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SRB Serabi Gold Plc

66.50
2.00 (3.10%)
Last Updated: 11:36:16
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Serabi Gold Plc LSE:SRB London Ordinary Share GB00BG5NDX91 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  2.00 3.10% 66.50 65.00 68.00 66.50 64.50 64.50 48,871 11:36:16
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Gold Ores 58.71M -983k -0.0130 -50.38 49.61M

Serabi Gold plc Serabi Gold Plc : Unaudited Interim Financial Results For The Three And Nine Month Periods To 30 September 2017

14/11/2017 7:00am

UK Regulatory


 
TIDMSRB 
 
   For immediate release 
 
   14 November 2017 
 
   Serabi Gold plc 
 
   ("Serabi" or the "Company") 
 
   Unaudited Interim Financial Results for the three and nine month periods 
to 30 September 2017 and Management's Discussion and Analysis 
 
   Serabi Gold (AIM:SRB, TSX:SBI), the Brazilian focused gold mining and 
development company, today releases its unaudited interim financial 
results for the three and nine month periods ending 30 September 2017 
and at the same time has published its Management's Discussion and 
Analysis for the same period. 
 
   Key Financial Information 
 
 
 
 
SUMMARY FINANCIAL STATISTICS FOR THE THREE AND NINE 
 MONTHSING 30 SEPTEMBER 2017 
                  3 months to         9 months to         3 months to         9 months to 
                30 September 2017   30 September 2017   30 September 2016   30 September 2016 
                       US$                 US$                 US$                 US$ 
Revenue                12,908,790          36,225,050          16,209,753          42,120,928 
Cost of Sales         (7,695,870)        (24,558,180)        (10,216,119)        (25,828,941) 
Depreciation 
 and 
 amortisation 
 charges              (2,934,986)         (7,545,847)         (2,907,161)         (6,552,101) 
Gross profit            2,277,934           4,121,023           3,086,473           9,739,886 
 
Profit / 
 (loss) 
 before tax               490,532           (337,135)             743,503           2,305,731 
Profit after 
 tax                      235,051           (770,629)             465,480           1,471,662 
Earnings per 
ordinary 
share 
(basic)                     0.03c             (0.11c)               0.07c               0.22c 
 
Average gold 
price 
received                                     US$1,238                                US$1,256 
 
                                                                    As at               As at 
                                                        30 September 2017    31 December 2016 
                                                                      US$                 US$ 
Cash and cash 
 equivalents                                                    9,753,385           4,160,923 
Net assets                                                     64,598,323          63,378,973 
 
Cash Cost and 
All-In 
Sustaining 
Cost 
("AISC") 
                                                              9 months to         9 months to 
                                                        30 September 2017   30 September 2016 
Gold 
 production 
 for cash 
 cost and 
 AISC 
 purposes                                                          27,666              29,900 
 
Total Cash                                                         US$795              US$772 
 Cost of 
 production 
 (per ounce) 
Total AISC of                                                    US$1,058              US$951 
 production 
 (per ounce) 
 
 
 
 
 
   Key Operational Information 
 
 
 
 
                                    SUMMARY PRODUCTION STATISTICS FOR THE THREE QUARTERS 
                                                     TO 30 SEPTEMBER 2017 
                       Quarter  Quarter  Quarter  Year to  Quarter  Quarter  Quarter  Quarter 
                          1        2        3      Date       1        2        3        4      Total 
                        2017     2017     2017     2017     2016     2016     2016     2016     2016 
Horizontal 
 development 
 - Total      Metres     2,251    1,855    2,996    7,102    2,925    2,941    2,649    2,694   11,209 
 
Mined ore - 
 Total        Tonnes    36,918   42,075   41,263  120,256   37,546   33,606   43,133   44,579  158,864 
 Gold grade (g/t)        10.12     7.80     9.80     9.20    11.02     9.56     9.61     8.94     9.74 
 
Milled ore    Tonnes    46,663   43,905   44,954  135,522   36,615   39,402   42,464   40,485  158,966 
 Gold grade (g/t)         7.09     6.26     7.21     6.86     8.58     8.17     8.08     7.60     8.11 
Gold 
 production 
 (1) (2)      Ounces     9,861    8,148    9,657   27,666    9,771    9,896   10,310    9,413   39,390 
 
 
   (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 2017 include treatment of 4,941 tonnes 
of flotation tails (2016 full year : 16,716 tonnes) 
 
   Financial Highlights 
 
 
   -- Cash Cost for the year to date of US$795 per ounce of gold. 
 
