Good morning, everybody. My name is Mike McAllister. I'm the Vice President of Investor Relations for Cerrado Gold. Cerrado Gold is not your typical junior mining company. We actually have an asset in production. We have the producing gold asset located in Argentina called Minera Don Nicolás. We'll be producing about 50,000-60,000 ounces of gold there this year. We're also trying to expand the resource and grow the mine life, and we've undertaken a very large exploration program of about 50,000 meters this year. We also have another project, which is a development project in Portugal called Lagoa Salgada. This is a polymetallic, meaning it does have gold and silver, about 40%, probably more than that, is gold and silver.
However, we also have the critical minerals of copper, tin, zinc. Then finally, we have a very large project in Quebec, Canada, called the Mont Sorcier Iron Ore Project. A lot of people think, you know, iron ore, it's not very exciting, but the good thing about this project is it's very high-grade iron ore. It's about 67%, which is in extreme demand, growing at about 10% per annum versus 1% for the regular iron ore market. These other two projects are being advanced, and I'll explain a little more about them as we go forward. One of the things I will say about the company is that we are well set up to move these projects forward without relying on financing from the market.
These projects will move ahead, and we want to see substantial growth in cash flow without diluting our shareholders. I do seek safe harbor. Just the investment highlights of the company. As I mentioned, the project in Argentina will produce about 50,000-60,000 ounces this year. We have put a PEA on the project earlier. It had about a five-year mine life, but we're down to about just under three years now, which is why we're doing the 50,000 meters of exploration plan this year on surface. We're also gonna be doing some drilling underground in a higher-grade area that we've moved to because we're taking most of our production from heap leach. We have heap leach, an open pit exploration, but then we've also moved underground.
We have about 30,000 ounces down there, and we didn't go down for 30,000 ounces. We believe there's a much larger deposit at depth, so we are gonna start probably in June drilling out that deposit at depth, and that's a much higher-grade deposit on the property, which could contribute to not only extended mine life, but also to production increases at the mine. We also have, as I mentioned, the two other projects. Lagoa Salgada, we're looking to have a construction decision in Q3. We're going through permitting now. Hopefully, we'll have that project into construction at the very end of the year, early next Q1. It's about 18 months of construction to see that come to fruition. That would be additional cash flow coming to the company.
Longer term, as I mentioned, the Mont Sorcier Iron Ore Project. This is very high grade, 67% direct reduction. It's suitable for direct reduced iron with green steel transition. It can go right into an electric arc furnace. We're envisioning 8 million tons. It's gonna start with 4 million tons in 2030, and then a few years later, we'll add an additional 4 million tons, bringing it to 8 million tons in total. We had completed a PEA back in 2022 that had an NPV of $ 1.6 billion. We are doing a feasibility study on that project now, and we do expect to see a similar NPV on the property as we move forward. Finally, we have our third quarter numbers here.
We'll be putting out our year-end numbers at the end of the month. Our cash balance for the year will be just in excess of $20 million. We expect with the gold prices this year, our cash costs on gold are between $1,800-$2,000, and we do expect to see our cash balance increase significantly somewhere between, I would say, you know, $60 million-$90 million for the year, depending on the gold price. Significant growth in our cash position going forward. Then we also have some other asset sales where we're still owed some cash, so we have some other cash coming into the balance sheet. We're very well-funded and very well set up that way.
Looking at the properties, as I mentioned, we acquired this mine in 2020. The previous owners could never get it working quite right. They were getting about 17,000 ounces of production a year. We acquired it in 2021. We immediately ramped up production to 42,000 ounces and have got it to that 55,000 ounce average in the last few years, and this year we're looking to go a little bit further. We also have, as I mentioned, Lagoa Salgada. Even when we combined in the polymetallic nature of that project with the gold and silver, we're still gonna be primarily precious metals. Even with today's metal prices, that'll be a higher percentage. But we do have some critical minerals there which feed into the critical mineral strategy for Europe.
