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| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| -1.00 | -1.54% | 64.00 | 63.00 | 65.00 | 65.50 | 64.00 | 65.50 | 69,335 | 09:58:37 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gold Ores | 58.71M | -983k | -0.0130 | -49.23 | 48.47M |
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TIDMSRB
8
For immediate release
14 August 2018
Serabi Gold plc
("Serabi" or the "Company")
Unaudited Interim Financial Results for the three and six month periods
to 30 June 2018 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 six month periods ending 30 June 2018 and at
the same time has published its Management's Discussion and Analysis for
the same periods.
Key Financial Information
6 months to 3 months to 6 months to 3 months to
30 June 2018 30 June 2018 30 June 2017 30 June 2017
US$ US$ US$ US$
-------------------------------- ------------- ------------- ------------- -------------
Revenue 25,700,634 11,873,783 23,316,260 10,142,676
Cost of Sales (17,272,887) (7,783,786) (16,862,310) (6,849,960)
------------- ------------- ------------- -------------
Gross Operating Profit 8,227,747 3,889,997 6,453,950 3,292,716
Administration and share based
payments (2,780,485) (1,422,883) (2,482,415) (1,175,340)
------------- ------------- ------------- -------------
EBITDA 5,447,262 2,467,114 3,971,535 2,117,376
Depreciation and amortisation
charges (4,490,900) (2,498,047) (4,610,861) (2,710,157)
------------- ------------- ------------- -------------
Operating profit before finance
and tax 956,362 (30,933) (639,326) (592,781)
------------- ------------- ------------- -------------
Loss after tax (482,634) (493,420) (1,005,680) (891,637)
------------- ------------- ------------- -------------
Earnings per ordinary share
(basic) (1.10c) (0.94c) (2.88c) (1.10c)
------------- ------------- ------------- -------------
Average gold price received US$1,309 US$1,296 US$1,221 US$1,242
As at As at
30 June 31 December
2018 2017
-------------------------------- ------------- ------------- ------------- -------------
Cash and cash equivalents 21,052,325 4,093,866
Net assets 74,465,696 60,770,712
Cash Cost and All-In Sustaining
Cost ("AISC")
--------------------------------
6 months to 6 months to
30 June 2018 30 June 2017
-------------------------------- ------------- ------------- ------------- -------------
Gold production for cash cost
and AISC purposes 18,751 18,009
------------- -------------
Total Cash Cost of production US$861 US$819
(per ounce)
------------- -------------
Total AISC of production (per US$1,121 US$1,072
ounce)
------------- -------------
Key Operational Information
SUMMARY PRODUCTION STATISTICS FOR 2018 YEAR TO
DATE AND 2017
Year
Qtr 1 Qtr 2 to 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.
Financial Highlights
-- Cash holdings at period end of over US$21 million (31 December 2017:
US$4.1 million).
-- EBITDA for the six months to 30 June 2018 has increased by 37% to US$5.45
million (six months to 30 June 2017: US$3.97 million).
-- Operating profit before finance and tax for the six month period of
US$956,362 (six months to 30 June 2017: loss of US$639,326).
-- Completion of share placements raising gross proceeds of US$23.8 million
with strategic and institutional investors.
-- Payment, on 16 April 2018, of second US$5 million instalment for the
purchase of Chapleau Resource Ltd and the Coringa Gold Project.
-- Consolidation of share capital completed on 19 June 2018, with every 20
existing ordinary shares being exchanged for 1 new ordinary share.
2018 Guidance
-- 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.
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 of Serabi commented:
"As reported in the news release on 23 July 2018, Serabi enjoyed an
excellent second quarter, producing 9,563 ounces of gold, bringing total
gold production for the year to date to 18,750 ounces. The Company
remains on track to meet its annual production guidance.
"Following the successful placings in April, the Company is now also in
a financially strong position and is able to push forwards with the
growth plans, which it hopes to realise from the successful development
of the Coringa project, which was acquired in December 2017, and from
exploration success around its existing operations where there are
significant indications of further parallel mineralised structures as
well as strike extensions at both the Palito and Sao Chico deposits.