   -- All-In Sustaining Cost for the year to date of US$1,058 per ounce of 
      gold. 
 
   -- Gross profit from operations for the first nine months of 2017 of US$4.12 
      million. 
 
   -- Profit per share of 3 cents for Q3 and loss per share of 11 cents for the 
      first nine months of 2017. 
 
   -- Cash holdings of US$9.75 million at 30 September 2017. 
 
   -- Average gold price of US$1,238 per ounce received on gold sales in the 
      first nine months of 2017. 
 
 
   2017 Guidance 
 
 
   -- Forecast gold production for the fourth quarter of 2017 of approximately 
      10,000 ounces to achieve full year production of approximately 38,000 
      ounces. 
 
   -- Cost guidance for 2017 of an All-In Sustaining Cost ("AISC") of US$1,000 
      to US$1,025 per ounce. 
 
 
   Operational Highlights 
 
 
   -- Third quarter production of 9,657 ounces of gold. 
 
   -- Mine production totalled 41,263 tonnes at 9.80 grammes per tonne ("g/t") 
      of gold. 
 
   -- 44,954 tonnes processed through the plant for the combined mining 
      operations, with an average grade of 7.21 g/t of gold. 
 
   -- 2,996 metres of horizontal mine development completed in the quarter. 
 
   -- The Palito orebody saw development and production focus on the Senna, 
      Pipocas, G3 and Mogno veins principally, with three other veins, (Zonta, 
      G1, Jatoba) in development. 
 
   -- The mine ramp accessing the Sao Chico orebody has now reached the 26mRL, 
      approximately 230 vertical metres below surface.   Production is coming 
      from the 128mRL and 100mRL levels with levels 86mRL, 70mRL, 56mRL, 40mRL 
      and now 26mRL all either developed or in development, comfortably ahead 
      of production. 
 
   -- By the end of the third quarter, surface ore stocks were approximately 
      15,000 tonnes (30 June 2017: 12,000 tonnes) with an average grade of 3.2 
      g/t of gold. 
 
   -- A surface diamond drill programme of approximately 10,000 metres has 
      commenced and will principally focus on the strike extensions of the 
      veins in the Palito orebody. 
 
   -- The results of a new 43-101 Technical Report comprising the geological 
      resource and mineable reserve are close to completion and are expected to 
      be issued before the end of November. 
 
 
 
   Mike Hodgson, CEO of Serabi commented, 
 
 
 
   "It was very pleasing to see third quarter production returning to 
expected levels, after a slightly disappointing second quarter. We have 
now achieved total production for the first nine months of the year of 
27,666 ounces. Whilst a little below the production for the same period 
in 2016, the shortfall was simply due to a short term operational 
problem at Sao Chico during April and May, when we lost remote scoop 
capability and therefore had to rely on lower grade development ore for 
this period. By June the problem was over, and we have seen strong 
monthly productions figures since. 
 
 
 
   "Even more pleasing is the relative financial strength of the Company at 
the end of the quarter, with cash holdings increasing to over US$9.7 
million. We have benefitted during the third quarter from a relatively 
weak Real and a good gold price and with so much of our costs being in 
Reais, it is the gold price in Reais that really dictates our margins 
and cash generation. 
 
 
 
   "We have earmarked some of this cash to be reinvested back into the 
operations and in addition to the acquisition of an ore-sorter, other 
major capital investment include the acquisition of some new mine trucks, 
and expansion our tailings management facilities. 
 
 
 
   "We have also commenced a 10,000 metre surface drilling programme which 
is concentrating on the strike extensions of the veins at the Palito 
orebody. We anticipate this is just the start of a larger programme 
which will identify new orebodies, expand the resource base and support 
increased levels of gold production in the longer term. 
 
