Serabi Gold plc Serabi Gold Plc : Audited Results For The Year Ended 31 December 2017

 
TIDMSRB 
 
   For immediate release 
 
   29 March 2018 
 
   Serabi Gold plc 
 
   ("Serabi" or the "Company") 
 
   Audited Results for the year ended 31 December 2017 
 
   Serabi (AIM:SRB, TSX:SBI), the Brazilian focused gold mining and 
development company, today releases its audited results for the year 
ended 31 December 2017. 
 
   Key Financial Information 
 
 
 
 
SUMMARY FINANCIAL STATISTICS FOR THE THREE AND TWELVE 
 MONTHSING 31 DECEMBER 2017 
                  3 months to       12 months to        3 months to       12 months to 
                31 December 2017   31 December 2017   31 December 2016   31 December 2016 
                      US$                US$                US$                US$ 
Revenue               12,224,818         48,449,868         10,472,823         52,593,751 
Cost of Sales          8,407,318         32,965,498          7,077,485         32,906,426 
Depreciation 
 and 
 amortisation 
 charges               2,919,436         10,465,283          1,832,637          8,384,738 
Gross profit             898,064          5,019,087          1,562,701         11,302,587 
 
(Loss) / 
 profit 
 before tax          (1,408,368)        (1,745,503)          (435,552)          1,870,179 
(Loss) / 
 profit after 
 tax                 (1,627,274)        (2,397,903)          2,958,630          4,430,292 
Earnings per 
ordinary 
share 
(basic)            (0.230) cents      (0.343) cents        0.423 cents        0.659 cents 
 
Average gold 
price 
received                US$1,265           US$1,244           US$1,207           US$1,245 
 
                                                                 As at              As at 
                                                      31 December 2017   31 December 2016 
Cash and cash 
 equivalents                                                 4,093,866          4,160,923 
Net assets                                                  60,770,712         63,378,973 
 
Cash Cost and 
All-In 
Sustaining 
Cost 
("AISC") 
                                                          12 months to       12 months to 
                                                      31 December 2017   31 December 2016 
Gold 
 production 
 for cash 
 cost and 
 AISC 
 purposes                                                       37,004             39,390 
 
Total Cash                                                      US$799             US$770 
 Cost of 
 production 
 (per ounce) 
Total AISC of                                                 US$1,071             US$965 
 production 
 (per ounce) 
 
 
   Financial Highlights 
 
 
   -- Cash Cost for the year of US$799 per ounce. 
 
   -- All-In Sustaining Cost for the year of US$1,071 per ounce. 
 
   -- Gross profit from operations of US$5.0 million for 2017. 
 
   -- Post tax loss of US$2.4 million reflecting lower gold production and 
      increased amortisation and depreciation charges resulting from exchange 
      variations and larger mining fleet. 
 
   -- Loss per share of 0.34 cents for 2017. 
 
   -- Cash holdings of US$4.1 million at 31 December 2017 (31 December 2016 : 
      US$4.2 million) 
 
   -- Average gold price of US$1,244 received on gold sales in 2017. 
 
   -- Concluding a new US$5 million loan with Sprott Resource Lending 
      Partnership ("Sprott"). 
 
 
   2018 Guidance 
 
 
   -- Management does not anticipate a major shift in mine performance and 
      therefore hard rock gold production, in 2018 compared with 2017.  However, 
      with the ability to process increased levels of stockpiled flotation 
      tails in 2018, management expects that gold production for 2018 will 
      exceed that of 2017 and be up to 40,000 ounces 
 
 
   Post year End Highlights 
 
 
   -- Additional US$3 million loan with Sprott to take total loan to US$8 
      million 
 
   -- Announcement of equity financing raising US$15 million through an 
      investment by Greenstone Resources, a new long-term supportive 
      shareholder. 
 
 
   Operational Highlights 
 
 
   -- The acquisition of Chapleau Resources Ltd and its wholly owned 376,000 
      ounce Coringa gold deposit. 
 
   -- Total gold production for 2017 of 37,004 ounces. 
 