"It is clearly very pleasing that the operations continue to be
profitable and that EBITDA has improved by 37% compared to the same six
month period in 2017. The Group has benefitted during the first six
months from the combination of a good gold price and a relatively weak
Brazilian Real during the first six months. The fall off in the gold
price in the last two months will impact on the revenue for the third
quarter but we do see some protection in the continued weakness of the
Real.
"As I have noted previously, the Company has increased development rates
during the year and, more recently, we have introduced our new
generation 'mini-scoops', the first of which arrived on site during the
second quarter. These, along with a narrow-width face drilling jumbo,
will allow us to advance much faster with less dilution and waste
handling. This increased level of development together with stepping up
the levels of underground drilling has, however, had a short-term impact
on our cost base reflected in a slight increase in the AISC for the year
to date. In some areas of the mine, development may be more than 12
months ahead of stope production, but it is absolutely essential to keep
development moving forward to ensure the sustainability of long-term
production. We also use development as part of the mine exploration and
resource growth. Based on the current success with the new, smaller
fleet, we plan a staged programme to replace the existing mine fleet at
Palito with these smaller units and will redeploy the larger units to
Sao Chico and in the future possibly to Coringa. This should result in
reducing development size by approximately 40%, compared with current
development dimensions, with consequent cost reductions, in those areas
where it is beneficial to use this smaller fleet.
"Finance costs for the first six months of 2018 are significantly higher
than the comparative period, in part reflecting the increased loan
arrangement that the Group had compared with June 2017, but in fact many
of these are non-cash items, with actual interest charges on loans being
US$357,000, whilst US$352,000 arises from the accounting treatment that
the regulations require for derivative transactions and the future
payment obligations for Coringa.
"The income tax expense, reflecting the reported profits in Brazil, is
also impacted by accounting requirements with the actual liability being
approximately US$111,000 and the balance being deferred tax charges
reflecting the benefit of past tax losses which are being used to reduce
the tax changes in Brazil.
"We are committing funding to the exploration programme and whilst much
of the initial drilling activity was to assist with short-term mine
planning at Palito, we are now drilling some of the strike extensions at
Palito and the geophysical anomalies at Sao Chico. In addition, we have,
during July, completed an airborne geophysical survey over approximately
30,000 hectares of our tenements. This means that the whole of the
contiguous exploration tenements, in which the Palito and Sao Chico
orebodies are hosted, has now been covered by airborne geophysics as a
first pass exploration tool. We expect to receive all the data files
from the contractor during September and will then be able to undertake
our own evaluation of the results of this survey and correlate these
with our historic geological information database. For the six months
to June we had spent approximately US$2.0 million on exploration of
which US$0.5 million related to the initial costs of the airborne
survey.
"We continue to progress the licencing of Coringa and completion of the
various studies that are required by the various authorities. Over the
last quarter, expenditure has been fairly modest at less than US$500,000
and outside of the costs for the various studies and licence
applications has been limited to maintaining the exploration site in
good order and steady refurbishment work of the process plant that was
acquired with the project. I do anticipate that as soon as the
necessary approvals are received that expenditure will increase as the
preparatory works for initial development get underway."
SERABI GOLD PLC
Condensed Consolidated Statements of Comprehensive Income
For the three months For the six months
ended ended
30 June 30 June
2018 2017 2018 2017
(expressed in US$) Notes (unaudited) (unaudited) (unaudited) (unaudited)
------------------------------------ ----- ----------- ------------ ------------ ------------