 
 
   "Whilst profitability is down compared with 2016, it must be remembered 
that not only is production slightly down, resulting in lower revenue, 
but the Group has been impacted by the relative strength of the Real in 
2017 when compared with 2016. The average exchange rate for the nine 
months to 30 September 2016 was BrR$3.55 to US$1.00 and BrR$3.15 to 
US$1.00 for the first nine months of 2017 a swing of almost eleven per 
cent. Nonetheless our operating costs for the nine months have fallen by 
almost US$2 million or over 7 percent, a reflection of the improvements 
and efficiencies that we are constantly seeking to implement. 
 
 
 
   "We have reported a small profit before tax of US$0.5 million for the 
third quarter which is a pleasing turnaround after the loss reported for 
the second quarter and I hope that, if production during the fourth 
quarter is in line with expectation, this can be continued." 
 
 
 
 
 
   SERABI GOLD PLC 
 
   Condensed Consolidated Statements of Comprehensive Income 
 
 
 
 
 
 
                                                                    For the three months ended    For the nine months ended 
                                                                           30 September                  30 September 
                                                                       2017           2016           2017           2016 
(expressed in US$)                                          Notes   (unaudited)    (unaudited)    (unaudited)   (unaudited) 
CONTINUING OPERATIONS 
Revenue                                                               12,908,790     16,209,753     36,225,050    42,120,928 
Operating expenses                                                   (7,295,870)   (10,216,119)   (23,938,180)  (25,828,941) 
Provision for impairment of inventory                                  (400,000)              -      (620,000)             - 
Depreciation of plant and equipment                                  (2,934,986)    (2,907,161)    (7,545,847)   (6,552,101) 
Gross profit                                                           2,277,934      3,086,473      4,121,023     9,739,886 
Administration expenses                                              (1,407,836)    (1,267,898)    (3,828,194)   (3,812,218) 
Share based payments                                                   (101,665)      (101,072)      (279,697)     (249,828) 
Gain on disposal of assets                                                15,621          2,070        131,596        29,039 
Operating profit                                                         784,054      1,719,573        144,728     5,706,879 
Foreign exchange loss                                                   (24,021)       (28,860)      (144,420)     (101,268) 
Finance expense                                                        (269,532)      (947,250)      (337,543)   (3,299,989) 
Investment income                                                             31             40            100           109 
Profit / (loss) before taxation                                          490,532        743,503      (337,135)     2,305,731 
Income tax expense                                                     (255,481)      (278,023)      (433,494)     (834,069) 
Profit / (loss) for the period from continuing operations 
 (1) (2)                                                                 235,051        465,480      (770,629)     1,471,662 
 
Other comprehensive income 
 Items that may be reclassified subsequently to profit 
 or loss 
Exchange differences on translating foreign operations                 2,367,977      (588,314)      1,710,282     9,041,254 
Total comprehensive profit / (loss) for the period 
 (2)                                                                   2,602,028      (122,834)        939,653    10,512,916 
 
Profit / (loss) per ordinary share (basic) (1)                  3          0.03c          0.07c        (0.11c)         0.22c 
Profit / (loss) per ordinary share (diluted) (1)                3          0.03c          0.06c        (0.11c)         0.21c 
 
   (1) All revenue and expenses arise from continuing operations. 
 
   (2) The Group has no non-controlling interests and all losses are 
attributable to the equity holders of the parent company. 
 
   SERABI GOLD PLC 
 
   Condensed Consolidated Balance Sheets 
 
 
 