   -- Commencement of an initial 8,000 metre surface drill programme at Palito 
      in December 2017. 
 
   -- Completion of new estimation of Mineral Reserves and Resources for the 
      Palito Mining Complex.  Total Mineral Reserves estimated at 181,000 with 
      total Mineral Resources of 538,000 ounces. 
 
   -- Mine production totalling 168,876 tonnes at 8.92 grammes per tonne 
      ("g/t") of gold. 
 
   -- 172,565 tonnes processed through the plant for the combined mining 
      operations, with an average grade of 7.11 g/t of gold. 
 
   -- 9,864 metres of horizontal mine development completed in the year. 
 
   -- Successful test work to evaluate the benefits or ore-sorting to improve 
      process plant efficiency. 
 
   -- Palito development and production continues to focus on the four main 
      sectors of Senna, Pipocas, G3 and Mogno, whilst in the Sao Chico orebody, 
      the main ramp has now reached level 10mRL, approximately 245 vertical 
      metres below surface. 
 
 
 
   Mike Hodgson, CEO of Serabi commented, 
 
 
 
   I am very pleased to report another solid year for Serabi and with the 
future growth that the Company now anticipates over the coming years 
from the development of the Coringa gold project and resource growth and 
resultant production from the Palito Mining Complex the outlook is very 
exciting. 
 
 
 
   Small producers like Serabi, need to exercise strong control over their 
cost base and maximise the efficiencies of their assets to protect 
themselves from the economic factors that are beyond their control. To 
this end it is pleasing to see that production costs have slightly 
reduced year-on-year by 2.7% more than offsetting the effects of 
inflation and exchange rate movements. We continue to look at ways to 
improve efficiency and make our assets work harder and better, looking 
to improve gold production whilst keeping costs at least static. 
 
 
 
   Gold production in 2017 was down compared with the preceding year with a 
consequential impact on revenue and gross profit. However, the equipment 
commissioning issue that gave rise to a slight fall in production in the 
second quarter of 2017 is now well behind us, we have delivered two 
subsequent quarters of solid gold production and we expect gold 
production for 2018 to return to around or even slightly above that of 
2016. I hope that the favourable gold price and exchange rate that we 
have enjoyed during the first quarter of 2018, can continue and we will 
be able to enjoy a successful year. 
 
 
 
   The benefit of the reduced levels of debt that the Company held during 
2017 are reflected in a significantly lower level of finance costs and 
whilst administration expenses rose year on year, these do reflect one 
off costs associated with the work undertaken on the acquisition of 
Chapleau Resources at the end of the year as well as the NI 43-101 
technical report including the new resource and reserve estimation that 
was released in December 2017. 
 
 
 
   Following the end of the year we have taken steps to improve the 
financial strength of the Company. The US$15 million share subscription 
by Greenstone Resources, a private equity fund dedicated to supporting 
mining operations, announced in March 2018, provides the Company with 
the necessary capital to advance its ambition to become a 100,000 ounce 
producer in the relatively near term. This growth through a combination 
of a successful development of the Coringa project and internal growth 
at Palito and Sao Chico which can generate further new production can be 
significantly advanced with this new injection of capital, supplemented 
by the cash flow that we can generate from our existing operations. 
 
 
 
 
 
   Chairman's Statement 
 
 
 
   Serabi's core business is high grade gold production, and I am pleased 
to say that 2017 was another solid year from an operational perspective. 
Whilst production was marginally lower than 2016, a total of over 37,000 
ounces in 2017 was more than satisfying.    With both the Palito and Sao 
Chico orebodies in production at planned levels, and some gold 
production upside as we step up the treatment of gold bearing flotation 
tails generated during the first year of production in 2014, we expect 
2018 to be slightly better and return approximately 40,000 ounces of 
gold production.  Another highlight of the year was, of course, our 
acquisition of the neighbouring Coringa gold project.  Coringa has 
always been an obvious acquisition for us. It is very much a Palito 
look-a-like requiring the same approach, project development, mining and 
processing we employ at Palito, so Serabi's management and team is well 
placed to bring this project into production in the next 24 months.  We 
have also commenced a surface drill programme that is focussing on 
evaluation of the existing discoveries in and around both the Palito and 
Sao Chico orebodies.  Therefore, through the combination of organic 
growth and the development of Coringa, we very much hope we will be 
increasing our current gold production levels of 40,000 ounces per annum 
and see a significant step change in the Group's evolution. 
 
