Cerrado Gold Inc. (TSX.V: CERT) reported a 163% year-over-year increase in average realized margin per gold ounce sold to $2,401 for the second quarter ended June 30, 2026. The expansion was driven by higher realized prices and an unhedged gold position, alongside a 35% rise in gold equivalent production to 15,415 ounces.

The company’s total revenue more than doubled to $64.6 million from $29.6 million in Q2 2025. Net income from operations surged to $9.2 million, up from $1.2 million in the prior year period. Adjusted EBITDA reached $28.2 million, compared to $7.4 million previously.

Financial Performance

The significant margin expansion was primarily price-driven rather than cost-driven. Total cash costs per ounce sold remained relatively flat at $1,783/oz, compared to $1,770/oz in Q2 2025. However, the average realized price per gold ounce sold rose sharply to $4,184 from $2,684. This combination pushed the average realized margin from $914 to $2,401.

Gross margin from mining operations tripled to $22.9 million against cost of sales of $41.6 million. Operating cash flow before working-capital movements reached $20.0 million, up from $5.6 million a year earlier. The company ended the quarter with a cash position of $25.3 million.

What the Numbers Show

The divergence between flat cash costs and soaring margins highlights the impact of the company’s unhedged gold position. While operational efficiencies kept direct costs stable at $1,783/oz despite higher labor costs in Argentina, the full benefit of rising gold prices flowed directly to the bottom line. This structural shift, combined with improved silver recoveries at the heap leach operation (from 15% to 76% YoY), significantly enhanced profitability per unit of production without requiring proportional increases in capital expenditure.

Operational Updates

Production at the Minera Don Nicolas (MDN) mine in Argentina benefited from resolved irrigation issues and crushing circuit upgrades. Heap leach production contributed 9,981 GEO, while the Carbon-in-Leach (CIL) plant delivered 5,434 GEO. Silver sales totaled 121,460 ounces at an average price of $62 per ounce.

General and administrative expenses rose to $6.3 million from $2.8 million, largely due to a $2.2 million increase in share-based compensation. Other income included a $5.8 million gain on the remeasurement of the MDN stream obligation and a $2.5 million foreign exchange gain.

Corporate Developments

Subsequent to quarter end, on July 17, 2026, Cerrado closed the repurchase of Sprott Streaming’s metals purchase agreements on both MDN and Lagoa Salgada for aggregate consideration of approximately $31.34 million. This transaction eliminated both streams from the balance sheet, simplifying the capital structure.

At the Lagoa Salgada polymetallic project in Portugal, a court injunction granted in June 2026 suspended unfavorable environmental permitting opinions. However, legal proceedings remain ongoing, pushing the completion of the Optimized Feasibility Study pending permitting clarity.

In Canada, the design scope for the Mont Sorcier high-purity iron project increased to 8 million tonnes per annum (up from 5 Mtpa), reflecting demand for direct-reduction-quality iron ore. The Bankable Feasibility Study is now targeted for H1 2027. A definition drill program is planned for Q3 2026.

Outlook and Projects

Cerrado Gold reiterated its 2026 annual production guidance of 50,000 to 60,000 GEO. Management indicated that results are increasingly likely to land at the higher end of this range as underground development at MDN accelerates. A new Preliminary Economic Assessment and Mineral Resource Estimate for MDN is targeted for Q1 2027.

Management will host a conference call on August 19, 2026, at 11:00 am EDT to discuss these results.

Cerrado Gold Inc. [TSX.V:CERT] (OTCQX:CRDOF) has appointed Chris MacInnis as vice president of geology, effective immediately. MacInnis joins the executive team after serving as director of geology and resources since March 2023.

The appointment aligns with Cerrado’s ongoing exploration activities across its global portfolio. MacInnis brings over 20 years of experience in mineral resource definition and exploration to the role.

Executive Background

MacInnis previously served as head of the mineral resource division at GoldSpot, where he developed AI algorithms to identify exploration targets for precious and critical minerals. Before that, he worked as a senior geologist at SRK Consulting, contributing to dozens of NI 43-101 compliant reports for properties in the US, Canada, and Mexico.

His prior experience includes roles at Datamine Canada and service as an elected board member for the Professional Geoscientists of Ontario. He holds a BSc from St. Mary’s University.

Strategic Context

Mark Brennan, CEO and chairman, highlighted MacInnis’s track record in exploration and resource definition. The company is currently executing a 50,000-meter surface and 20,000-meter underground drill program at Minera Don Nicolas in Argentina. Additionally, Cerrado plans an infill drilling program at the Mont Sorcier project in Quebec.

Equity Compensation

Cerrado issued 325,000 restricted share units (RSUs) to eligible participants under its amended and restated omnibus incentive plan. These RSUs vest over 12 months. Each vested unit entitles the holder to one common share of the company.

What the Numbers Show

The issuance of 325,000 RSUs represents a direct equity-based retention tool for key personnel. With a 12-month vesting period, the grant ties employee incentives to near-term operational milestones, such as the completion of the current drill programs in Argentina and Quebec.