 
                                       As at         As at         As at 
                                    30 September  30 September  31 December 
                                        2017          2016          2016 
(expressed in US$)                  (unaudited)   (unaudited)    (audited) 
Non-current assets 
Deferred exploration costs            10,235,454     9,731,144     9,990,789 
Property, plant and equipment         44,260,723    44,860,837    45,396,140 
Deferred Taxation                      3,164,441             -     3,253,630 
Total non-current assets              57,660,618    54,591,981    58,640,559 
Current assets 
Inventories                            7,196,529     7,865,290     8,110,373 
Trade and other receivables            1,433,010     9,165,344     1,233,049 
Prepayments and accrued income         4,950,976     2,652,081     3,696,550 
Cash and cash equivalents              9,753,385     3,116,123     4,160,923 
Total current assets                  23,333,900    22,798,838    17,200,895 
Current liabilities 
Trade and other payables               5,313,706     6,564,033     4,722,139 
Secured loan                           1,290,000     1,425,058     1,371,489 
Trade and asset finance facilities     1,054,632     3,260,272     1,592,568 
Derivative financial liabilities         732,470       262,000             - 
Accruals                                 450,867       367,646       635,446 
Total current liabilities              8,841,675    11,879,009     8,321,642 
Net current assets                    14,492,225    10,919,829     8,879,253 
Total assets less current 
 liabilities                          69,135,527    65,511,810    67,519,812 
Non-current liabilities 
Trade and other payables               2,276,769     2,275,312     2,211,078 
Secured loan                           3,125,000             -             - 
Provisions                             1,905,230     2,284,002     1,851,963 
Trade and asset finance facilities       247,521       210,657        77,798 
Total non-current liabilities          7,554,520     4,769,971     4,140,839 
Net assets                            64,598,323    60,741,839    63,378,973 
Equity 
Share capital                          5,540,960     5,540,960     5,540,960 
Share premium                          1,722,222     1,722,222     1,722,222 
Option reserve                         1,355,583     1,237,581     1,338,652 
Other reserves                         3,404,624       361,461     3,051,862 
Translation reserve                 (28,897,566)  (30,185,281)  (30,607,848) 
Distributable surplus                 81,472,500    82,064,896    82,333,125 
Equity shareholders' funds            64,598,323    60,741,839    63,378,973 
 
   The interim financial information has not been audited and does not 
constitute statutory accounts as defined in Section 434 of the Companies 
Act 2006. 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.  The Group statutory accounts 
for the year ended 31 December 2016 prepared under IFRS as adopted in 
the EU and with IFRS and their interpretations adopted by the 
International Accounting Standards Board have been filed with the 
Registrar of Companies following their adoption by shareholders at the 
next Annual General Meeting. The auditor's report on these accounts was 
unqualified but did contain an Emphasis of Matter with respect to the 
Company and the Group regarding Going Concern.  The auditor's report did 
not contain a statement under Section 498 (2) or 498 (3) of the 
Companies Act 2006. 
 
   SERABI GOLD PLC 
 
   Condensed Consolidated Statements of Changes in Shareholders' Equity 
 
 
 
 
                                                                           Share 
(expressed in US$)                                  Share      Share      option       Other    Translation    Retained 
                                                                                     reserves                                Total 
                                                   capital    premium     reserve       (1)       reserve      earnings      equity 
Equity shareholders' funds at 31 December 2015 
 (audited)                                        5,263,182          -    2,747,415    450,262  (39,226,535)   77,549,321  46,783,645 
Foreign currency adjustments                              -          -            -          -     9,041,254            -   9,041,254 
Profit for the period                                     -          -            -          -             -    1,471,662   1,471,662 
Total comprehensive income for the period                 -          -            -          -     9,041,254    1,471,662  10,512,916 
Warrants lapsed                                           -          -            -   (88,801)             -       88,801           - 
Shares Issued in period                             277,778  1,722,222            -          -             -            -   2,000,000 
Release of fair value provision on convertible 
 loan                                                     -          -            -          -                  1,195,450   1,195,450 
Share options lapsed in period                            -          -  (1,759,662)          -             -    1,759,662           - 
Share option expense                                      -          -      249,828          -             -            -     249,828 
Equity shareholders' funds at 30 September 2016 
 (unaudited)                                      5,540,960  1,722,222    1,237,581    361,461  (30,185,281)   82,064,896  60,741,839 
Foreign currency adjustments                              -          -            -          -             -    2,958,630   2,958,630 
Loss for the period                                       -          -            -          -     (422,567)            -   (422,567) 
Total comprehensive income for the period                 -          -            -          -     (422,567)    2,958,630   2,536,063 
Transfer to taxation reserve                              -          -            -  2,690,401             -  (2,690,401)           - 
Share option expense                                      -          -      101,071          -             -            -     101,071 
Equity shareholders' funds at 31 December 2016 
 (audited)                                        5,540,960  1,722,222    1,338,652  3,051,862  (30,607,848)   82,333,125  63,378,973 
Foreign currency adjustments                              -          -            -          -     1,710,282            -   1,710,282 
Loss for the period                                       -          -            -          -             -    (770,629)   (770,629) 
Total comprehensive income for the period                 -          -            -          -     1,710,282    (770,629)     939,653 
Transfer to taxation reserve                              -          -            -    352,762             -    (352,762)           - 
Share options lapsed in period                            -          -    (262,766)          -             -      262,766           - 
Share option expense                                      -          -      279,697          -             -            -     279,697 
Equity shareholders' funds at 30 September 2017 
 (unaudited)                                      5,540,960  1,722,222    1,355,583  3,404,624  (28,897,566)   81,472,500  64,598,323 
 