   With the announcement at the end of March of a subscription for new 
shares by Greenstone Resources II LP, raising US$15 million, Serabi is 
also now well-funded and able to progress its plans.  Greenstone is a 
well respected, specialist private equity mining fund and I am delighted 
to welcome them as a long-term strategic investor in the Company and 
look forward to working closely with them to unlock the full potential 
of Serabi's gold projects and pursue other growth opportunities. 
 
   Over the past three years there has been very stable production from the 
Palito complex, and whilst we feel the potential from both orebodies far 
exceeds current production levels, the Group has remained focused on 

maximising cash generation and building up the working capital of the 
business.  This allowed us to act quickly, when the opportunity 
unexpectedly arose, to acquire the Coringa deposit in December 2017 and 
the Group was able to meet the first instalment payment without needing 
to secure additional funding at that time.  Nevertheless, it is not lost 
on the Board that fortunes of small producers like Serabi are very 
closely linked to the gold price and also, in our case, the Brazilian 
Real/ US Dollar exchange rate.  Ultimately, more production with 
stronger margins bring the improved economies associated with scale, and 
this is the logic behind the acquisition of Coringa.  It reinforces the 
Group as very much a Brazilian focused producer and developer, and the 
synergies are clear, with an established experienced management and 
operational team in Brazil, we believe the Group is well placed to 
repeat the successful 2013/14 development and commissioning of Palito, 
at Coringa. 
 
   2017 saw some improvements in metal prices and general confidence in the 
sector, and in Brazil, we enjoyed exchange rates working in our favour a 
little more, particularly towards the end of the year.  Brazil remains 
something of an enigma for investors, with juniors struggling to deliver, 
and for a country with such resource wealth, the country has been 
strangely light on attracting exploration investment from both junior 
and major mining companies.  This, we feel, gives us great competitive 
advantage.  With many years of operational experience, we are well 
placed to take advantage of others that find the going more challenging. 
We have built sound relationships with the various governing agencies 
and stakeholders, giving us further advantage.  However, things seem to 
be changing for the better, as we have seen a number of companies 
increasing their involvement in the country over the past 12 months, 
some with considerable rumoured success.  This renewed appetite is 
resulting in larger mining groups, looking to the junior sector for 
joint venture opportunities on projects to support their own growth. 
This cycle has always been the engine that drives the mining sector.  It 
brings renewed investor interest and support for the sector to boost 
growth and new developments.  We are seeing renewed interest from larger 
mining groups in the land holdings of the smaller companies in the 
country and keen to look at ways to work together that could accelerate 
evaluation of some of our tenements This can only bode well for the 
region and country as a whole. 
 
   Nevertheless the Serabi Board will continues to be prudent in its own 
strategy for growth as we seek to maximise the value that we can achieve 
from each dollar invested.  We remain a small producer for now and will 
insist that management continues to follow its proven formula and 
systematic approach to exploration activity.  We feel we have excellent 
potential in our tenements, at Palito, Sao Chico and Coringa, so 
anything outside these areas has to be substantially better to be 
included in our growth strategy.  Growth will always need to be balanced 
with the concurrent need to continue to improve the Group's working 
capital position and improve its resilience to short term market 
movements that can negatively impact on cash flow and margin. 
 
   As well as the acquisition of the Coringa gold project, we commenced a 
surface drill programme at Palito in late 2017.  Our exploration 
programme and organic growth, has effectively been on-hold since 2011 as 
we focussed on the start-ups at both Palito and Sao Chico, and this has 
consumed our free cash flow as well as human resources.  We are 
delighted these mine site discoveries, made in 2011/2012, are finally 
being tested.  Just as with the initial acquisition payment for Coringa, 
the Group has been able to finance the initial drill from internal cash 
flow.  The Palito resource comprises over 26 veins clustered together 
covering a strike length of up to one kilometre. However, we have now 
traced some of the veins over four kilometres so the potential to grow 
the resource is compelling. 
 