CONTINUING OPERATIONS
Revenue 11,873,783 10,142,676 25,700,634 23,316,260
Cost of sales (7,983,786) (6,849,960) (17,472,887) (16,642,310)
Release of provision for impairment
of inventory 200,000 -- 200,000 (220,000)
Depreciation of plant and
equipment (2,498,047) (2,710,157) (4,490,900) (4,610,861)
------------------------------------ ----- ----------- ------------ ------------ ------------
Gross profit 1,591,950 582,559 3,936,847 1,843,089
Administration expenses (1,357,814) (1,178,903) (2,689,238) (2,420,358)
Share based payments (78,278) (112,412) (155,571) (178,032)
Gain on disposal of assets 13,209 115,975 64,324 115,975
Operating (loss) / profit 169,067 (592,781) 1,156,362 (639,326)
Foreign exchange loss (498,543) (167,236) (555,633) (120,399)
Finance expense 2 (109,145) (34,194) (699,518) (68,011)
Finance income -- 35 34 69
------------------------------------ ----- ----------- ------------ ------------ ------------
(Loss) / profit before taxation (438,621) (794,176) (98,755) (827,667)
Income tax expense 3 (54,799) (97,461) (383,879) (178,013)
------------------------------------ ----- ----------- ------------ ------------ ------------
(Loss) / profit for the period from
continuing operations (1) (493,420) (891,637) (482,634) (1,005,680)
------------------------------------------- ----------- ------------ ------------ ------------
Exchange differences on translating
foreign operations (8,925,573) (2,124,542) (9,260,004) (656,695)
------------------------------------ ----- ----------- ------------ ------------ ------------
Total comprehensive income/(loss)
for the period (9,418,993) (3,016,179) (9,742,638) (1,662,375)
------------------------------------ ----- ----------- ------------ ------------ ------------
(Loss) / profit per ordinary
share (basic) (1) (2) (3) 4 (0.94c) (2.55c) (1.10c) (2.88c)
------------------------------------ ----- ----------- ------------ ------------ ------------
(Loss) / profit per ordinary
share (diluted) (1) (2 (3) 4 (0.94c) (2.55c) (1.10c) (2.88c)
------------------------------------ ----- ----------- ------------ ------------ ------------
(1) All revenue and expenses arise from continuing operations.
(2) On 19 June 2018, the Group completed a capital reorganisation with
every 20 existing shares being consolidated to one new share. The total
number of existing ordinary shares in issue immediately prior to the
capital reorganisation was 1,175,281,440. The total number of ordinary
shares in issue following the capital reorganisation was 58,764,072.
(3) For comparative purpose the weighted average ordinary shares in
issue and the diluted ordinary shares in issue for the three and six
month periods ended 30 June 2017, have been adjusted to reflect the
share consolidation of 20 existing shares being consolidated into one
new share.
SERABI GOLD PLC
Condensed Consolidated Balance Sheets
As at As at As at
30 June 30 June 31 December
2018 2017 2017
(expressed in US$) (unaudited) (unaudited) (audited)
------------------------------ ------------ ------------ ------------
Non-current assets
Deferred exploration costs 24,490,001 9,868,205 23,898,819
Property, plant and equipment 42,049,417 43,557,012 48,980,381
Taxes receivable 1,556,129 -- 1,474,062
Deferred taxation 2,276,588 3,133,428 2,939,634
------------------------------ ------------ ------------
Total non-current assets 70,372,135 56,558,645 77,292,896
------------------------------ ------------ ------------ ------------
Current assets
Inventories 5,827,745 6,844,757 6,934,438
Trade and other receivables 1,596,978 2,865,877 1,277,142
Prepayments and accrued
income 3,398,201 5,166,612 3,237,412
Cash and cash equivalents 21,052,325 3,832,218 4,093,866
------------------------------ ------------ ------------ ------------
Total current assets 31,875,249 18,709,464 15,542,858
------------------------------ ------------ ------------ ------------
Current liabilities
Trade and other payables 5,050,232 5,330,772 5,347,964
Interest bearing loan 5,000,000 1,371,489 1,980,000
Amounts due on acquisition -- -- 5,000,000
Trade and asset finance
facilities 774,122 1,338,475 865,712
Derivative financial
liabilities 346,992 650,000 709,255
Accruals 350,878 512,649 614,198
Total current liabilities 11,522,224 9,203,385 14,517,129
------------------------------ ------------ ------------ ------------
Net current assets 20,353,025 9,506,079 1,025,729