 
   1. Other reserves comprise a merger reserve of US$361,461 and a taxation 
      reserve of US$3,043,163 (2016: merger reserve of US$ 361,461 and a 
      taxation reserve of US$2,690,401) 
 
   SERABI GOLD PLC 
 
   Condensed Consolidated Cash Flow Statements 
 
 
 
 
                                                          For the three months           For the nine months 
                                                                  ended                          ended 
                                                              30 September                   30 September 
                                                                  2017                 2016     2017          2016 
(expressed in US$)                                            (unaudited)       (unaudited)  (unaudited)  (unaudited) 
Operating activities 
Profit / (loss) before taxation                                        235,051      465,480    (770,629)     1,471,662 
Depreciation - plant, and equipment                                  2,934,986    2,907,161    7,545,847     6,552,101 
Net financial expense                                                  293,522      976,071      481,863     3,401,148 
Provision for impairment of inventory                                  400,000            -      620,000             - 
Taxation                                                               255,481      278,023      433,494       834,069 
Share-based payments                                                   101,665      101,072      279,697       249,828 
Foreign exchange (gain) / loss                                       (359,590)       38,109    (319,030)       207,785 
Changes in working capital 
 (Increase) / decrease in inventories                                (374,877)    1,286,509      612,487       505,768 
 Decrease / (increase) in receivables, prepayments 
  and accrued income                                                 1,076,370      330,084  (1,500,915)   (2,434,886) 
 (Decrease) / increase in payables, accruals and 
  provisions                                                         (409,010)     (68,421)    (405,421)     1,411,427 
Net cash inflow from operations                                      4,153,598    6,314,088    6,977,393    12,198,902 
 
Investing activities 
Purchase of property, plant and equipment and projects 
 in construction                                                     (265,246)    (713,069)  (1,349,085)   (2,840,740) 
Mine development expenditures                                      (1,191,322)    (469,608)  (3,155,641)   (1,718,759) 
Exploration and development expenditure                                      -    (247,479)      (2,501)     (247,479) 
Proceeds from sale of assets                                            59,659        2,070      175,634        29,039 
Interest received                                                           31           40          100           109 
Net cash outflow on investing activities                           (1,396,878)  (1,428,046)  (4,331,493)   (4,777,830) 
 
Financing activities 
Repayment of short-term secured loan                                         -  (1,333,334)            -   (2,666,667) 
Draw-down of short-term loan facility                                3,628,511            -    3,628,511             - 
Draw-down of short-term convertible loan facility                            -            -            -     2,000,000 
Receipts from short-term trade finance                                       -    4,454,632            -    16,355,730 
Repayment of short-term trade finance                                        -  (9,411,663)            -  (20,921,538) 
Payment of finance lease liabilities                                 (346,566)    (161,210)    (478,730)     (542,731) 
Interest paid and other finance costs                                (166,363)    (125,901)    (233,818)     (624,233) 
Net cash inflow / (outflow) from financing activities                3,115,582  (6,577,476)    2,915,963   (6,399,439) 
 
Net increase / (decrease) in cash and cash equivalents               5,872,302  (1,691,434)    5,561,863     1,021,633 
Cash and cash equivalents at beginning of period                     3,832,218    4,774,537    4,160,923     2,191,759 
Exchange difference on cash                                             48,865       33,020       30,599      (97,269) 
Cash and cash equivalents at end of period                           9,753,385    3,116,123    9,753,385     3,116,123 
 
 
 
   Notes 
 
   1.             General Information 
 
   The financial information set out above does not constitute statutory 
accounts as defined in Section 434 of the Companies Act 2006. 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 filed with the Registrar of Companies following their 
adoption by shareholders at the last Annual General Meeting.  The full 
audited financial statements, for the year end 31 December 2016, do 
comply with IFRS. 
 
