(Kitco News) Cabral Gold is moving toward near-term production in Brazil after securing project financing and advancing construction at its Cuiú Cuiú gold district, positioning the company to transition from developer to producer later this year.
The company expects to declare commercial production in the fourth quarter of 2026 as it builds a phase one oxide operation designed to generate early cash flow while preserving flexibility for longer-term growth. The development is underpinned by a pre-feasibility study released in July 2025, which outlined a low-capex starter mine producing roughly 18,000 to 19,000 oz of gold per year.
The strategy reflects a broader shift among junior developers toward smaller, lower-risk production profiles that can be brought online without significant equity dilution. In Cabral’s case, the approach is supported by near-surface oxide mineralization that allows for simplified mining and processing relative to conventional hard rock operations.
Speaking with Kitco Mining’s Investment Trends, President and CEO Alan Carter said the pre-feasibility study was intentionally modeled using conservative assumptions. “We modeled the project at a gold price of $2,500 an ounce,” Carter said, adding that at that price, the study delivered a 78% after-tax rate of return and projected all-in sustaining costs of about $1,200 per oz.
The pre-feasibility study estimated a capital payback period of about 10 months at a gold price of $2,500 per oz, compared with “probably in the order of about four months” at current prices, according to Carter. He added that construction of the phase one operation remains “on schedule” and “on budget.”
Carter said the phase one mine benefits from near-surface oxide material that can be mined without drilling or blasting and processed without conventional crushing or milling, supporting lower operating costs.
Cabral’s move into construction follows the completion of a $45 million US project financing structured as a gold loan. Carter said the financing involved no equity issuance and was provided by the company’s largest institutional shareholder. “We didn’t issue any shares as part of this financing,” he said.
Under the terms outlined in the pre-feasibility study, approximately 14% of life-of-mine gold production from the phase one operation is allocated to servicing the loan, with the remaining production expected to support operating costs, exploration, and continued project advancement.
While phase one focuses on near-surface oxide material, Cabral’s longer-term growth strategy is tied to expanding the underlying hard rock resource base at Cuiú Cuiú. The company last published a global mineral resource in September 2022 totaling roughly 1.2 Moz of gold and using a gold price assumption near $1,800 per oz.
Since that update, Cabral has drilled approximately 35,000 m and identified several new deposits across the district. Carter said the existing resource is now outdated and that the company plans to publish an updated estimate later in 2026. “It needs to be a significant jump. And it will be a significant jump,” he said.
Exploration is continuing alongside construction, with three drill rigs operating across multiple targets. Carter said cash flow from the phase one operation is expected to support continued drilling and technical work without additional equity dilution. “We are not going to need to dilute this capital structure going forward,” he said.
Looking beyond the oxide starter mine, Cabral is evaluating a second development phase focused on hard rock mineralization that would represent a substantially larger operation, contingent on further resource growth and future technical studies.
For now, the company’s near-term focus is execution, with investors watching construction progress, drill results, and confirmation of first production as Cabral works toward its Q4 target.
Investment Trends Editorial
Investment Trends is sponsored content, articles and announcements paid for by our advertisers that support our journalism. Our sponsored messages are targeted and hand-curated, highlighting the best of what's happening in the mining sector.