   It is a similar story at Sao Chico, a far more immature deposit than 
Palito in terms of geological understanding, but the orebody being mine 
lies within a strong regional shear zone that hosts numerous historical 
artisanal mines over a five kilometre strike length.  In addition, 
recent geophysics work, undertaken in 2016, suggests the presence of 
additional sub-parallel structures. 
 
   Management continue to actively assess other opportunities in Brazil and 
the Group's track record of moving exploration projects into production 
makes Serabi an attractive partner for companies with less operational 
experience.  We acquired Coringa during the year, as an asset level deal 
that we feel represents great value.  The Group has tried to acquire 
this asset on other occasions in the past recognising both the potential 
of the project and its synergies.  The previous operators put a huge 
amount of effort and investment into the project and we feel our 
patience has been rewarded by acquiring it at a very attractive price. 
Furthermore, we believe we have acquired an asset which has high 
potential and which can be a more significant gold producer than 
currently forecast.   The acquisition of Coringa along with our existing 
growth opportunities starts us on the path of expansion and we will 
continue to pursue opportunities that will bring strong, long term 
returns to our existing shareholders. 
 
   The next 12 months will bring different, new challenges to the Company. 
Whilst we need to maintain production levels, we need to expand the team 
to absorb and advance Coringa through permitting and into construction. 
The exploration team also need to meet the expectations we have for our 
internal growth. Overall, I feel the Company has enjoyed a very 
successful 2017, which will form a strong platform for further success 
in 2018. 
 
   On behalf of the Board of Directors I would like to extend my 
appreciation to the employees and management of Serabi for a job well 
done during the past year.  Their hard work and determination to succeed 
means your Company is well positioned to reap the benefits of the higher 
gold price environment we expect during 2018 and beyond.  Finally, thank 
you to our shareholders, large and small, for your patience during the 
last few years.  I continue to believe the future is extremely bright 
for Serabi 
 
   Mel Williams - Chairman 
 
   Serabi's Directors Report and Financial Statements for the year ended 31 
December 2017 together the Chairman's Statement and the Management 
Discussion and Analysis, are available from the Company's website - 
www.serabigold.com and will be posted on SEDAR at www.sedar.com. 
 
   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 
Ross Allister                             Tel: [phone] 
James Bavister                            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. 
 
   The following information, comprising, the Income Statement, the Group 
Balance Sheet, Group Statement of Changes in Shareholders' Equity, and 
Group Cash Flow, is extracted from these financial statements. 
 
   The Company will, in compliance with Canadian regulatory requirements, 
post its Management Discussion and Analysis for the year ended 31 
December 2017 and its Annual Information Form on SEDAR at www.sedar.com. 
These documents will also available from the Company's website - 
www.serabigold.com. 
 
   Annual Report 
 
   The Annual Report has been published by the Company on its website at 
www.serabigold.com and printed copies are expected to be available by 15 
May 2018.  Additional copies will be available to the public, free of 
charge, from the Company's offices at 2(nd) floor, 30 - 32 Ludgate Hill, 
London, EC4M 7DR and will be available to download from the Company's 
website at www.serabigold.com. 
 
 
 
   The data included in the selected annual information table below is 
taken from the Company's annual audited financial statements for the 
year ended 31 December 2017, which were prepared in accordance with 
International Financial Reporting Standards in force at the reporting 
date and their interpretations issued by the International Accounting 
Standards Board ("IASB") and adopted for use within the European Union 
(IFRS) and with IFRS and their interpretations issued by the IASB. 
There are no material differences on application to the Group.  The 
consolidated financial statements have also been prepared in accordance 
with those parts of the Companies Act 2006 applicable to companies 
reporting under IFRS. 
 
   The audited financial statements for the year ended 31 December 2017 
will be presented to shareholders for adoption at the Company's next 
Annual General Meeting and filed with the Registrar of Companies. 
 