They're looking for a supply of critical minerals to support their economy, and this project fits very well into that strategy being located in Portugal. Finally, looking at the company, you know, for where the stock is today, you have cash at the end of the year in excess of $20 million. You have Argentina cash flow. We did our PEA at $2,100 gold, so that's why we have to use that number. But at today's gold prices, you're seeing free cash flow in excess of, you know, $60 million a year on this project. Portugal, you have an NPV of $146 million. Longer-term Quebec, you have an NPV of $1.6 billion.
For a share price of around $1.56, we feel that there's still quite a bit of room to grow in terms of valuation on the stock price. Looking at this from an EBITDA or cash flow perspective, one of the things we are focused on in this company is driving cash flow. We're metal agnostic. We don't care if it's gold or if it's base metals. What we're focused on is growing cash flow in the company. Even if you're looking at these studies here, we're looking at feasibility studies that were done at much lower prices. As I mentioned, $2,100 gold for the project in Argentina. I think Lagoa, we use $1,700 gold. These numbers would be much higher at today's metal prices. But even in the previous study, you're looking at $50 million of EBITDA coming from Argentina.
When you add in Lagoa Salgada in 2028, you'll have north of $100 million of EBITDA. Then when you bring the project in from Quebec in 2030, you're looking at almost half a billion dollars of cash flow per year. Again, at today's metal prices, that would be even higher. To look at this in a very simplified basis, currently we're at 55,000 ounces of gold. If you look at the green arrow at the top, by 2028, we'll be about 100,000 ounces. Then we'll be over 300,000 ounces of gold annually in equivalent production by 2030. We're very excited about the relatively significant growth in a significantly short time period for a mining company. We've been through a bit of a transition. We've been investing in our properties.
We've had over $ 40 million of investments, and we're beginning to start to reap the benefits of those investments. In Minera Don Nicolás, we have heap leach and underground production. We're targeting 55,000-60,000 ounces this year. Then what we're doing now to expand that mine life is we are doing a 50,000-meter surface exploration program. We do expect we're starting to have some very good hits. Hopefully, we'll be able to, in the second quarter, start to come out to the market with some of the results from that, which will show the ability to extend our mine life back towards that six-plus year mine life. Additionally, as I mentioned, there's an area where we went underground. I'll talk about this more in detail later.
This area is a much higher grade, and it's below a previous open pit, much higher grade, and it's open to depth. We're going to drill that off as well. That adds significant opportunity to grow not only the mine life, but also to increase the throughput rate from 50,000-60,000 ounces to 70,000, closer to 100,000 ounces in the next few years. At our Lagoa Salgada project, we expect to be able to complete an optimized feasibility study along with the environmental permit at the end of the second quarter. We expect to get our construction permit by the end of Q3, which would finish construction in early 2027, looking for production mid-year 2028. That would provide, on the previous feasibility study, about $ 75 million of free cash flow.
We know that likely is going to be higher in the upcoming feasibility study just because of higher metal prices and efficiencies we found and a lot of improvement that we've done in the metallurgy of the project. Finally, you have the Mont Sorcier project. That, you know, we're looking to do a bankable feasibility study in Q2. We'll submit our environmental by the end of the year. With that project, we're looking to come into production in early 2030. That project on the previous PEA has a free cash flow of $235 million. However, the updated feasibility study will be looking at $400 million. We would see free cash flow coming from this mine probably in excess of $400 million a year. Very profitable project that we have.
Taking a closer look at Minera Don Nicolás, this is a, you can see the image on the left. It's a little hard to see it, but this presentation is all on our website as well. The purple areas represent all the mineralized areas in Santa Cruz in southern Argentina. It's an area called Deseado Massif, very prolific gold camp. There's not a lot around us. You can see from the picture there's not a lot of vegetation. There's not much around other than the mines. However, we do have some very good neighbors. You can see in the image here on the right, you'll find our mine there, Minera Don Nicolás. To the east of us, we have Cerro Moro, which is Pan American's mine. To the south of us, we have Cerro Vanguardia, which is AngloGold.
