Cerrado Gold Ends Hedging Program, Launches Share Buyback
Event summary
- Cerrado Gold concluded its gold hedging program on January 15, 2026, removing the $3,250/oz ceiling on a portion of its gold sales.
- The company plans to sell 100% of its gold production at near-spot prices going forward.
- Cerrado proposed a normal course issuer bid (NCIB) to buy back up to 6,794,790 common shares, representing ~5% of its outstanding shares.
- The buyback aims to capitalize on what management views as a substantial discount between share prices and underlying asset value.
The big picture
Cerrado's move to unhedged gold sales aligns with a broader industry trend toward capitalizing on high spot prices, while the share buyback reflects confidence in undervalued assets. The strategy positions the company to benefit from both commodity price appreciation and improved shareholder returns, though execution risks remain in volatile markets.
What we're watching
- Profitability Impact
- How the shift to unhedged gold sales will affect Cerrado's margins and free cash flow in a volatile gold price environment.
- Buyback Execution
- Whether the share repurchase can sustain momentum given market conditions and the company's growth plans.
- Commodity Strategy
- The pace at which Cerrado can advance its other projects while maintaining strong liquidity.
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