Pink: CBGZF) (“Cabral” or the Company“) is pleased to announce that it has entered into an agreement with Paradigm Capital Inc. on behalf of a syndicate of investment dealers comprising Cormark Securities Inc., Research Capital Corporation and Roth Canada Inc. (collectively, the “Officers“) under which the Agents have agreed to offer for sale on a marketed “best efforts” basis, a total of up to 16,130,000 units (the “Units“) from the Company’s cash, at a price of $0.31 per Unit for aggregate gross proceeds to the Company of approximately $5 million (the “Offer“).

Each Unit will consist of one ordinary share of the Company (a “Ordinary share“) and one-half common share purchase warrant of the Corporation (each whole warrant, one “To guarantee“). Each warrant will entitle the holder thereof to acquire one common share of the Company at a price of $0.50 per common share for a period of 24 months following the closing of the placement (the “Closing“).

In addition, the Company has granted the Agents an option (the “Over-allotment option“) to purchase up to an additional 15% of Offer Units on the same terms exercisable at any time up to 30 days after closing, for market stabilization purposes and to cover over-allotments, the optionally.

The net proceeds of the Offering will be used primarily for exploration and development activities and general working capital purposes.

The Agents will receive from the Company at Closing a cash commission equal to 6.0% of the gross proceeds of the offering (including on any exercise of the Over-Allotment Option), subject to a cash commission reduced equal to 3.0% in respect of any sale of Units to purchasers on a President’s list provided by the Company to the Agents. The Company will also issue to the Agents this number of compensation options (the “Compensation options“) corresponding to 6.0% of the units issued under the placement (including upon exercise of the over-allotment option), subject to a reduced number of compensation options equal to 3.0% in respect of any sale of Units to purchasers on a President’s list provided by the Company to the Agents, each exercisable for one common share at $0.31 for a period of 24 months after closing.

Closing is expected to occur on or about June 15, 2022 and is subject to certain conditions, including, but not limited to, obtaining all necessary corporate and regulatory approvals, including the approval of the Stock Exchange. TSX Venture and the relevant securities authorities.

The Units to be issued under the Offering will be offered by way of a short form prospectus in the provinces of British Columbia, Alberta, Manitoba and Ontario, and may be offered in the United States in in connection with a private placement pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended (the “U.S. Securities Law“), and the securities laws of applicable states, and in jurisdictions outside of Canada and the United States, in each case in accordance with all applicable laws, provided that no prospectus, statement of registration or similar document need not be filed in that jurisdiction.

This press release does not constitute an offer to sell or the solicitation of an offer to buy and there will be no sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under securities laws. of such jurisdiction. This press release does not constitute an offer of securities for sale in the United States. The securities offered have not been, and will not be, registered under United States securities law, and such securities may not be offered or sold in the United States absent registration under such laws. US federal and state securities laws or an exemption applicable to such US registration. terms.

term loan

The Company also announces that it has entered into a term loan agreement with Alan Carter, President and Chief Executive Officer of the Company, pursuant to which Dr. Carter will provide short-term financing to the Company through a unsecured term loan. up to $1,500,000 (the “term loan“). The term loan will be advanced to the Company as required and will bear interest at the rate of 10% per annum. The parties intend that interest on the term loan be repayable in common shares subject to the approval of the TSX Venture Exchange A total of $250,000 of the term loan will be repayable within 90 days of the advance of the funds and the balance plus applicable interest will be repayable no later than December 31, 2022. If the Company repays the $250,000 contemplated above plus an additional $250,000 prior to December 31, 2022, the term loan maturity date may be extended at the Company’s option from December 31, 2022 to March 31, 2023. If the term is so extended, the interest rate will increase to 12.5% ​​retroactive to the date of the original advance on any amount not repaid by December 31, 2022. The proceeds received from the term loan will be used for the advancement of the Cuiú Cuiú project of the Company and for the fund of rou ment and general business needs.

