Serabi Gold plc Fourth Quarter Update On Serabi's Gold Operations, Reporting Record Annual Production For 2016 And Exceeding ...

 
TIDMSRB 
 
   For immediate release 
 
   23 January 2017 
 
   Serabi Gold plc 
 
   ("Serabi" or the "Company") 
 
   Fourth quarter update on Serabi's gold operations, reporting record 
annual production for 2016 and exceeding guidance 
 
   Serabi Gold plc (AIM:SRB, TSX:SBI), the Brazilian focused gold mining 
and development company, reports record annual production of almost 
40,000 ounces of gold, exceeding guidance and provides an operational 
update for the fourth quarter of 2016 on its wholly owned Palito and Sao 
Chico gold operations in the Tapajos region of Para State, Northern 
Brazil. 
 
   HIGHLIGHTS 
 
 
   -- Record annual full year production of 39,390 ounces of gold, exceeding 
      guidance and representing a 19 per cent improvement compared with the 
      2015 calendar year. 
 
   -- New exploration licences at Sao Chico have been acquired immediately to 
      the east and west of the deposit, offering excellent opportunity to 
      expand the deposit, with exploration already underway. 
 
   -- Gold production of 9,413 ounces for the fourth quarter of 2016 (Q3 2016 - 
      10,233 ounces). 
 
   -- Mine production totalled 44,579 tonnes: 
 
   --  34,611 tonnes at a grade of 7.38 grammes per tonne ("g/t") of gold from 
      Palito. 
 
   --  9,968 tonnes at a grade of 14.38 g/t of gold from Sao Chico. 
 
   -- 40,485 tonnes of ore processed through the plant for the combined mining 
      operations, at a combined grade of 7.60 g/t of gold. 
 
   -- 2,624 metres of horizontal mine development completed in the quarter with 
      1,928 metres completed at Palito and 696 metres at Sao Chico. 
 
   -- During the quarter, the installation of a new carbon regeneration kiln 
      was completed, this is now effectively regenerating 'fouled' carbon and 
      early results suggest significant improvement in gold recoveries. 
 
   -- At Palito the development of the Senna vein is continuing, the sublevels 
      are being developed on 250mRL, 237mRL, 225mRL, 210mRL and ramping down to 
      the 180mRL.  At Palito Main Zone, the main ramp has now reached the 
      -50mRL, where the G3 vein has been intersected and is ready to be 
      developed. 
 
   -- At Sao Chico the main ramp has now been deepened to the 71mRL , some 170 
      vertical metres below surface. 
 
   -- During the fourth quarter, a total of 2,814 metres of underground diamond 
      drilling was completed across both sites.  At Sao Chico, a combination of 
      exploration and evaluation drilling, totalling 1,267 metres was completed, 
      mostly drilling the inferred resource blocks below the 86mRL.  At Palito, 
      a total of 1,547 metres of mostly exploration drilling was completed, 
      principally drilling the inferred resource blocks on the Senna vein below 
      the 200mRL. 
 
   -- At the year end, the combined surface stockpiles at Palito and Sao Chico 
      totalled 21,000 tonnes of ore with an average grade of 4.0 g/t of gold. 
 
 
   Mike Hodgson, CEO, said: 
 
   "We are delighted to have exceeded our production guidance with a total 
of 39,390 ounces of gold being produced for the year which also 
represents the highest annual gold production from Serabi's operations 
in the Tapajos region.  The final three months of the year saw another 
steady quarter of production of approximately 9,400 ounces of gold, to 
compliment the gold production of the previous three quarters and 
demonstrating the continued dependable performance of the business. 
 
   "The mines have performed well.  At Palito the operation continues to 
perform steadily, although extracted mine grade during the quarter was 
lower than planned as a result of ore being 'cemented' in two stopes. 
This ore is not lost, and is being slowly recovered, but not as fast as 
we had budgeted.  The production shortfall was partially compensated by 
more development ore, albeit with a lower gold grade.  This resulted in 
a Palito head grade for the quarter of 7.4 g/t of gold, compared to 9.5 
g/t of gold for the previous quarter.  However, the benefit of this ore 
development is that the mine is now generating ore from four sectors, 
Senna, Chico da Santa, G3 and Pipocas with Senna playing an ever 
increasing role in our production plan.  Production from stoping has not 
commenced there but, in 2017, we will see a significant level of ore 
being produced from stoping at Senna. 
 