   Statement of Comprehensive Income 
 
   For the year ended 31 December 2017 
 
 
 
 

                                                                         Group 
                                                               For the year  For the year 
                                                                 ended 31      ended 31 
                                                                 December      December 
                                                                   2017          2016 
                                                        Notes      US$           US$ 
CONTINUING OPERATIONS 
Revenue                                                          48,449,868    52,593,751 
Cost of sales                                                  (32,015,498)  (32,906,426) 
Provision for impairment of inventory                             (950,000)             - 
Depreciation and amortisation charges                          (10,465,283)   (8,384,738) 
Gross profit                                                      5,019,087    11,302,587 
Administration expenses                                         (5,500,275)   (4,962,524) 
Share-based payments                                              (381,362)     (350,899) 
Gain on disposal of fixed asset                                     170,591        34,742 
Operating (loss) / profit                                         (691,959)     6,023,906 
Foreign exchange loss                                             (214,488)     (236,619) 
Finance expense                                                   (839,191)   (3,917,681) 
Finance income                                                          135           573 
(Loss) / profit before taxation                                 (1,745,503)     1,870,179 
Income tax (expense) / benefit                                    (652,400)     2,560,113 
(Loss) / profit for the period from continuing 
 operations(1)                                                  (2,397,903)     4,430,292 
 
Other comprehensive income (net of tax) 
Items that may be reclassified subsequently to profit 
 or loss 
Exchange differences on translating foreign operations            (591,720)     8,618,687 
Total comprehensive profit / (loss) for the period(1)           (2,989,623)    13,048,979 
(Loss) / profit per ordinary share (basic)                  4       (0.34c)         0.66c 
(Loss) / profit per ordinary share (diluted)                4       (0.34c)         0.61c 
 
 
   (1)          The Group has no non-controlling interests and all losses 
are attributable to the equity holders of the parent company 
 
 
 
   Balance Sheet as at 31 December 2017 
 
 
 
 
                                                                    Group 
                                                              2017          2016 
                                                              US$           US$ 
Non-current assets 
Deferred exploration costs                                  23,898,819     9,990,789 
Property, plant and equipment                               48,980,381    45,396,140 
Taxes receivable                                             1,474,062             - 
Deferred taxation                                            2,939,634     3,253,630 
Total non-current assets                                    77,292,896    58,640,559 
Current assets 
Inventories                                                  6,934,438     8,110,373 
Trade and other receivables                                  1,277,142     1,233,049 
Prepayments                                                  3,237,412     3,696,550 
Cash and cash equivalents                                    4,093,866     4,160,923 
Total current assets                                        15,542,858    17,200,895 
Current liabilities 
Trade and other payables                                     5,347,964     4,722,139 
Interest-bearing liabilities                                 2,845,712     2,964,057 
Acquisition payments outstanding                             5,000,000             - 
Derivative financial liabilities                               709,255             - 
Accruals                                                       614,198       635,446 
Total current liabilities                                   14,517,129     8,321,642 
Net current assets                                           1,025,729     8,879,253 
Total assets less current liabilities                       78,318,625    67,519,812 
Non-current liabilities 
Trade and other payables                                     2,753,409     2,211,078 
Provisions                                                   2,047,131     1,851,963 
Acquisition payments outstanding                             9,997,961             - 
Interest-bearing liabilities                                 2,749,412        77,798 
Total non-current liabilities                               17,547,913     4,140,839 
Net assets                                                  60,770,712    63,378,973 
 
 
Equity 
Share capital                                                5,540,960     5,540,960 
Share premium reserve                                        1,722,222     1,722,222 
Option reserve                                               1,425,024     1,338,652 
Other reserves                                               4,015,369     3,051,862 
Translation reserve                                       (31,199,568)  (30,607,848) 
Retained surplus                                            79,266,705    82,333,125 
Equity shareholders' funds attributable to owners 
 of the parent                                              60,770,712    63,378,973 
 
 
 
 
 
   Statements of Changes in Shareholders' Equity 
 
   For the year ended 31 December 2017 
 
 
 