   2.             Basis of Preparation 
 
   These interim condensed consolidated financial statements are for the 
three and nine month periods ended 30 September 2017. Comparative 
information has been provided for the unaudited three and nine month 
periods ended 30 September 2016 and, where applicable, the audited 
twelve month period from 1 January 2016 to 31 December 2016. These 
condensed consolidated financial statements do not include all the 
disclosures that would otherwise be required in a complete set of 
financial statements and should be read in conjunction with the 2016 
annual report. 
 
   The condensed consolidated financial statements for the periods have 
been prepared in accordance with International Accounting Standard 34 
"Interim Financial Reporting" and the accounting policies are consistent 
with those of the annual financial statements for the year ended 31 
December 2016 and those envisaged for the financial statements for the 
year ending 31 December 2017. The Group has not adopted any standards or 
interpretation in advance of the required implementation dates.  It is 
not anticipated that the adoption in the future of the new or revised 
standards or interpretations that have been issued by the International 
Accounting Standards Board will have a material impact on the Group's 
earnings or shareholders' funds. 
 
   These financial statements do not constitute statutory accounts as 
defined in Section 434 of the Companies Act 2006. 
 
 
   1. Going concern 
 
   On 1 February 2016, the Group announced that, with effect from 1 January 
2016, the Sao Chico Mine had achieved Commercial Production.  The Palito 
Mine has been in Commercial Production since 1 July 2014. 
 
   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, 
at least in part, fund exploration and development activity on its other 
gold properties. On 30 June the Group completed a re-negotiation of an 
increased secured loan facility of US$5 million (including the existing 
loan to US$1.37 million).  The new facility is repayable by 31 December 
2019 and the incremental funds were received by the Company on 5 July 
2017. 
 
   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 with limited cash resources to support any unplanned 
interruption or reduction in gold production, unforeseen reductions in 
the gold price, or appreciation of the Brazilian currency, all of which 
could adversely affect the level of free cash flow that the Group can 
generate on a monthly basis.  In the event that the Group is unable to 
generate sufficient free cash flow to meet its financial obligations as 
they fall due, or to allow it to finance exploration and development 
activity on its other gold properties, additional sources of finance may 
be required.   Should additional working capital be required the 
Directors consider that further sources of finance could be secured 
within the required timescale. 
 
   On this basis, the Directors have therefore concluded that it is 
appropriate to prepare the financial statements on a going concern 
basis. However, there is no certainty that such additional funds either 
for working capital or for future development will be forthcoming and 
these conditions indicate the existence of a material uncertainty, which 
may cast significant doubt over the Group's ability to continue as a 
going concern and, therefore, that it may be unable to realise its 
assets and discharge its liabilities in the normal course of business. 
The condensed consolidated financial statements do not include the 
adjustments that would result if the Group was unable to continue as a 
going concern. 
 
   (ii)   Use of estimates and judgements 
 
   There have been no material revisions to the nature and amount of 
changes in estimates of amounts reported in the 2016 annual financial 
statements. 
 