   "At Sao Chico, ore development and production continued in line with our 
plans and grades were excellent, returning over 14 g/t for the quarter. 
The main ramp has now reached the 70mRL with the Main Vein intersected. 
Development continues on the 100mRL, 86mRL and the new 70mRL.  Stoping 
is focused on the final blocks on the 186mRL, 156mRL and 140mRL. 
 
   "As reported last quarter, the plant saw the introduction of the third 
mill during Q3. This was primarily acquired to establish much needed 
contingency in the plant and to reduce the impact of unforeseen 
mechanical problems, essential in a moderately remote operation such as 
ours. In October and again in December the importance of this 
contingency planning was demonstrated.  In both months we suffered 
short-term breakdowns, and the ability to maintain throughputs rates by 
having a third mill was therefore invaluable. An additional short term 
benefit of three mills operating has been the increased throughput 
capacity, allowing us to consume the low grade surface stock that had 
built up over the past three years. 
 
   "Approximately 2,800 metres of diamond drilling was completed across the 
Palito and Sao Chico Mines during the quarter.  The drilling at both 
sites was a combination of exploration and evaluation drill holes.  At 
Palito, activities were principally focused on drilling the inferred 
resource blocks that lie down-dip below the current development levels 
in the Senna and Pipocas veins, whilst at Sao Chico, drilling focused 
upon the Main Vein below the lowest current development level at the 
70mRL down to the -50mRL.  At Senna, the results were generally good, 
showing strong down-dip continuity in thickness and grade.  Whilst this 
sector does not share quite the same high grades as seen in the Palito 
Main Zone, the structure appears to be geometrically regular, which 
benefits mining, and intersected grades are in the 6.0 g/t to 9.0 g/t 
range over widths generally in excess of one metre.   At Sao Chico, a 
total of 1,300 metres of down dip-drilling also gave satisfying results. 
In each case the Main Vein was intersected, confirming the strong 
structural continuity with a good range of grades being reported. 
 
   "The quarter saw surface exploration recommence at Sao Chico.  As 
reported last quarter, we acquired the exploration license to the west 
and south of the Sao Chico Mine last year, and we are very keen to test 
the potential continuation of the Sao Chico Main Vein into these areas. 
During the quarter, we commenced a surface Induced Polarization ("IP") 
programme to the west and south, and although poor weather caused the 
work to be suspended it is expected that it will restart during the 
second quarter of 2017.  The purpose of the programme is to use IP to 
trace the trend of the Main Vein, which has sufficient sulphides to 
provide a clear conductivity anomaly, which in turn, will be targeted in 
a subsequent drill programme. 
 
   "Since commencing operations in 2014, Serabi has shown steady, modest 
growth, and whilst this past year we have had to face some pretty strong 
economic headwinds in terms of gold price and the strengthening of the 
Brazilian Real, operationally we have had a terrific year.  With both 
mines operating well, drilling ongoing and exploration recommencing, I 
look forward to providing regular updates in a year where we hope to see 
improving margins." 
 
   Results 
 
   Total production for the fourth quarter of 2016 was 9,413 ounces of gold, 
generated from the processing of the run of mine ("ROM") ore from the 
Palito and Sao Chico Mines, combined with the Palito surface coarse ore 
and the stockpiled flotation tailings accumulated from Palito mine 
production in 2014. 
 
   Gold production for the fourth quarter came from the processing of 
40,485 tonnes of hard rock ROM ore from the Palito and Sao Chico Mines 
with an average grade of 7.60 g/t of gold.  The total mined ore for the 
same period was 44,579 tonnes with an average grade of 8.95 g/t of gold. 
In addition to the ROM ore, a further 3,039 tonnes of flotation tailings 
with a grade of 3.82 g/t of gold was processed through the cyanidation 
plant. 
 