 
                  Share      Share    Share option    Other    Translation   (Accumulated losses)     Total 
Group            capital    premium      reserve     reserves     reserve     / retained surplus     equity 
                   US$        US$         US$          US$         US$               US$               US$ 
Equity 
 shareholders' 
 funds at 31 
 December 
 2015           5,263,182          -     2,747,415    450,262  (39,226,535)            77,549,321   46,783,645 
Foreign 
 currency 
 adjustments            -          -             -          -     8,618,687                     -    8,618,687 
Profit for 
 year                                                                                   4,430,292    4,430,292 
Total 
 comprehensive 
 loss for the 
 year                   -          -             -          -     8,618,687             4,430,292   13,048,979 
Transfer to 
 taxation 
 reserve                -          -             -  2,690,401             -           (2,690,401)            - 
Release of 
 fair value 
 provision on 
 convertible 
 loan                   -          -             -          -             -             1,195,450    1,195,450 
Warrants 
 lapsed                 -          -             -   (88,801)             -                88,801            - 
Shares issued 
 in period        277,778  1,722,222             -          -             -                     -    2,000,000 
Share options 
 lapsed in 
 period                 -          -   (1,759,662)          -             -             1,759,662            - 
Share option 
 expense                -          -       350,899          -             -                     -      350,899 
Equity 
 shareholders' 
 funds at 31 
 December 
 2016           5,540,960  1,722,222     1,338,652  3,051,862  (30,607,848)            82,333,125   63,378,973 
Foreign 
 currency 
 adjustments            -          -             -          -     (591,720)                     -    (591,720) 
Loss for year           -          -             -          -             -           (2,397,903)  (2,397,903) 
Total 
 comprehensive 
 income for 
 the year               -          -             -          -     (591,720)           (2,397,903)  (2,989,623) 
Transfer to 
 taxation 
 reserve                -          -             -    963,507             -             (963,507)            - 
Share options 
 lapsed in 
 period                 -          -     (294,990)          -             -               294,990            - 
Share option 
 expense                -          -       381,362          -             -                     -     381,3620 
Equity 
 shareholders' 
 funds at 31 
 December 
 2017           5,540,960  1,722,222     1,425,024  4,015,369  (31,199,568)            79,266,705   60,770,712 
 
 
 
   Other reserves comprise a merger reserve of US$361,461 and a taxation 
reserve of US$3,653,908 (2016: merger reserve of US$361,461 and taxation 
reserve of US$2,690,401). 
 
 
 
   Cash Flow Statements 
 
   For the year ended 31 December 2017 
 
 
 
 
                                                                      Group 
                                                              For the       For the 
                                                             year ended    year ended 
                                                             31 December   31 December 
                                                                2017          2016 
                                                                US$           US$ 
Cash outflows from operating activities 
Operating profit / (loss)                                    (2,397,903)     4,430,292 
Net financial expense                                          1,053,544     4,153,727 
Depreciation - plant, equipment and mining properties         10,465,283     8,384,738 
Provision for impairment of inventory                            950,000             - 
Other provisions                                                 156,404             - 
Taxation (benefit) / expense                                     652,400   (2,560,113) 
Share-based payments                                             381,362       350,899 
Interest paid                                                  (747,072)   (2,049,900) 

Foreign exchange                                               (178,753)   (1,045,460) 
Finance charges                                                        -      (37,500) 
Changes in working capital 
(Increase) / decrease in inventories                           (287,898)       153,314 
(Increase) / decrease in receivables, prepayments 
 and accrued income                                          (1,968,858)     4,177,110 
Increase / (decrease) in payables, accruals and provisions       165,249       195,845 
Increase / (decrease) in short term intercompany 
payables                                                               -             - 
Net cash flow from operations                                  8,243,758    16,152,952 
 
Investing activities 
Acquisition of subsidiary net of cash acquired               (4,994,665)             - 
Purchase of property, plant, equipment and projects 
 in construction                                             (2,144,753)   (3,042,043) 
Mine development expenditure                                 (4,362,192)   (2,366,486) 
Geological exploration expenditure                               (2,487)     (525,444) 
Proceeds from sale of assets                                     214,566        34,742 
Interest received and other finance income                           135           573 
Net cash outflow on investing activities                    (11,289,396)   (5,898,658) 
 
