Serabi Gold plc Serabi Gold Plc: Operational Review Of Second Quarter 2018

 
TIDMSRB 
 
 
   For immediate release 
 
   23 July 2018 
 
   Serabi Gold plc 
 
   ("Serabi" or the "Company") 
 
   Operational Review of Second Quarter 2018 
 
   Serabi Gold plc (AIM:SRB, TSX:SBI), the Brazilian focused gold mining 
and development company, is pleased to report gold production of 9,563 
ounces for the second quarter of 2018 at its Palito Complex high grade 
gold operation in the Tapajos region of Para State, Northern Brazil. 
 
   CORPORATE HIGHLIGHTS 
 
 
   -- Completion of GBP6.4 million brokered share placement to follow the US$15 
      million investment made by Greenstone Resource II LP. 
 
 
   OPERATIONAL HIGHLIGHTS 
 
 
   -- Second quarter production of 9,563 ounces of gold. 
 
   -- Mine production totalling 36,071 tonnes at 8.12 grams per tonne ("g/t") 
      of gold. 
 
   -- 38,155 tonnes of run of mine ("ROM") ore processed through the plant from 
      the combined Palito and Sao Chico orebodies, with an average grade of 
      7.71 g/t of gold. 
 
   -- Additional 4,861 tonnes of historical tailings processed through the 
      leaching circuit at a grade of 4.38 g/t of gold. 
 
 
   -- 2,744 metres of horizontal mine development completed during the quarter. 
 
   -- 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 is now close to reaching the next planned level at -15mRL, 
      approximately 280 vertical metres below surface. Production is coming 
      from levels 70 and 56mRL, with levels 10 and -3mRL in development. 
 
   -- Step out surface drilling is underway on both the Palito and Sao Chico 
      orebodies with initial drilling results to be released during Q3 
 
   -- By the end of the quarter, surface ore stocks were approximately 7,800 
      tonnes, (March end 2018:  10,200 tonnes) with an average grade of 3.5 g/t 
      of gold, together with approximately 36,000 tonnes of flotation tailings 
      grading approximately 3.0 g/t gold. 
 
 
   Mike Hodgson, CEO, said: 
 
   "We enjoyed an excellent second quarter, producing 9,563 ounces of gold, 
bringing total gold production for the year to date to 18,750 ounces, 
remaining well on track to meet our annual production guidance.  It has 
been another quarter of consistency for mined grades, tonnage and plant 
processing throughput.  The mined grades were particularly pleasing 
increasing from 7.49 g/t in the first quarter to an average of 8.12 g/t 
for this second quarter. 
 
   "Development rates have improved as the year has progressed and much of 
this has been down to the introduction of our 'new generation 
mini-scoops', the first of which arrived on site during this second 
quarter.  These, along with a narrow-width face drilling jumbo, have 
allowed us to advance much faster with less dilution and waste handling. 
We are still analysing the overall effectiveness and cost benefits of 
this equipment with a view to purchasing additional units, but so far, 
the results have been excellent. 
 
   "The plant continued to perform very well during the quarter with over 
43,000 tonnes processed, 38,000 tonnes of which was ROM ore from Palito 
and Sao Chico which was supplemented by approximately 4,900 tonnes of 
the historical flotation tails that are processed through the leaching 
circuit.  We have experienced difficulties in passing this material 
through the front end of the process plant but have been able during 
this quarter to get the system up and running. This material processed 
during this quarter has had an average grade of nearly 4.0 g/t of gold 
and is therefore very viable. 
 
   "At the Palito orebody, seven out of the 25 veins that comprise the 
total geological resource are in various stages of development and 
production. The Pipocas, G3, Senna, Zonta and Mogno veins remain the 
main ore source with minor development on the Jatoba, Ipe, Compressor 
and G1 veins. 
 
   "We continue to deepen the Sao Chico orebody and are now evaluating the 
-3m level through development, as well as drilling as deep as the -50m 
level, some 300 vertical metres from surface. 
 
   "On the mine-site exploration front, surface drill programmes are 
underway on both orebodies. The Palito programme is testing the many 
potential extensions of the known veins.  The Sao Chico programme is 
similarly testing the extension of the main structure east and west as 
well as drilling the geophysical anomalies identified in the 2016 ground 
geophysics programme, which we believe may indicate parallel structures. 
 
 
   "We hope to issue an exploration update early in the third quarter with 
some of the results of this drilling campaign. 
 
   "As reported last quarter, after successful test work in 2017, the 
Company has purchased an ore sorter.  The ore sorter will screen the 
crushed ore feed before it enters the milling circuit, eliminating the 
elevated level of waste that currently finds its way into the process 
plant.  This will initially be installed to treat Palito ore, but we 
will also use it to undertake our own test work on the Sao Chico ore, 
which has shown initial promise to be amenable to sorting. 
 
