Serabi Gold plc Serabi Gold Plc :third Quarter Update On Gold Operations At Palito And Sao Chico

 
TIDMSRB 
 
   For immediate release 
 
   17 October 2016 
 
   Serabi Gold plc 
 
   ("Serabi" or the "Company") 
 
   Third quarter update on gold operations at Palito and Sao Chico 
 
   Serabi Gold plc (AIM:SRB, TSX:SBI), the Brazilian focused gold mining 
and development company, provides an operational update for the third 
quarter of 2016 on its wholly owned Palito and Sao Chico gold operations 
in the Tapajos region of Para State, Northern Brazil. 
 
   HIGHLIGHTS 
 
 
   -- Record quarterly gold production of 10,233 ounces for the third quarter 
      of 2016 (Q2 2016 - 9,896 ounces). 
 
   -- Increase in the full year production guidance to approximately 39,000 
      ounces of gold representing a 5 per cent improvement compared with its 
      previous guidance of 37,000 ounces for the year. 
 
   -- Mine production totalled 43,133 tonnes, a 28 per cent increase over the 
      preceding quarter. 
 
          --  31,916 tonnes at a grade of 9.52 grammes per tonne (g/t) of gold 
             from Palito. 
 
          --  11,217 tonnes at 9.88 g/t of gold from Sao Chico. 
 
   -- 42,464 tonnes of ore processed through the plant for the combined mining 
      operations. 
 
 
   -- 2,649 metres of horizontal mine development completed in the quarter with 
      1,607 metres completed at Palito and 1,042 metres at Sao Chico. 
 
   -- With the third ball mill operational from the end of the second quarter, 
      along with a second flotation line and enhancements in the carbon in pulp 
      ("CIP"), work has commenced on the installation of a new carbon 
      regeneration kiln which should be completed in the early part of the 
      fourth quarter. The kiln will regenerate 'fouled' carbon and enhance gold 
      recoveries. 
 
   -- These plant enhancements have increased plant capacity from 380-400 
      tonnes per day (tpd) to over 500 tpd.  This additional capacity of 
      approximately 100 tpd is being used to consume the surface stockpile as 
      much as practicably possible. 
 
   -- Sao Chico has now been deepened to the 86m level, some 150 vertical 
      metres below surface.  The ramp is continuing at a slower rate to the 71m 
      level. 
 
   -- During the third quarter, underground exploration drilling continued at 
      both sites.  At Sao Chico the first 17 holes of a 6,000 metre programme 
      were completed.  The programme is testing the continuity of the central 
      ore-zone below the current deepest workings at 86m down to level -20m. 
 
   -- At the end of the third quarter, the combined surface stockpiles at 
      Palito and Sao Chico totalled 11,000 tonnes at an average grade of 3.3 
      g/t of gold. 
 
 
   The following link can be used to access an interview with Mike Hodgson, 
CEO discussing the third quarter operational results 
 
   https://www.brrmedia.co.uk/broadcasts-embed/57ff4fa94ef34929294b9111/event/?livelink=true&popup=true 
 
 
   Mike Hodgson, CEO, said: 
 
   "This has been the Company's best quarter since operations commenced, 
with over 10,200 ounces of gold produced.  We have already produced more 
than 30,000 ounces in the current year and barring any unforeseen 
circumstances, remain comfortably on target to exceed our original 
production guidance by the year end. 
 
   "In the mines we have had a good quarter. At Palito the underground 
operation continues to perform well, mined grades for the quarter 
averaged over 9.5 g/t of gold.   Ore is now being sourced from four 
sectors, Senna, Chico da Santa, G3 and Pipocas with Senna in particular 
providing some very encouraging results.  Whilst this area had been 
drilled no underground mining had previously been undertaken but, with 
six headings now being advanced there, it has become a significant 
contributor to Palito ore production. 
 
   "At Sao Chico, ore development and production has continued as planned. 
The main ramp has now reached the 86m level and the Main Vein 
intersected.  Development ore is now being generated on the 156m level 
heading east, the 100m level heading west and the new 86m level. 
Stoping is focused on the 186 and 156 metre levels. 
 
   "In the plant, we are seeing the benefit of the third ball mill.  The 
introduction of this third mill was primarily to establish much needed 
contingency into what was a congested and mill limited operation, and 
being a moderately remote operation, was an essential improvement.   An 
additional short term benefit has been the increased throughput capacity 
which is allowing the Company to consume the low grade surface stock 
that has built up over the past three years.  We now have ore milling 
rates in excess of the mining rates and expect to consume most of the 
stock by year end. 
 
   "As mentioned in the second quarter update, underground exploration 
drilling at Sao Chico commenced during the second quarter with the 
objective of testing the down dip continuation of the central ore shoot 
below the 100mRL down to the level -20mRL.  To date, some 2,500 metres 
of a 6,000 metre programme have been drilled, with 17 holes completed. 
The drilling has intersected the Main Vein in all 17 holes which is 
excellent news, and is confirming our belief that the Sao Chico Main 
Vein, is a  regional shear structure.  This news bodes well for the 
continuation and strike extension outside the immediate and current mine 
limits. 
 