Financing activities 
Convertible loan received and subsequent conversion 
 to ordinary shares                                                    -     2,000,000 
Draw-down of short-term loan facility                          3,628,511             - 
Repayment of short term secured loan                                   -   (3,111,111) 
Receipt from repayment of intercompany loan                            -             - 
Payment of finance lease liabilities                           (644,340)     (755,858) 
Receipts for short term trade finance                                  -    15,146,817 
Repayment of short term trade finance                                  -  (21,384,139) 
Net cash (outflow) / inflow from financing activities          2,984,171   (8,104,291) 
 
Net (decrease) / increase in cash and cash equivalents          (61,467)     2,150,003 
Cash and cash equivalents at beginning of period               4,160,923     2,191,759 
Exchange difference on cash                                      (5,590)     (180,839) 
Cash and cash equivalents at end of period                     4,093,866     4,160,923 
 
 
   Notes 
 
   1.             General Information 
 
   The financial information set out above for the years ended 31 December 
2017 and 31 December 2016 does not constitute statutory accounts as 
defined in Section 434 of the Companies Act 2006,,but is derived from 
those accounts. Whilst the financial information included in this 
announcement has been compiled in accordance with International 
Financial Reporting Standards ("IFRS") this announcement itself does not 
contain sufficient financial information to comply with IFRS. A copy of 
the statutory accounts for 2016 has been delivered to the Registrar of 
Companies and those for 2017 will be delivered to the Registrar of 
Companies following approval by shareholders at the Annual General 
Meeting. The full audited financial statements for the years end 31 
December 2017 and 31 December 2016 comply with IFRS. 
 
   2.             Auditor's Opinion 
 
   The auditor has issued an unqualified opinion in respect of the 
financial statements for both 2016 and 2017 which do not contain any 
statements under the Companies Act 2006, Section 498(2) or Section 
498(3). 
 
   3.             Basis of Preparation 
 
   The financial statements have been prepared in accordance with 
International Financial Reporting Standards ("IFRS") in force at the 
reporting date and their interpretations issued by the International 
Accounting Standards Board ("IASB") as adopted for use within the 
European Union and with IFRS and their interpretations issued by the 
IASB. The consolidated financial statements have also been prepared in 
accordance with those parts of the Companies Act 2006 applicable to 
companies reporting under IFRS. 
 
   At the date of authorisation of the financial statements, the following 
standards and relevant interpretations, which have not been applied in 
these financial statements, were in issue but not yet effective (and 
some of which were pending endorsement by the EU): 
 
   lFRS 9 Financial Instruments 
 
   lFRS 15 Revenue from Contracts 
 
   IFRS 16 Leases 
 
   The only standard that is anticipated to be significant or relevant to 
the Group is IFRS 9 "Financial Instruments". The new standard will 
replace existing accounting standards. It is applicable to financial 
assets and liabilities and will introduce changes to existing accounting 
concerning classification, measurement and impairment (introducing an 
expected loss method). 
 
   IFRS 15 'Revenue from Contracts with Customers' is not expected to have 
a material impact on the Group at this stage of the Group's operations. 
IFRS 16 will require the recognition of an asset and liability with 
respect to the material operating lease commitments that the group have. 
Management are currently considering the impact that this will have on 
the financial statements. 
 
   The revenue contracts held by the Group usually contain a single 
performance criteria that is satisfied at a point in time.  The Group 
will adopt the above standards at the time stipulated by that standard. 
The Group does not at this time anticipate voluntary early adoption of 
any of the standards. 
 
   Going concern and availability of finance 
 
   On 23 March 2018 the Company entered into a Subscription Agreement with 
Greenstone resources II LP ("Greenstone"), Greenstone has conditionally 
agreed to subscribe ("the Subscription") for 297,759,419 New Ordinary 
Shares ("the Subscription Shares") at a price of 3.6 pence per share 
(the "Subscription Price"). The New Ordinary Shares to be issued 
pursuant to the Subscription will rank pari passu with the existing 
Ordinary Shares. Application will be made to the London Stock Exchange 
for the Subscription Shares to be admitted to trading on AIM 
("Admission") and listed for trading on the TSX. Completion of the 
Subscription and Admission is expected to take place at 8:00 a.m. on or 
around 12 April 2018. 
 