   "Away from the operations, at Coringa, we continue to make progress on 
the permitting of the project.  The Environmental Impact Assessment 
("EIA") was submitted late 2017, and we are now engaging with the state 
environmental agency as to their questions and requests emanating from 
the EIA submission. 
 
   "On the corporate front, the Greenstone placing and subsequent brokered 
share issue has brought in aggregated gross proceeds of approximately 
US$23.5 million.  These funds have substantially strengthened the 
Company's balance sheet and will allow significant acceleration of our 
organic growth plans and outstanding capital programmes, as well as 
continuing the progress at Coringa. 
 
   "During the year we expect to generate steady positive news flow, 
starting with an exploration update early in the third quarter, as well 
as licensing progress at Coringa.  Our ambition remains to establish 
ourselves as a significant gold producer in Brazil with a target of an 
annualised production rate of 100,000 ounces within the next two years." 
 
 
   Results 
 
   Total production for the second quarter of 2018 was 9,563 ounces of gold, 
generated from the processing of 43,016 tonnes of ore at overall average 
grades of 7.33 g/t of gold. The processed ore 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 36,071 tonnes with a grade of 8.12 g/t of gold. 
 
   On 30 June 2018, there were coarse ore stocks of approximately 7,800 
tonnes of ore with an average grade of 3.5 g/t of gold, and 
approximately 36,000 tonnes of flotation tails with an average grade of 
3.0 g/t of gold. These stockpiles are being consumed, albeit not as 
quickly as forecast, and for now the operation remains plant 
constrained. 
 
   A total of 2,744 metres of horizontal development has been completed 
during the quarter, of which approximately 1,290 metres was ore 
development.  The balance is the ramp, cross cuts and stope preparation 
development. 
 
   2018 Production 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 maintains its initial production 
guidance and expects that gold production for 2018 will exceed that of 
2017 and be up to 40,000 ounces. 
 
   Key Operational Information 
 
 
 
 
               SUMMARY PRODUCTION STATISTICS FOR 2018 YEAR TO DATE 
                AND 2017 
                                         Year 
                                          to 
                        Qtr 1   Qtr 2    Date   Qtr 1   Qtr 2   Qtr 3   Qtr 4    Total 
------------ 
                         2018    2018    2018    2017    2017    2017    2017    2017 
------------  --------  ------  ------  ------  ------  ------  ------  ------  ------- 
Horizontal 
 development 
 -- Total     Metres     2,353   2,744   5,097   2,251   1,855   2,996   2,762    9,864 
 
Mined ore -- 
 Total        Tonnes    39,669  36,071  75,740  36,918  41,684  41,263  49,011  168,876 
 Gold 
  grade 
  (g/t)                   7.49    8.12    7.79   10.12    7.80    9.80    8.25     8.92 
 
Milled ore    Tonnes    43,145  38,155  81,300  41,722  43,294  44,205  43,345  172,565 
 Gold 
  grade 
  (g/t)                   7.04    7.71    7.36    7.62    6.29    7.28    7.27     7.11 
Gold 
 production 
 (1) (2)      Ounces     9,188   9,563  18,751   9,861   8,148   9,657   9,337   37,004 
 
 
   1. Gold production figures are subject to amendment pending final agreed 
      assays of the gold content of the copper/gold concentrate and gold 
      doré that is delivered to the refineries. 
 
   2. Gold production totals for 2018 include treatment of 6,624 tonnes of 
      flotation tails at a grade of 3.92 g/t (2017 full year : 4,568 tonnes) 
 
   3. The table may not sum due to rounding. 
 
 
   This announcement is inside information for the purposes of Article 7 of 
Regulation 596/2014. 
 
   The person who arranged for the release of this announcement on behalf 
of the Company was Clive Line, Director. 
 
   Enquiries: 
 
 
 
 
Serabi Gold plc 
Michael Hodgson                                     Tel: [phone] 
Chief Executive                                     Mobile: [phone] 
 
Clive Line                                          Tel: [phone] 
Finance Director                                    Mobile: [phone] 
 
Email: mailto:[e-mail] 
[e-mail] 
-------------------------------------------------- 
Website: http://www.serabigold.com 
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. 
 
   GLOSSARY OF TERMS 
 
   The following is a glossary of technical terms: 
 
   "Au" means gold. 
 
   "assay" in economic geology, means to analyse 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 grammes 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 identi ed 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 re ect 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 
 
 
 
 

(END) Dow Jones Newswires

July 23, 2018 02:00 ET (06:00 GMT)

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