To the west of us, we have Cerro Negro, which is Newmont, as well as San José, which is Hochschild and McEwen. These mines have built up significant mineralization of their properties. I like to show on the next slide. You can see here. The Cerro Vanguardia was the first in the area. They started in the early 1990s. By the late 1990s, they had put over 1 million ounces of resource on the property, and they built that up to 6 million. Probably about 8 million ounces have been produced from this area. You're looking over at the next one in Newmont. They also acquired Goldcorp. However, they ramped up production. They started in the underground and then went to open pit, whereas Cerro Vanguardia started with open pit, went to heap leach, and then underground.
Cerro Moro as well, over the course of about five years, built up to about a 2 million ounce deposit. We're the junior player in the game, but the mineralogy is the same across the region. You know, we're not recreating. We're not doing anything that hasn't been done before. We're following a well-trodden path that each of our neighbors have followed. You have to do the drilling, but the resource should build. We would have to be very unlucky not to see our resource increase with the drilling program we're doing this year. What I'm saying is, you know, I'm not going to tell you we're going to be as big as 6 million ounces, but I'm also not telling you we're going to be that big. We need to let the drills give them time to do their thing.
There is the potential for this to be a much larger camp. We would have to be very unlucky to not see any resource and mine life growth at this project. I think as the year continues, the news flow will demonstrate our ability to continue to expand this project. This is just a quick overview of the mine in Argentina. It's a hub and spoke model, so you have a centralized mill that is being fed by different sources. Up to the northwest you have Paloma, which is the previous open pit. It's now going underground, and we're mining underground there. We started in the fourth quarter, and we're continuing through. We'll, you know, we'll be mining there this year. Grades there are much higher.
We're getting grades of 5-8 grams versus, you know, what we're putting on the heap leach of, you know, less than 1 gram. We also have the to the north there you see Las Calandrias Heap Leach, which is where we're taking the open pit material out of the pit and putting it on a heap leach pad, you know, typically 0.7 grams, 0.8 grams. However, we have, you know, a very significant mine life. We're reprocessing some tails there. And the thing we like about this property is it's not hard to recreate these heap leach pads around the property. We have a very large land package, 330,000 hectares, and it's extremely underexplored.
We, as I mentioned, are doing 50,000 meters this year, but we do have a significant opportunity to grow the mine life much longer here. Again, this is the current production coming from the heap leach production. You know, we've been ramping this up. We expect to see about 4,000 ounces, which should be about 50,000 ounces of production coming from the heap leach this year. The underground here is where we'll probably see you know the additional up to 10,000 ounces, which could put us as high as 60,000 ounces this year. The one thing I like to point out is you can see here the very white hatched area. That was the original open pit that was designed at $1,700 gold. Had that been designed today, it would've been much deeper and much longer.
However, mineralization continues at depth and along strike. While we're up just below the underground here, you can see in this image here, this is the open pit. We have three portals. We're mining just below the floor here right now this year. There's about 30,000 ounces here. As I mentioned, we'll mine that out, but that's not why we went underground. We believe this project continues at depth and is much larger. What will happen probably starting in June, we'll start to set up drill platforms and our drills will be turning to drill this up at that depth. We could see significant increase in the mine life and potential production growth from a higher grade material that continues at that depth at Paloma.
As I mentioned, in this, all the blue areas that are here represent all of our concessions. We have 330,000 hectares. For relativity, that's the size of Rhode Island. So, you know, the very large land package, the largest outside of the government. Where we're concentrating the surface drilling are, we have a 10-km strike here of various targets that we're drilling on this year. As I mentioned, probably in Q2, late Q2, we should be able to come to the market starting to show some of the success that we're having in this area. Finally, we have the Lagoa Salgada project, which is located in Portugal. It's a very well-located project. The image here on the right, you can see, the Iberian Pyrite Belt. It's the copper band here.
