Junior Miner Finds Exceptional Gold Grades in Brazil

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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

Cabral Gold Inc. (CBR:TSX.V; CBGZF:OTCMKTS) announced results in a release on October 22 from a recently completed diamond drill hole at the Pau de Merena (PDM), situated 2.5 kilometers northwest of the Central gold deposit within Brazil's Cuiú Cuiú district.

Diamond drill hole DDH346 intersected 23.3 meters at 4.7 grams per tonne gold (g/t Au) from a depth of 57 meters in hard rock beneath the gold-in-oxide blanket. This includes 1 meter at 91.3 g/t Au and 1 meter at 8.1 g/t Au, the company said.

"The results from diamond drill hole DDH346 at the PDM at Cuiú Cuiú highlight the presence of several very high-grade structures in the intrusive rocks below the gold-in-oxide blanket at PDM," said President and Chief Executive Officer Alan Carter. "These four discrete structures remain open along strike and down-dip."

Carther continued, "Whilst a significantly larger gold-in-oxide occurs at PDM than previously envisaged, there is increasing evidence of down-dip and along strike continuity of the four known zones of primary mineralization within the intrusive rocks below the gold-in-oxide blank. Additional drilling is planned to determine the size of the hard rock gold resource at PDM, which is located only 2.5 kilometers northwest of the central gold deposit."

It is likely the strike extension of the zone intersected in DDH22, which returned 8.5 meters at 5.1 g/t gold, including 0.7 meters at 30.4 g/t gold, the company said. This is one of four zones identified so far in intrusive rocks beneath the gold-in-oxide blanket at PDM.

Drill results are still pending for the Mutum and Machichie NE targets, and diamond drilling is currently underway at the Machichie Main and Jerimum Cima targets, Cabral said.

Carter said the results came soon after the recent announcement of US$45 million construction financing for the Phase 1 operation at the project, which is aimed at the heap leach processing of the near surface gold-in-oxide material at the MG, Machichi Main and Central gold deposits.

"The oxide mater at PDC was not of this PFS study, but these results and more recent drilling at PDM in both the oxide material and the underlying intrusive rocks augurs well for expansion of the global resource base at Cuiú Cuiú," Carter noted.

Details of Results

The PDM target is situated 2.5 kilometers northwest of the Central gold deposit at Cuiú Cuiú within a prominent northwest-trending gold-in-soil anomaly exceeding 0.1 g/t Au, which has been traced for over 5 kilometers along strike and remains open, Cabral said in the release. This trend includes the Central gold deposit, as well as the Central SE, Central North, PDM, and Mutum targets. The current drilling program at PDM aims to increase the gold-in-oxide resource base and establish an initial resource for the mineralized zones in the underlying primary intrusive rocks.

Previous results from initial diamond-drill holes in the granitic basement rocks beneath the gold-in-oxide blanket at PDM include: 22.4 meters at 4.8 g/t gold, featuring 1.35 meters at 62.0 g/t gold, and 11.9 meters at 3.3 g/t gold, including 0.5 meters at 16.1 g/t gold, and 1.2 meters at 16.0 g/t gold in DDH239; and 18.0 meters at 2.5 g/t gold from 92.0 meters, including 3.0 meters at 10.5 g/t gold, in DDH275, according to the company. These higher-grade intercepts occur within brecciated structural zones and mostly remain open at depth and along strike.

Recent drilling at the PDM target expanded the surface area of the gold-in-oxide mineralized blanket by 50%, from 0.26 km² to 0.39 km², and confirmed the existence of four northwest-trending and parallel mineralized zones in the underlying granitic intrusive rocks.

Blyth has rated the stock Speculative Buy and raised his target price from CA$0.65 per share to CA$0.75 per share.

Results were recently received for diamond drill hole DDH346 at PDM, drilled on section 9346907N at a 60-degree angle and an azimuth of 227 degrees, the release said. The hole was designed to test the down-dip continuation of the mineralized zone intersected in DDH237, which returned 1.3 meters at 1.9 g/t gold and 2 meters at 2.4 g/t gold.

Drill hole DDH346 returned 8 meters at 0.3 g/t gold within the colluvial blanket, as well as 22.3 meters at 4.7 g/t gold from 57.2 meters depth, including two higher-grade intervals of 1 meter at 91.3 g/t gold from 57.2 meters depth, and 1.1 meters at 8.1 g/t gold from 72.0 meters depth in highly altered fractured granite intrusive, the company said.

This mineralization occurs in hydrothermal breccia with intense quartz-sulfide veining. The hole also returned 3 meters at 1.2 g/t gold from 92.0 meters depth and 1.6 meters at 0.6 g/t gold from 114.0 meters depth.

The mineralized zone intercepted in DDH346 is almost certainly the same zone intercepted 100 meters to the northwest in hole DDH22, which returned 8.5 meters at 5.1 g/t gold, including 0.7 meters at 30.4 g/t gold. It also suggests that grades are increasing with depth on section 9346907N at PDM, according to Cabral.

