Cabral Gold Secures US$45 Million Gold Loan to Fully Fund Heap Leach Starter Operation
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On October 16, 2025, Cabral Gold announced it has secured a US$45 million gold loan from the Precious Metals Yield Fund, an affiliate of its largest institutional shareholder, Phoenix Gold Fund. This loan is intended to fully finance the capital expenditure for its Cuiú Cuiú heap leach gold starter project in Brazil. The loan has a 39-month term, a 10% annual interest rate (capitalized until December 2026), and is repayable quarterly in gold, starting March 31, 2027. The terms are favorable, with no hedging, cash sweeps, or off-take agreements required.
As part of the deal, Cabral will issue 10 million non-transferable warrants to the lender, exercisable at C$0.71 per share for 24 months.
Crucially, with financing secured, the Board of Directors has formally approved the decision to construct the Cuiú Cuiú project. Construction is set to begin on November 1, 2025, with a targeted 12-month build, aiming for the first gold pour by the end of 2026. Upon drawdown, the company expects to have a treasury of approximately US$70 million.
This news is a game-changing, material event that fundamentally de-risks Cabral Gold and marks its definitive transition from an explorer/developer to a funded mine builder.
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Financing Risk Eliminated: The single largest hurdle for any junior mining company is securing project financing. The US$45 million loan not only covers the entire US$37.7 million capex estimated in the July 2025 Pre-Feasibility Study (PFS) but also provides a substantial contingency and working capital buffer. This completely removes the financing overhang that pressures junior developers.
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Validation and Favorable Terms: Securing this debt from an affiliate of the company's largest shareholder is a massive vote of confidence in the project's viability and the management team's ability to execute. The terms are highly favorable for a junior company:
- Non-dilutive: The funding comes as debt, preserving the equity structure for existing shareholders.
- Interest Capitalization: Deferring interest payments until after the expected start of production significantly eases pressure during the high-risk construction phase.
- Flexibility: The absence of hedging, cash sweeps, or off-take agreements provides Cabral with full exposure to the upside in the gold price and operational flexibility.
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Execution of a Clear Strategy: This financing is the culmination of a well-executed strategy outlined over the past year.
- Oct 2024: Released an initial PFS with decent but uninspiring economics (US$25.2M NPV5).
- Q1-Q2 2025: Delivered a string of high-grade drill results (e.g., at Machichie), proving the resource had significant room to grow.
- May 2025: Leveraged exploration success to close a significant C$14.9M equity financing with strategic investor Eric Sprott.
- July 2025: Published a vastly improved updated PFS based on that new drilling, nearly tripling the NPV to US$73.9M while keeping capex flat.
- Oct 2025: Used the robust PFS to secure this full construction financing package.
This systematic de-risking and value creation is precisely what investors look for. The company has consistently met or exceeded its stated goals, building credibility with each step. The formal construction decision now moves the company's value driver from exploration potential to construction execution and, ultimately, cash flow.
Cabral Gold Inc. is a junior mining company focused on the exploration and development of its 100% owned Cuiú Cuiú Gold District project in the Tapajós region of Para State, Brazil. The flagship project is the development of a low-capex, heap-leach "starter" operation targeting near-surface, weathered gold-in-oxide material. The strategy is to use the cash flow from this initial operation to fund aggressive exploration and development of the much larger underlying primary (hard rock) gold resource.