We're in the northwest corner of it, but there's some very good neighbors. You have Neves-Corvo, which is owned by Vale and used to be owned by Lundin. You also have Aguas Teñidas, which Sandfire owns. Both of these mines recently sold for about $1.8 billion-$1.9 billion. You have mines here such as the Rio Tinto mine, which has been around since the Roman times. Typically mines on this belt are very long-lasting and continue to expand and grow as time goes forward. One thing we also like about Portugal is the excellent infrastructure. We have the state highway run right past our property. The state rail line goes right past. We have multiple ports, airports, and smelters in the region, so it's very well located for that.
We own 80% of this project. When we brought this in, we purchased a company called Ascendant Resources, merged it in, and this added substantial precious and critical minerals, being 40% gold and silver, 27% zinc, 15% copper, 7% tin. One of the things I like to point out too is that, when we look at mines, we look for mines that are in the bottom quartile in terms of cost, but have significant expansion potential. This mine is, for the first five years, we use zinc equivalent 'cause that's the largest independent metal that's produced, but it's $0.59 per zinc equivalent pound for the first five years, $0.79 for the life of mine.
Those are bottom quartile costs you'll see as I show you on a cost curve on the next slide. What we're looking at here is we're looking to finish the EIA by the end of the second quarter, along with the environmental permit and the feasibility. Construction decision will be in Q3. We expect to get RECAPE or the construction approval in Q3. Construction would be in the first quarter with production mid 2028. We're fully funded. We have good backing from UKEF, as well as in this project's case it would be Banco Santander, which would lend for up to 70% of the project's construction costs. The other good thing about this is the other 30%, we can go to offtake, we can go to streams.
There are various ways that we can fund this as well as through our own cash flow. We don't anticipate any need for equity to see this project come to fruition. You can see here the breakdown of the metals. 40% is precious metals, 27% zinc, 15% copper, 7% tin, and we do have some lead here as well, which is still mined. We have a very large mine life. We have, you know, just in the proven and probable, about 50 million tons, but probably about 26 million tons in total. However, that only took 40,000 meters of drilling to achieve that, which is very low. We know that this has already given us about a 14-year mine life on the property.
This is the cost curve of every project out there. That's zinc equivalent. $0.79, which is our life of mine cost, is bottom quartile. $0.59 for the first five years is the very bottom of the cost curve. The thing we like about that is no matter what happens in terms of the metal cycles or pricing, this is a project that'll be around no matter what. It'll always survive. The other thing I like to point out on this project is the ability for this to grow. As I mentioned, when we acquire projects, we like costs that are in the bottom quartile, and we like projects that have significant expansion potential.
Just to give you an example, as you can see on the left of the chart here, Lagoa Salgada, we have two different pods here, the north and the south pod. We believe that there is a third pod here, which was confirmed by a recent European survey and deep penetrating survey, which confirmed that we do have a third ore body here. What happens on this mine, similar to Sandfire, they started with Aguas Teñidas, and they continue to add clusters along strike. At Neves-Corvo, they started with Neves and Corvo, but they've added Lombador at depth. This is all done through penetrating radar.
What I say to you is that while we have two, and at a 1.7 km strike length, this is expected to grow not only at depth but along strike. Looking at the property and the magnetic signatures here, we're working on a 1.7 km strike right now. However, we have an 8-km anomaly on the property. As we continue to drill this property going forward, do expect that we will find a lot more mine life, and this will be a much bigger and a much longer life project than it is in the current feasibility study. The idea here is let's get this into production and then use some of the cash flow to continue to expand and pay for production growth versus diluting our shareholders.
Finally, we have the Mont Sorcier project in Quebec. One of the things we love about this project is we can concentrate it to a high grade, high purity iron ore when you're building iron ore projects, infrastructure typically costs billions of dollars . Where we're blessed here is our project is located in the north about 25 km away from a town called Chibougamau in northern Quebec. The thing we like about this is from the town of Chibougamau, there's a rail head there, and then we have 370 km of rail line. It's a common carrier, CN Rail, it's running about 30% capacity.