   At 31st December 2016, there were coarse ore stocks of approximately 
21,000 tonnes with an average grade of 4.0 g/t of gold, and 
approximately 22,000 tonnes of flotation tails with an average grade of 
2.5 g/t of gold. Despite the plant expansion to three ball mills during 
the third quarter, the easy and rapid ore development of the Senna vein, 
particularly due to its proximity to surface, has meant increasing stock 
levels during this quarter. 
 
   A total of 1,928 metres of horizontal development has been completed 
during the quarter at the Palito Mine, of which 1,172 metres is 
represented by ore development, with the balance being on the 
development of ramps, cross cuts and stope preparation.  At the Sao 
Chico Mine a total of 696 metres of horizontal development was completed, 
of which 266 metres represents ore development, with much of the balance 
being ramp development and cross cuts reflecting the on-going deepening 
of the mine. 
 
   2017 Guidance 
 
   With 39,390 ounces of gold produced for 2016, the Company feels 
confident it can forecast expected production for 2017 of 40,000 ounces 
at an AISC of between $950 and $975 per ounce, which is in line with the 
cost guidance of 2016. 
 
   The 2017 guidance of 40,000 ounces is an eight per cent improvement on 
Serabi's initial guidance for 2016 which was 37,000 ounces. Management 
hope that, with the production efficiencies and improvements that can be 
implemented in 2017, Serabi will again be able to improve on its 

production guidance, as it did in 2016, where the Company exceeded its 
initial guidance by 6.5 per cent to produce 39,390 ounces. 
 
 
 
 
                        Quarter  Quarter  Quarter   Quarter 
                           1        2        3         4       Total    Total 
                         2016     2016      2016      2016     2016     2015 
Horizontal 
 development 
 - Palito     Metres      1,900    1,910     1,607     1,928    7,345    6,800 
Horizontal 
 development 
 - Sao 
 Chico        Metres      1,025    1,031     1,042       696    3,794    2,800 
Horizontal 
 development 
 - Total      Metres      2,925    2,941     2,649     2,694   11,209    9,600 
 
Mined ore - 
 Palito       Tonnes     26,752   25,198    31,916    34,611  118,477  111,751 
 Gold grade (g/t)         11.84    10.48      9.52      7.38     9.62    10.05 
Mined ore - 
 Sao Chico    Tonnes     10,794    8,408    11,217     9,968   40,387   24,096 
 Gold grade (g/t)          9.00     6.81      9.88     14.38    10.12     8.66 
Mined ore - 
 Total        Tonnes     37,546   33,606    43,133    44,579  158,864  135,847 
 Gold grade (g/t)         11.02     9.56      9.61      8.94     9.74      9.8 
 
Milled ore    Tonnes     36,615   39,402    42,464    40,485  158,966  130,299 
 Gold grade (g/t)          8.58     8.17      8.08      7.60     8.11     8.43 
 
 
   1. Gold production figures are subject to amendment pending final agreed 
      assays of the gold content of the copper/gold concentrate and the gold 
      bullion when smelting and refining processes are completed. 
 
   2. Gold production totals for 2016 include treatment of 16,716 tonnes of 
      flotation tails. 
 
 
   This announcement is inside information for the purposes of Article 7 of 
Regulation 596/2014. 
 
   Enquiries: 
 
 
 
 
Serabi Gold plc 
Michael Hodgson                           Tel: [phone] 
Chief Executive                           Mobile: [phone] 
 
Clive Line                                Tel: [phone] 
Finance Director                          Mobile: [phone] 
 
Email: [e-mail] 
Website: www.serabigold.com 
 
Beaumont Cornish Limited 
 Nominated Adviser and Financial Adviser 
Roland Cornish                            Tel: [phone] 
Michael Cornish                           Tel: [phone] 
 
Peel Hunt LLP 
 UK Broker 
Matthew Armitt                            Tel: [phone] 
Ross Allister                             Tel: [phone] 
 
Blytheweigh 
 Public Relations 
Tim Blythe                                Tel: [phone] 
Camilla Horsfall                          Tel: [phone] 
 
 
   Copies of this announcement are available from the Company's website at 
www.serabigold.com. 
 