   "On that last point I am also pleased to report that we have commenced 
mine site exploration programmes at both sites.  At Sao Chico we are 
investigating the potential strike extensions of the Sao Chico Main Vein 
to the east and west.  Having recently completed the acquisition of the 
surrounding exploration licenses and secured land access we are now able 
to undertake this work, the first stage of which involves a ground 
geophysics Induced Polarisation ("IP") survey. 
 
   "At Palito new exploration activity is also underway.  Since 2012 
exploration work has been 'parked' whilst efforts were concentrated on 
getting the operation underway and performing well.  However, during the 
last quarter, we have undertaken a programme of 'down the hole' 
electromagnetic geophysics, testing some 19 holes drilled into the three 
mine site discoveries made in 2012.  This technique is an excellent tool 
for better targeting sulphide rich zones that are usually gold bearing, 
which in turn allow us to better define a follow up drilling programme 
that would be undertaken during 2017.  Proving up of new discoveries 
around our existing operations provides both the opportunity to 
replenish resources and extend mine life and the potential to develop 
increased mining operations that could increase gold production rates. 
 
   "The results of our geophysics are not available as yet, but I look 
forward to providing an update shortly." 
 
   Results 
 
   Total production for the third quarter of 2016 was 10,233 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 third quarter came from the processing of 42,464 
tonnes of hard rock ROM ore from the Palito and Sao Chico Mines with an 
average grade of 8.08 g/t of gold.  The total mined ore for the same 
period was 43,133 tonnes with an average grade of 9.61 g/t of gold.  In 
addition to the ROM ore, an additional 2,174 tonnes of flotation 
tailings with a grade of 4.1 g/t of gold was processed through the 
cyanidation plant. 
 
   At 30 September 2016, there were coarse ore stocks of approximately 
11,000 tonnes with an average grade of 3.30 g/t of gold, and 
approximately 25,000 tonnes of flotation tails with an average grade of 
2.5 g/t of gold. The plant expansion completed in this last quarter, 
with mill number three now operational, provides sufficient incremental 
capacity to process most of this stockpiled material during the 
remainder of 2016. 
 
   Approximately 1,600 metres of horizontal development has been completed 
during the quarter at the Palito Mine, of which 972 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 1,042 metres of horizontal development 
was completed, of which 494 metres represents ore development, with much 
of the balance being ramp development and cross cuts reflecting the 
on-going deepening of the mine.  Mine production from Sao Chico was 
11,217 tonnes of ore extracted, at a grade of 9.88 g/t of gold, an 
increase in tonnage and grade on the previous quarter of 33 per cent and 
45 per cent respectively, reflecting an increasing proportion of ore 
being generated from stoping as opposed to development. 
 
   2016 Guidance 
 
   With 29,900 ounces of gold produced during the first three quarters of 
2016, the Company feels confident it can positively revise the expected 
production for the full year to 39,000 ounces, representing an 
improvement of approximately 5 per cent on its previous guidance of 
37,000 ounces. 
 
   The Company notes that as reported in its operational update for the 
second quarter (issued on 18 July 2016), the Brazilian Real has 
strengthened significantly against the US Dollar since the beginning of 
2016 and since July 2016 has continued to trade between the range of 
BrR$3.20 and BrR$3.25 to US$1.00.  This 20 per cent strengthening 
continues to impact on the Company's reported dollar costs.   The 
operational costs expressed in Brazilian Reals, have remained consistent 
throughout the year. 
 
 
 
 
                                                            Nine       Nine 
                         Quarter 1  Quarter 2  Quarter 3   months     months 
                           2016       2016       2016       2016       2015 
Horizontal 
 development 
 - Palito     Metres         1,900      1,910      1,607      5,417      4,837 
Horizontal 
 development 
 - Sao 
 Chico        Metres         1,025      1,031      1,042      3,098      2,074 
Horizontal 

 development 
 - Total      Metres         2,925      2,941      2,649      8,515      6,911 
 
Mined ore - 
 Palito       Tonnes        26,752     25,198     31,916     83,866     84,798 
 Gold grade (g/t)            11.84      10.48       9.52      10.55      10.44 
Mined ore - 
 Sao Chico    Tonnes        10,794      8,408     11,217     30,419     17,090 
 Gold grade (g/t)             9.00       6.81       9.88       8.72       8.22 
Mined ore - 
 Total        Tonnes        37,546     33,606     43,133    114,285    101,888 
 Gold grade (g/t)            11.02       9.56       9.61      10.06      10.07 
 
Milled ore    Tonnes        36,615     39,402     42,464    118,481     96,480 
 Gold grade (g/t)             8.58       8.17       8.08       8.27       8.75 
Gold 
 production 
 (1)          Ounces         9,771      9,896     10,233  29,900(2)     24,704 
 
 
   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 13,227 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

October 17, 2016 02:01 ET (06:01 GMT)

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