   (iii)  Impairment 
 
   At each balance sheet date, the Group reviews the carrying amounts of 
its property, plant and equipment and intangible assets to determine 
whether there is any indication that those assets have suffered 
impairment. Prior to carrying out of impairment reviews, the significant 
cash generating units are assessed to determine whether they should be 
reviewed under the requirements of IFRS 6 - Exploration for and 
Evaluation of Mineral Resources or IAS 36 - Impairment of Assets. Such 
determination is by reference to the stage of development of the project 
and the level of reliability and surety of information used in 
calculating value in use or fair value less costs to sell. Impairment 
reviews performed under IFRS 6 are carried out on a project by project 
basis, with each project representing a potential single cash generating 
unit. An impairment review is undertaken when indicators of impairment 
arise; typically when one of the following circumstances applies: 
 
   (i)            sufficient data exists that render the resource 
uneconomic and unlikely to be developed 
 
   (ii)           title to the asset is compromised 
 
   (iii)         budgeted or planned expenditure is not expected in the 
foreseeable future 
 
   (iv)          insufficient discovery of commercially viable resources 
leading to the discontinuation of activities 
 
   Impairment reviews performed under IAS 36 are carried out when there is 
an indication that the carrying value may be impaired. Such key 
indicators (though not exhaustive) to the industry include: 
 
   (i)            a significant deterioration in the spot price of gold 
 
   (ii)           a significant increase in production costs 
 
   (iii)         a significant revision to, and reduction in, the life of 
mine plan 
 
   If any indication of impairment exists, the recoverable amount of the 
asset is estimated, being the higher of fair value less costs to sell 
and value in use. In assessing value in use, the estimated future cash 
flows are discounted to their present value using a pre-tax discount 
rate that reflects current market assessments of the time value of money 
and the risks specific to the asset for which the estimates of future 
cash flows have not been adjusted. 
 
   If the recoverable amount of an asset (or cash-generating unit) is 
estimated to be less than its carrying amount, the carrying amount of 
the asset (or cash-generating unit) is reduced to its recoverable 
amount. Such impairment losses are recognised in profit or loss for the 
year. 
 
   Where an impairment loss subsequently reverses, the carrying amount of 
the asset (or cash-generating unit) is increased to the revised estimate 
of its recoverable amount, but so that the increased carrying amount 
does not exceed the carrying amount that would have been determined had 
no impairment loss been recognised for the asset (or cash-generating 
unit) in prior years. A reversal of an impairment loss is recognised in 
profit or loss for the year. 
 
   3. Earnings per share 
 
 
 
 
                                                                                          3 months ended 30 September                                    9 months ended 30 September 
                                                        3 months ended 30 September 2017              2016             9 months ended 30 September 2017              2016 
                                                                       US$                            US$                             US$                            US$ 
                                                                   (unaudited)                    (unaudited)                     (unaudited)                    (unaudited) 
Profit / (loss) attributable to ordinary shareholders 
 (US$)                                                                           235,051                      465,480                         (770,629)                    1,471,662 
Weighted average ordinary shares in issue                                    698,701,772                  678,005,407                       698,701,772                  663,647,199 
Basic profit/ (loss) per share (US cents)                                           0.03                         0.07                            (0.11)                         0.22 
Diluted ordinary shares in issue (1)                                         748,461,772                  727,915,407                       698,701,772                  713,557,199 
Diluted profit / (loss) per share (US cents)                                        0.03                         0.06                         (0.11)(2)                         0.21 
 
 
   1. Assumes exercise of all options and warrants outstanding as of that date 
      where the Group has reported a profit for the period. 
 
   2. 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. 
 
 
   4.             Post balance sheet events 
 
   On 13 November 2017, Serabi signed a conditional acquisition agreement 
to acquire 100 per cent. of the issued share capital and inter-company 
debt of Chapleau Resources Ltd ("Chapleau"), a Canadian registered 
company wholly-owned by Anfield Gold Corp ("Anfield"), which holds the 
Coringa gold project ("Coringa") located in the Tapajos gold province in 
Para, Brazil. 
 
   Serabi will acquire the entire issued share capital of Chapleau together 
with its outstanding inter-company debts owed to Anfield. Serabi will 
make an initial payment to Anfield on closing of the transaction 
("Closing") of US$5 million in cash from existing resources. A further 
US$5 million in cash is payable within three months of Closing.  A final 
payment of US$12 million in cash will be due upon the earlier of either 
the first gold being produced or 24 months from the date of Closing. The 
total proposed consideration for the acquisition amounts to US$22 
million in aggregate. 
 