   The Directors anticipate the Group now has access to sufficient funding 
for its immediate projected needs.  The Group expects to have sufficient 
cash flow from its forecast production to finance its on-going 
operational requirements, to repay its secured loan facilities and to 
fund planned exploration and development activity on its other gold 
properties. However additional funding will be required to bring the 
newly acquired Coringa gold project into production including the final 
acquisition payment. The secured loan facility is repayable by 30 June 
2020 and at 31 December 2017, the amount outstanding under this facility 
was US$4.48 million (2016: US$1.37 million). 
 
   The Directors consider that the Group's operations are performing at the 
levels that they anticipate but the Group remains a small-scale gold 
producer.  Any unplanned interruption or reduction in gold production, 
unforeseen reductions in the gold price or appreciation of the Brazilian 
currency, could adversely affect the level of free cash flow that the 
Group can generate on a monthly basis.  Nonetheless with the proceeds to 
be received from the Subscription, the Directors consider that they will 
nonetheless be able to meet its financial obligations as they fall due. 
 
   On this basis, the Directors have therefore concluded that it is 
appropriate to prepare the financial statements on a going concern 
basis. 
 
   4.             Earnings per Share 
 
 
 
 
                                                          For the year 
                                                            ended 31     For the year ended 31 
                                                         December 2017       December 2016 
(Loss) / profit attributable to ordinary shareholders 
 (US$)                                                      (2,397,903)              4,430,292 
Weighted average ordinary shares in issue                   698,701,772            672,502,757 
Basic (loss) / profit per share (US cents)                      (0.343)                  0.659 
Diluted ordinary shares in issue                         698,701,772(1)         722,412,757(2) 
Diluted (loss) / profit per share (US cents)                    (0.343)                  0.613 
 
 
   1. As the effect of dilution is to reduce the loss per share, the diluted 
      loss per share is considered to be the same as the basic loss per share. 
 
   2. Assumes exercise of all options and warrants outstanding as of that date. 
 
   5.             Post balance sheet events 
 
   On 22 January 2018, the Group increased its loan with Sprott by US$3 
million ("The New Loan") and at the same time extended the final 
repayment period on its existing US$5 million loan (The Existing Loan") 
with Sprott by six months from 31 December 2019 to 30 June 2020.  The 
New Loan may be repaid, at the Company's request and with the agreement 
of Sprott (the "Extension Option") in equal monthly instalments 
commencing 30 September 2018 with a final payment due 22 months later on 
30 June 2020. If the Extension Option is not exercised the New Loan must 
be repaid in full on 30 September 2018.  Notwithstanding the above, both 
the New Loan and the Existing Loan may be repaid by Serabi in full 
without penalty at any time. 
 
   On 23 March 2018 the Company entered into a Subscription Agreement with 
Greenstone resources II LP ("Greenstone"), Greenstone has conditionally 
agreed to subscribe ("the Subscription") for 297,759,419 New Ordinary 
Shares ("the Subscription Shares") at a price of 3.6 pence per share 
(the "Subscription Price"). The New Ordinary Shares to be issued 

pursuant to the Subscription will rank pari passu with the existing 
Ordinary Shares. Application will be made to the London Stock Exchange 
for the Subscription Shares to be admitted to trading on AIM 
("Admission") and listed for trading on the TSX. Completion of the 
Subscription and Admission is expected to take place at 8:00 a.m. on or 
around 12 April 2018. 
 
   With these exceptions there has been no item, transaction or event of a 
material or unusual nature likely, in the opinion of the Directors of 
the Company, to affect significantly the continuing operation of the 
entity, the results of these operations, or the state of affairs of the 
entity in future financial periods. 
 
   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

March 29, 2018 02:00 ET (06:00 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.