We have access to the rail line, which takes you to the deep water port of the Port of Saguenay, which is located off the St. Lawrence River, which is ocean bound. We don't have to build any of that. The only thing we need to build from an infrastructure perspective is a 25 km rail spur. We're very excited about that. It's gonna save us a lot of money in terms of infrastructure costs to build this project. We also have access to low cost hydropower. Quebec has an abundance of hydropower in the project. You can see here in the pictures, that's the Port of Saguenay. That's our mine right there. It's Mont Sorcier. It's essentially a black magnetite mound sticking out of the ground. We strip it and mine it.
At the beginning, the strip ratio is less. It's about 0.5-1, so very favorable. We had done a PEA study back in July 2022 with that project giving us an NPV of $ 1.6 billion and an IRR of 43%. What we were studying at that time was 65% iron ore. Iron ore works in the sense that 61% or 62% is your base, 65% is considered a premium, 67% is considered high purity, and we're at that high purity level. The demand for that product is growing at about 10% per year versus about 1% for regular iron ore.
We have very low levels of silica and alumina, which is something that a lot of the other mines are starting to see more of. This is a very desired product, will be taken up very quickly. The other thing is that, you know, typically you're seeing iron ore trading for about $107 per ton. Today, we get about a 30% premium for this product that we're producing. We'll be seeing around $140 a ton. Our all-in sustaining cost should come in around $45, probably another $10 for shipping. We'll see excellent margins on our product here.
As I mentioned earlier, this was done at a smaller rate, 5 million tons per year at 65, and they were seeing free cash flow of $ 235 million per year. We are now doing 8 million tons in stages, 4 million and then add another 4 million. However, when this is in full production, you'll see cash flow close to the 400 million or 500 million free cash flow coming out of this mine, based on the high purity product that we are producing. We're very excited about this. The one other thing I like to point out is just the timeline here. Again, we're at a feasibility study in Q2. By the year-end, we'll have our environmental submitted. It's about a two-year wait. We'll work through the financing.
We expect to start construction in the second quarter of 2028, with production in the first quarter of 2030. It's a very easy process compared to all the other mines. We're just crushing and concentrating. Again, it's a very large deposit. We have 1.3 billion tons of resource. That 21-year mine life is only on about a third of that resource deposit. Significant opportunity to see this mine continue and grow for, you know, probably 50 years. Again, we're well-funded to deliver. We have over $20 million in the bank at the end of the year. Our financials will be up by around the end of the month. We also have free cash flow coming in excess of $50 million a year at today's metal prices. We also have about $ 15 million owed to us from previous product sales.
We're very well-funded and don't need to dilute. This is the equity model, as I mentioned, the UKEF. We have backing from the export credit agency for spending about 40% of our goods and services there. They guarantee the project. That allows Banco Santander in the case of Portugal or TD Bank in the case of the project in Canada to come and lend debt for about 70% of the project financing, which will typically be very low-cost long-term debt on the project. In terms of the equity, we can include streams, offtakes, and we can include our own capital that we have built, so we can move these projects forward without diluting our shareholders.
Looking at our capital structure, right now we have about 135 million shares outstanding, 150 fully diluted. You're looking at a market cap, probably around $200 million, about $150 million. In terms of research coverage, we have H.C. Wainwright. Heiko Ihle, he covers us. He's got a $ 3.30 target price on us. Red Cloud Securities has got a $ 2.50 target price on us. In terms of ownership, management owns about 12%. We do have some institutions, for about 14%, but we're still primarily held in the retail and have a high free float of about, you know, 75% of the stock in the market at this time. Just to recap, you know, what do we have here?
We have a junior mining company that's already in production and is using that cash flow to grow and advance other projects without diluting its shareholders. By doing that, you know, we're able to get to a place where, by 2030, we should see in excess of half a billion of cash flow without any further dilution to our shareholders. You know, we'll be in a terrific position to then look at other things such as dividends, further acquisition and growth of the company. With that, I will turn it back for any questions. I think we're right at the time. Is there a place people can reach you offline to follow up? Yeah, you can either book a meeting with me through the conference or you can reach out.
If you go to our website, the contact information's there, but it's info@cerradogold.com. I'm the one that picks up that email, and I'm happy to get back with any questions.
Thank you so much.
Thank you.