   The Agreement is conditional on a number of items including: 
 
 
   -- Completion by Serabi of its due diligence, including the receipt of 
      satisfactory legal opinions as to mining title, labour, environmental and 
      tax matters; 
 
   -- Approval of the shareholders of Anfield and approval of the TSX-V; and 
 
   -- Approval of Serabi's secured lender (Sprott). 
 
 
   Pursuant to the Agreement, Anfield has provided Serabi with certain 
indemnities in respect of future claims relating to activities prior to 
Closing, including labour and tax liabilities. In addition, the 
Agreement includes representations and warranties from Anfield in favour 
of Serabi as would be customary for a transaction of this nature both on 
execution of the Agreement and at Closing. 
 
   Serabi has agreed, on Closing, to grant to Anfield, subject to the 
approval of Serabi's secured lender and, if required, sub-ordinated to 
any security granted by Serabi to its secured lender, a pledge over the 
shares of Chapleau as security for the full and irrevocable payment of 
the Deferred Consideration. 
 
   Anfield proposes to hold its shareholder meeting to approve the proposed 
transaction on 19 December 2017, and Closing is anticipated to occur 
shortly thereafter. 
 
   Chapleau is not required to prepare audited financial statements.  Based 
on information provided by Anfield and extracted from the unaudited 
consolidated financial statements of Anfield to 31 December 2016, 
Chapleau on a consolidated basis, reported a loss before taxation of 
C$22.3 million for the 12 month period ended 31 December 2016 after (i) 
expensing exploration and evaluation expenditure of C$7.9 million, (ii) 
recognising a foreign exchange loss of the capitalisation of intergroup 
loans into shares of Chapleau Brazil of C$13.7 million, and (iii) other 
one-off costs estimated at C$1.3 million. Chapleau had no revenues. As 
at 30 June 2017 total assets and shareholders' equity amounted to C$19.6 
million and C$(20.3 million) respectively, with shareholder loans 
totalling C$38.6 million. The balance sheet carrying value of property, 
plant and equipment associated with the Coringa project as at 30 June 
2017 amounted to C$16.6 million which excludes past exploration costs as 
these have been expensed.   As at 30 June 2017 Chapleau had net cash and 
cash equivalents of C$2.5 million and except for intercompany loans 
(amounting to C$38.6 million), which will be assigned to Serabi on 
Closing, had no borrowings. 
 
   Enquiries: 
 
 
 
 
Serabi Gold plc 
Michael Hodgson                           Tel: +44 (0)20 7246 6830 
Chief Executive                           Mobile: +44 (0)7799 473621 
 
Clive Line                                Tel: +44 (0)20 7246 6830 
Finance Director                          Mobile: +44 (0)7710 151692 
 
Email: contact@serabigold.com 
Website: www.serabigold.com 
 
Beaumont Cornish Limited 
 Nominated Adviser and Financial Adviser 
Roland Cornish                            Tel: +44 (0)20 7628 3396 
Michael Cornish                           Tel: +44 (0)20 7628 3396 
 
Peel Hunt LLP 
 UK Broker 
Ross Allister                             Tel: +44 (0)20 7418 9000 
Chris Burrows                             Tel: +44 (0)20 7418 9000 
 
Blytheweigh 
 Public Relations 
Tim Blythe                                Tel: +44 (0)20 7138 3204 
Camilla Horsfall                          Tel: +44 (0)20 7138 3224 
 
 
   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 Company will, in compliance with Canadian regulatory requirements, 
post the Unaudited Interim Financial Statements and the Management 
Discussion and Analysis for the three and nine-month periods ended 31 
September 2017 on SEDAR at www.sedar.com.  These documents will also 
available from the Company's website - www.serabigold.com. 
 
   Serabi's Directors Report and Financial Statements for the year ended 31 
December 2016 together the Chairman's Statement and the Management 
Discussion and Analysis, are available from the Company's website - 
www.serabigold.com and on SEDAR at www.sedar.com. 
 
   This announcement is inside information for the purposes of Article 7 of 
Regulation 596/2014. 
 
   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. 
 
   "doré - a semi-pure alloy of gold silver and other metals produced 
by the smelting process at a mine that will be subject to further 
refining. 
 
   "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

November 14, 2017 02:00 ET (07:00 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.

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