Disclosure of Related Party Transactions

The term loan involves a related party (as that term is defined in Multilateral Instrument 61-101 Protection of holders of minority securities in special transactions (“MI 61-101“)), specifically a director and senior officer of the Company, and constitutes a related party transaction under NI 61-101. This term loan has been determined to be exempt from the requirements of formal valuation and minority shareholder approval of NI 61-101 pursuant to NI 61-101 Sections 5.5(b) and 5.7(1)(a) of NI 61-101, as the Company is not listed or quoted on the one of the exchanges or markets listed in section 5.5(b) of NI 61-101, and the maximum value of the term loan is less than 25% of the market capitalization of the Company.

Revised resource estimate

The company expects to release an NI 43-101 technical report for the Cuiú Cuiú property in Q4 2022. This would include drill holes completed through the end of Q3 2022. The NI 43-101 report is expected to include; a revised resource estimate for the MG gold deposit, an initial resource estimate for the gold-in-oxide MG and PDM covers and an initial resource estimate for the Machichie gold target. Additionally, Central’s current resource estimate, which includes both oxide and subsurface resources, is expected to be updated using revised gold prices and cost estimates, as well as some revisions of existing wireframe models based on recent drilling. The drilling program at Central will not be sufficiently advanced by the end of the third quarter of 2022 to warrant a full new resource wireframe model. It’s not expected before mid-2023.

The Company also plans to complete a Preliminary Economic Assessment (PEA) focused on mining the gold-in-oxide discordant covers and oxidized saprolite subsurface at MG, PDM and Central, using revised and inaugural resources. . Work on the PEA is expected to begin immediately upon completion of the Q4 2022 technical report.

The Company has retained the services of SLR Consulting (Canada) Ltd. (SLR) from Toronto. SLR will prepare the fourth quarter 2022 NI 43-101 Technical Report along with new and revised resource estimates. He will also oversee the upcoming PEA process.

Metallurgical oxide heap leach testing is nearing completion at Kappes Cassiday & Associates in Reno, Nevada. The final report is expected to be available in June 2022.

In light of the current market, management has elected to temporarily suspend the Company’s regional reconnaissance drilling program and focus its efforts and resources on advancing the Company’s short to medium term objectives of update the resource estimate and demonstrate the economic potential of the gold mine – oxide mineralization at Cuiú Cuiú. As a result, the number of rigs on site will drop from five to three, with a corresponding reduction in personnel.

About Cabral Gold Inc.

The Company is a junior resource company engaged in the identification, exploration and development of mineral properties, with particular emphasis on gold properties located in Brazil. The Company owns a 100% interest in the Cuiú Cuiú gold district located in the Tapajós region of the state of Pará in northern Brazil. Two gold deposits have so far been defined at Cuiú Cuiú and contain 43-101 compliant indicated resources of 5.9 Mt at 0.90 g/t (200,000 oz) and inferred resources of 19.5 Mt at 1.24 g/t (800,000 oz).

The Tapajós gold province is the site of the largest gold rush in Brazilian history, producing an estimated 30-50 million ounces of placer gold between 1978 and 1995. Cuiú Cuiú was the largest area of Placer works in the Tapajós and has produced approximately 2 Moz of Placer Gold historically.


“Alan Carter”

President and CEO
Cabral Gold Inc.

Tel: 604.676.5660

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-looking statements

This press release contains certain forward-looking information and forward-looking statements within the meaning of applicable securities laws (collectively, “forward-looking statements”). The use of the words “will”, “expected” and similar expressions is intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in these forward-looking statements. Undue reliance should not be placed on such forward-looking statements. This press release contains forward-looking statements and assumptions relating to the following: strategic plans and future operations, and exploration results. Actual results obtained may differ from the information provided herein due to numerous known and unknown risks, uncertainties and other factors. The Company believes that the expectations reflected in these forward-looking statements are reasonable, but there can be no assurance that these expectations will prove to be correct.

Not for distribution to United States news services or dissemination in the United States

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