------------------------------ ------------ ------------ ------------
Total assets less current
liabilities 90,725,160 66,064,724 78,318,625
------------------------------ ------------ ------------ ------------
Non-current liabilities
Trade and other payables 2,233,353 2,133,294 2,753,409
Provisions 1,857,564 1,824,472 2,047,131
Amounts due on acquisition 10,481,843 -- 9,997,961
Interest bearing loan 1,610,000 -- 2,500,000
Trade and asset finance
liabilities 76,704 212,328 249,412
------------------------------ ------------ ------------
Total non-current liabilities 16,259,464 4,170,094 17,547,913
------------------------------ ------------ ------------ ------------
Net assets 74,465,696 61,894,630 60,770,712
------------------------------ ------------ ------------ ------------
Equity
Share capital 8,863,755 5,540,960 5,540,960
Share premium reserve 21,681,478 1,722,222 1,722,222
Option reserve 1,189,318 1,332,578 1,425,024
Other reserves 5,066,796 3,404,624 4,015,369
Translation reserve (40,459,572) (31,264,543) (31,199,568)
Retained earnings 78,123,921 81,158,789 79,266,705
------------------------------ ------------ ------------ ------------
Equity shareholders' funds 74,465,696 61,894,630 60,770,712
------------------------------ ------------ ------------ ------------
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 2017 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. The auditor's report on these accounts was
unqualified. 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
(expressed in
US$)
Share Share Share option Other reserves Translation Retained Total
(unaudited) capital premium reserve (1) reserve Earnings equity
---------------------- --------- ---------- ------------ -------------- ------------ ----------- -----------
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 -- -- -- -- (656,695) -- (656,695)
Loss for the period -- -- -- -- -- (1,005,680) (1,005,680)
---------------------- --------- ---------- ------------ -------------- ------------ ----------- -----------
Total comprehensive
income for the
period -- -- -- -- (656,695) (1,005,680) (1,662,375)
Transfer to taxation
reserve -- -- -- 352,762 -- (352,762) --
Share options
lapsed in period -- -- (184,106) -- -- 184,106 --
Share option expense -- -- 178,032 -- -- -- 178,032
---------------------- --------- ---------- ------------ -------------- ------------ ----------- -----------
Equity shareholders'
funds at 30 June
2017 5,540,960 1,722,222 1,332,578 3,404,624 (31,264,543) 81,158,789 61,894,630
---------------------- --------- ---------- ------------ -------------- ------------ ----------- -----------
Foreign currency
adjustments -- -- -- -- 64,975 -- 64,975
Loss for the period -- -- -- -- -- (1,392,223) (1,392,223)
---------------------- --------- ---------- ------------ -------------- ------------ ----------- -----------
Total comprehensive
income for the
period -- -- -- -- 64,975 (1,392,223) (1,327,248)
Transfer to taxation
reserve -- -- -- 610,745 -- (610,745) --
Share options
lapsed in period -- -- (110,884) -- -- 110,884 --
Share option expense -- -- 203,330 -- -- -- 203,330
---------------------- --------- ---------- ------------ -------------- ------------ ----------- -----------
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
---------------------- --------- ---------- ------------ -------------- ------------ ----------- -----------
Foreign currency
adjustments -- -- -- -- (9,260,004) -- (9,260,004)
Profit for the
period -- -- -- -- -- (482,634) (482,634)
---------------------- --------- ---------- ------------ -------------- ------------ ----------- -----------
Total comprehensive
income for the
period -- -- -- -- (9,260,004) (482,634) (9,742,638)
Transfer to taxation
reserve -- -- -- 1,051,427 -- (1,051,427) --
Share options
lapsed in period -- -- (391,277) -- -- 391,277 --
Shares issued
in period 3,322,795 19,959,256 -- -- -- -- 23,282,051
Share option expense -- -- 155,571 -- -- -- 155,571
---------------------- --------- ---------- ------------ -------------- ------------ ----------- -----------
Equity shareholders'
funds at 30 June
2018 8,863,755 21,681,478 1,189,318 5,066,796 (40,459,572) 78,123,921 74,465,696
---------------------- --------- ---------- ------------ -------------- ------------ ----------- -----------
1. Other reserves comprise a merger reserve of US$361,461 and a taxation
reserve of US$4,705,335 (31 December 2017: merger reserve of US$361,461
and a taxation reserve of US$3,653,908).
