Serabi Gold plc Serabi Gold Plc- Strong Second Quarter Production Consolidating Mid-year Position With Guidance Maintained.

 
TIDMSRB 
 
   For immediate release 
 
   26 July 2017 
 
   Serabi Gold plc 
 
   ("Serabi" or the "Company") 
 
   Strong second quarter production consolidating mid-year position with 
guidance maintained. 
 
   Serabi Gold plc (AIM:SRB, TSX:SBI), the Brazilian focused gold mining 
and development company, is pleased to report second quarter production 
of 8,148 ounces of gold its Palito/Sao Chico high grade gold operation 
in the Tapajos region of Para State, Northern Brazil. 
 
   HIGHLIGHTS 
 
 
   -- Second quarter production of 8,148 ounces of gold. 
 
   -- Mine production totalled 42,075 tonnes at 7.80 grammes per tonne ("g/t") 
      of gold. 
 
   -- 43,905 tonnes processed through the plant for the combined mining 
      operations, with an average grade of 6.26 g/t of gold. 
 
   -- 1,855 metres of horizontal mine development completed in the quarter. 
 
   -- At the Palito sector, expansion of working areas continues, with 
      development and production now coming from eight veins from the 25 
      included in the geological resource.   The main ramp has now reached the 
      -50mRL, with the G3 vein intersected, the deepest working area in the 
      deposit.  To date grades have been very encouraging. 
 
   -- At the Sao Chico sector, the main ramp has now been deepened to the 40mRL, 
      approximately 200 vertical metres below surface.   Production is coming 
      from the 140mRL and 128mRL levels with levels 116mRL, 100mRL, 86mRL, 
      70mRL and now 40mRL being developed, so development remains well ahead of 
      production. 
 
   -- By the end of the second quarter, surface ore stocks were approximately 
      12,000 tonnes (31 March 2017: 13,000 tonnes) with an average grade of 
      3.15 g/t of gold. 
 
 
   The following link can be used to access an interview by BRR Media with 
Mike Hodgson, CEO discussing the second quarter operational results 
 
   https://www.brrmedia.co.uk/broadcasts-embed/597739289ff3a6521c9fd7ce/event/?livelink=true 
 
 
   Mike Hodgson, CEO, said: 
 
   "Following an excellent first quarter, when the Company produced almost 
10,000 ounces of gold, we have enjoyed a satisfactory second quarter 
with further production of over 8,000 ounces.  With the mid-year total 
standing at over 18,000 ounces, we can be very satisfied with the 
production results for the year to date. 
 
   "Mine production from both the Palito and Sao Chico sectors progressed 
well, although grades were a little lower than scheduled for April and 
May, resulting in the second quarter gold production being lower than 
that of the first quarter.  The lower grades which were behind this, 
were largely a result of an operational issue (as further detailed 
below) in the Sao Chico sector, where planned higher grade stope 
production had to be replaced by lower grade development ore. 
Production improved significantly in June and the operational issue has 
now been fully resolved.   We therefore remain confident that full year 
production guidance will be achieved.  At the Palito sector, production 
remained steady. 
 
   "Overall mining rates of the Sao Chico orebody were in line with 
forecasts though whilst the average grade at 8.30 g/t is very reasonable, 
it was below our budget and less than the 'highs' of the first quarter 
where we mined ore with average grades in excess of 12 g/t.  The reason 
behind this decrease was quite simple.  The stoping method at Sao Chico 
requires the use of remote controlled loaders to muck the broken ore. 
As noted in our first quarter update, stoping has only recently begun at 
the Sao Chico orebody, and therefore we are still in the process of 
building up our fleet.  During the first quarter, we had one new loader 
with a second new unit planned to arrive in June.  Unfortunately the 
first loader, although itself only four months old, suffered a major 
mechanical problem and this impacted significantly on our stope 
production during April and much of May.  As a result, we had to use 
development ore to provide mill feed.   Ore recovered from development 
mining is unavoidably more diluted and is therefore generally lower 
grade.  By June, with the original unit returned to full operation and 
the second new unit commissioned and operating, production improved 
significantly, borne out by 42 per cent of the gold production from the 
Sao Chico orebody for the second quarter of 2017 being achieved in June. 
With the additional development completed in the quarter, making 
available additional stoping blocks, we feel confident, the second 
quarter shortfall will be recovered over the remainder of the year and 
we will meet our full year production guidance of 40,000 ounces. 
 
   "At the Palito orebody, over eight veins are now in various stages of 
development, with production mainly coming from the Pipocas, G3, Senna 
and Jatoba veins.  The G3 vein has now been intersected on the -50mRL, 
our lowest level in the mine, with excellent grades being encountered. 
The other main vein, Pipocas, is now being developed on the 30mRL, and 
it too is exhibiting some excellent long-term potential. 
 