Finally, and perhaps most importantly, it suggests the presence of narrow zones of higher-grade mineralization that may be continuous within the underlying intrusive rocks at PDM, the company said. Continuous zones of higher-grade mineralization at Cuiú Cuiú are frequently surrounded by lower-grade envelopes and have also been identified at the MG and Central gold deposits, as well as at the Machichie Main, Machichie NE, and Jerimum Cima discoveries. The mineralized zone intersected in DDH346 remains open down dip and along strike to the southeast and northwest.

Results from drilling at the Mutum and Machichie NE targets are still awaited, while diamond drilling is currently underway at the Machichie Main and Jerimum Cima targets, Cabral noted.

Co. Has 'All the Right Qualities'

In a October 22 flash note on the company, Paradigm Capital Analyst Don Blyth noted that Cabral recently announced that it has secured the US$45 million gold loan to fully fund the construction of the Phase 1 of the project.

The company stated that the financial flexibility provided by this gold loan, along with the recent equity raise of CA$14.9 million, will enable the company to continue its regional exploration drilling program at Cuiú Cuiú during the project's construction, Blyth said.

He called that development and the new results "positive" for the company.

"The PDM target currently has a defined gold-in-oxide resource, but there is not currently any fresh rock resource at PDM, due to insufficient drilling," he said. "The Cuiú Cuiú project may not have enough hard rock resources to justify a standalone mill (aka Phase 2) today but that it is entirely possible, indeed very likely, with additional drilling."

Blyth has rated the stock Speculative Buy and raised his target price from CA$0.65 per share to CA$0.75 per share on August 4. With a price of CA$0.38 at the time, it would mean a nearly 100% return.

On August 11, Bob Moriarty of 321gold.com reviewed the company, which he said "has all the right qualities."

"The company recently unveiled an updated prefeasibility study, regarding the possibility of beginning a mine on the surface oxide resource," Moriarty wrote. "Cabral employs an intriguing funding strategy. Rather than facing repeated private placement fundraising every year or so, they plan to implement a modified technique reminiscent of alluvial mining operations."

He continued, "By focusing on the easily accessible and processable oxide gold directly at surface, they can commence production for approximately US$38 million, with annual processing capacity around 1 million tonnes, offering capital recovery within 10 months plus an NPV on the oxide component of US$74 million, and a post-tax IRR of 78%. The AISC figure sits at US$1,210, based on projections assuming gold is priced at US$2,500."

Moriarty said he greatly appreciated the company's "gradual production approach."

"I've witnessed countless promising junior miners get cornered over recent years, forced into fundraising during unfavorable market conditions, and consequently punishing their most dedicated shareholders," he said. "Their presentation is excellent, and potential investors should review it carefully."

Stewart Thomson of Galactic Updates also shared a positive view on the stock, saying in an October 24 posting, "The chart is absolutely stunning! Stop losses could be used in the 45-cent zone, but the technical action is so firm that investors are unlikely to get stopped out."

The Catalyst: Optimistic Outlook for Gold Despite Volatility

JP Morgan analysts on Thursday reiterated their optimistic outlook for gold, predicting that prices could average US$5,055 per ounce by the fourth quarter of 2026, according to a report by Reuters on October 23.

This forecast is grounded in "demand assumptions that see investor demand and central bank buying averaging around 566 tons a quarter in 2026," according to a note from the bank, the report said.

"Gold remains our highest conviction long for the year, and we see further upside as the market enters a Fed rate-cutting cycle," stated Natasha Kaneva, Head of Global Commodities Strategy at JP Morgan.

After reaching new record highs, metals saw their steepest single-day declines in years, bringing a halt to a months-long rally driven by inflation concerns and central bank buying, as reported by Arslan Ali for FX Empire on October 22.

This downturn was prompted by a stronger U.S. dollar and easing trade tensions between Washington and Beijing, causing traders to unwind their safe-haven positions.

"Gold had several attempts to break higher last week, but resistance near the upper range held firm," said David Morrison, senior market analyst at Trade Nation, according to Ali. "This correction may represent a healthy reset after an overextended run."

However, this doesn't mean the rally is over, as most major banks remain optimistic about gold's future. In addition to the JP Morgan prediction, Bank of America maintained a long position with a target of US$6,000 per ounce by mid-2026, the article noted.

Ownership and Share Structure¹

About 7% of the company is owned by insiders and management, while institutions own about 15%. The rest is retail.

Major shareholders include AMS Asset Management with 5.89%, Aegis Financial Corp. with 4.83%, the CEO Carter with 4.73%, and Director Lawrence Lepard with 1.13%.

It has 276.21 million shares outstanding and a market cap of CA$151.75 million. It trades in a 52-week range of CA$0.17 and CA$0.62.