   Neither the Toronto Stock Exchange, nor any other securities regulatory 
authority, has approved or disapproved of the contents of this 
announcement. 
 
   GLOSSARY OF TERMS 
 
   The following is a glossary of technical terms: 
 
   "Au" means gold. 
 
   "assay" in economic geology, means to analyze the proportions of metal 
in a rock or overburden sample; to test an ore or mineral for 
composition, purity, weight or other properties of commercial interest. 
 
   "development" - excavations used to  establish access to the mineralised 
rock and other workings 
 
   "DNPM" is the Departamento Nacional de Produção Mineral. 
 
   "grade" is the concentration of mineral within the host rock typically 
quoted as grams per tonne (g/t), parts per million (ppm) or parts per 
billion (ppb). 
 
   "g/t" means grams per tonne. 
 
   "granodiorite" is an igneous intrusive rock similar to granite. 
 
   "igneous" is a rock that has solidified from molten material or magma. 
 
   "Intrusive" is a body of igneous rock that invades older rocks. 
 
   "on-lode development" - Development that is undertaken in and following 
the direction of the Vein 
 
   "mRL" - depth in metres measured relative to a fixed point - in the case 
of Palito and Sao Chico this is sea-level.  The mine entrance at Palito 
is at 250mRL. 
 
   "saprolite" is a weathered or decomposed clay-rich rock. 
 
   "stoping blocks" - a discrete area of mineralised rock established for 
planning and scheduling purposes that will be mined using one of the 
various stoping methods. 
 
   "vein" is a generic term to describe an occurrence of mineralised rock 
within an area of non-mineralised rock. 
 
   Qualified Persons Statement 
 
   The scientific and technical information contained within this 
announcement has been reviewed and approved by Michael Hodgson, a 
Director of the Company. Mr Hodgson is an Economic Geologist by training 
with over 26 years' experience in the mining industry. He holds a BSc 
(Hons) Geology, University of London, a MSc Mining Geology, University 
of Leicester and is a Fellow of the Institute of Materials, Minerals and 
Mining and a Chartered Engineer of the Engineering Council of UK, 
recognising him as both a Qualified Person for the purposes of Canadian 
National Instrument 43-101 and by the AIM Guidance Note on Mining and 
Oil & Gas Companies dated June 2009. 
 
   Forward Looking Statements 
 
   Certain statements in this announcement are, or may be deemed to be, 
forward looking statements. Forward looking statements are identified by 
their use of terms and phrases such as "believe", "could", "should" 
"envisage", "estimate", "intend", "may", "plan", "will" or 
the negative of those, variations or comparable expressions, including 
references to assumptions. These forward looking statements are not 
based on historical facts but rather on the Directors' current 
expectations and assumptions regarding the Company's future growth, 
results of operations, performance, future capital and other 
expenditures (including the amount, nature and sources of funding 
thereof), competitive advantages, business prospects and opportunities. 
Such forward looking statements reflect the Directors' current beliefs 
and assumptions and are based on information currently available to the 
Directors. A number of factors could cause actual results to differ 
materially from the results discussed in the forward looking statements 
including risks associated with vulnerability to general economic and 
business conditions, competition, environmental and other regulatory 
changes, actions by governmental authorities, the availability of 
capital markets, reliance on key personnel, uninsured and underinsured 
losses and other factors, many of which are beyond the control of the 
Company. Although any forward looking statements contained in this 
announcement are based upon what the Directors believe to be reasonable 
assumptions, the Company cannot assure investors that actual results 
will be consistent with such forward looking statements. 
 
   ENDS 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Serabi Gold plc via Globenewswire 
 
 
  http://www.serabigold.com 
 

(END) Dow Jones Newswires

January 23, 2017 02:00 ET (07:00 GMT)

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