   "In the plant, the quarterly performance was excellent, with 
approximately 43,000 tonnes of run of mine ore ("ROM") milled.  With 
42,000 tonnes mined, the small difference was made up from the low grade 
development stockpile which has shown minimal change between the end of 
the first quarter and the end of this quarter.  We remain mill limited, 
and for this reason we have sought to reduce development rates to try to 
make inroads into these surface stockpiles, though as we can see, the 
mine has continued to generate sufficient ROM. 
 
   "As I reported last quarter, during the latter half of 2016 the Company 
reported that, following the extension of its exploration license 
holdings around the Sao Chico orebody, it had recommenced surface 
exploration, with an IP geophysical survey.   The results revealed two 
excellent anomalies 600 metres to the north and 300 metres to the south 
of the current mining operations, which, from a geophysical perspective, 
look even stronger than the orebody being mined.  These anomalies appear 
to possess a geometry consistent with the known orebody and the 
potential for parallel mineralisation.  These targets are just beyond 
the capability of the underground drill rigs we have, hence we have not 
been able to recommence the programme as planned and will now pursue 
this during the second half of the year. 
 
   "Exploration and evaluation drilling underground continued with 
approximately 2,000 metres of diamond drilling completed.  This drilling 
is focusing on drilling into inferred resources of the down dip 
extension of the Main Vein in the Sao Chico orebody as well as the 
inferred resource in the Senna, Pipocas and G3 veins in the Palito 
sector. 
 
   "Following the excellent first quarter, this second quarter has been 
satisfying given the issues that we faced in April and early May, and I 
am pleased to say the improvement in the latter part of May and an 
excellent June has got things back on track for the year as a whole. 
This improvement has continued in July which to date has also been a 
very good month, so we look forward to a good third quarter.  With the 
dry season upon us, we also hope to see our exploration efforts stepped 
up during the second half of the year." 
 
   Results 
 
   Total production for the second quarter of 2017 was 8,148 ounces of gold, 
generated from the processing of the ROM ore from the Palito and Sao 
Chico sectors, combined with the Palito surface coarse ore and the 
stockpiled flotation tailings accumulated from Palito mine production in 
2014. 
 
   Gold production for the second quarter came from the processing of 
43,905 tonnes of ore at overall combined grades of 6.26 g/t gold, which 
was sourced from mined ore from the Palito and Sao Chico orebodies, 
supplemented with lower grade surface stockpiled ROM and flotation 
tailings.  Mined tonnage for the quarter totalled 42,075 tonnes with a 
grade of 7.80 g/t of gold. 
 
   At 30 June 2017, there were coarse ore stocks of approximately 12,000 
tonnes with an average grade of 3.15 g/t of gold, and approximately 
35,000 tonnes of flotation tails with an average grade of 2.50 g/t of 
gold. This stock is being consumed, albeit not as quickly as forecast, 
and for now the operation remains plant constrained. 
 
   A total of 1,855 metres of horizontal development has been completed 
during the quarter, of which approximately 950 metres was ore 
development.  The balance is the ramp, cross cuts and stope preparation 
development. 
 
   2017 Guidance 
 
   The Company forecast 40,000 ounces of gold production for the year, with 
an AISC of between $950 and $975 per ounce, broadly in line with the 
cost guidance of 2016.  Gold production for the first half remains 
broadly in line with the Company's forecast. 
 
   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 despite the operational challenges faced in April and May, 
production efficiencies and improvements will allow Serabi to meet its 
production guidance. 
 
 
 
 
                       Quarter  Quarter 
                          1        2     Total     H1      H2     Total    Total 
                        2017     2017     2017    2016    2016    2016     2015 
Horizontal 
 development 
 - Palito     Metres     1,669    1,393   3,062   3,810   3,605    7,345    6,800 
Horizontal 
 development 
 - Sao 
 Chico        Metres       582      462   1,044   2,056   1,738    3,794    2,800 
Horizontal 
 development 
 - Total      Metres     2,251    1,855   4,106   5,866   5,343   11,209    9,600 
 
Mined ore - 
 Palito       Tonnes    26,093   27,890  53,983  51,950  66,527  118,477  111,751 
 Gold grade (g/t)         9.07     7.55    8.29   11.18    8.41     9.62    10.05 
Mined ore - 
 Sao Chico    Tonnes    10,825   14,185  25,010  19,202  21,185   40,387   24,096 
 Gold grade (g/t)        12.64     8.30   10.18    8.04   12.00    10.12     8.66 
Mined ore - 

 Total        Tonnes    36,918   42,075  78,993  71,152  87,712  158,864  135,847 
 Gold grade (g/t)        10.12     7.80    8.89   10.33    9.27     9.74      9.8 
 
Milled ore    Tonnes    46,663   43,905  90,568  76,017  82,949  158,966  130,299 
 Gold grade (g/t)         7.09     6.26    6.69    8.37    7.85     8.11     8.43 
Gold 
 production   Ounces     9,861    8,148  18,009  19,667  19,723   39,390   32,629 
 
 
   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 2017 include treatment of 4,042 tonnes of 
      flotation tails (2016 full year: 16,716 tonnes) 
 
 
   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

July 26, 2017 02:00 ET (06:00 GMT)

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