SERABI GOLD PLC
Condensed Consolidated Cash Flow Statements
For the three months For the six months
ended ended
30 June 30 June
2018 2017 2018 2017
(expressed in US$) (unaudited) (unaudited) (unaudited) (unaudited)
-------------------------------------------- ----------- ----------- ------------ -----------
Operating activities
Operating (loss)/profit (493,420) (891,637) (482,634) (1,005,680)
Depreciation -- plant, equipment and
mining properties 2,498,047 2,710,157 4,490,900 4,610,861
Net financial expense 607,688 201,395 1,165,117 188,341
Provision for impairment of inventory (200,000) -- (200,000) 220,000
Provision for taxation 54,799 97,461 383,879 178,013
Share-based payments 78,278 112,412 245,571 178,032
Foreign exchange (loss) / gain 222,774 (84,778) 154,350 40,560
Changes in working capital
(Increase)/decrease in inventories (619,967) (483,319) 117,146 987,364
(Increase) in receivables, prepayments
and accrued income (1,003,947) (333,475) (1,503,295) (2,577,285)
Increase/(decrease) in payables,
accruals and provisions 242,933 894,832 113,080 3,589
------------------------------------------- ----------- ----------- ------------ -----------
Net cash inflow from operations 1,387,185 2,223,048 4,484,114 2,823,795
-------------------------------------------- ----------- ----------- ------------ -----------
Investing activities
Acquisition payment for subsidiary (4,740,928) -- (4,740,928) --
Purchase of property, plant and equipment
and projects in construction (892,233) (815,924) (1,317,926) (1,083,839)
Capitalised mine development costs (1,064,966) (877,530) (2,030,489) (1,964,320)
Geological exploration expenditure (1,443,384) 21 (2,011,802) (2,500)
Pre-operational project costs (496,049) -- (1,289,479) --
Proceeds from sale of assets 13,209 115,975 64,324 115,975
Interest received -- 35 34 69
-------------------------------------------- ----------- ----------- ------------ -----------
(8,624,351
Net cash outflow on investing activities ) (1,577,423) (11,326,266) (2,934,615)
-------------------------------------------- ----------- ----------- ------------ -----------
Financing activities
Issue of ordinary share capital 23,807,346 -- 23,807,346 --
Costs associated with issue of share
capital (566,518) -- (566,518) --
Drawdown secured loan -- -- 3,000,000 --
Repayment of secured loan (666,667) -- (1,000,000) --
Payment of finance lease liabilities (143,063) (132,164) (426,210) (132,164)
Interest paid and other finance costs (234,166) (55,807) (386,587) (67,455)
Net cash inflow / (outflow) from financing
activities 22,196,932 (187,971) 24,428,031 (199,619)
-------------------------------------------- ----------- ----------- ------------ -----------
Net increase / (decrease) in cash
and cash equivalents 14,959,766 457,654 17,585,879 (310,439)
Cash and cash equivalents at beginning
of period 6,695,526 3,407,117 4,093,866 4,160,923
Exchange difference on cash (602,967) (32,553) (627,420) (18,266)
-------------------------------------------- ----------- ----------- ------------ -----------
Cash and cash equivalents at end of
period 21,052,325 3,832,218 21,052,325 3,832,218
-------------------------------------------- ----------- ----------- ------------ -----------
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 will be filed with the Registrar of Companies following their
adoption by shareholders at the next Annual General Meeting. The full
audited financial statements for the years end 31 December 2017 do
comply with IFRS.
2. Basis of Preparation
These interim condensed consolidated financial statements are for the
three and six month periods ended 30 June 2018. Comparative information
has been provided for the audited three and six month periods ended 30
June 2017 and, where applicable, the audited twelve month period from 1
January 2017 to 31 December 2017. 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 2017 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 2017 and those envisaged for the financial statements for the
year ending 31 December 2018.
The Group has not adopted any standards or interpretations in advance of
the required implementation dates.
As of 1 January 2018, lFRS 9 - Financial Instruments, and lFRS 15 -
Revenue from Contracts, became effective and have been adopted. The
effect of implementation has not had a material impact on the financial
results of the Group
As of the date of authorisation of these financial statements, IFRS 16
-- Leases, was in issue but not effective and has not been applied to
these financial statements.
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 Group does not at this time anticipate
voluntary early adoption of IFRS 16.
These financial statements do not constitute statutory accounts as
defined in Section 434 of the Companies Act 2006.
1. Going concern
On 12 April 2018 the Company completed a Subscription Agreement with
Greenstone Resources II LP ("Greenstone"), whereby Greenstone 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 issued pursuant to the
Subscription rank pari passu with the existing Ordinary Shares.
On 15 May 2018 the Company completed the placing of a further
176,678,445 new ordinary shares ("Placing Shares") at a price of 3.6
pence per Placing Share (the "Placing Price"), raising gross proceeds of
GBP6.36 million for the Company. The Placing Shares rank pari passu
with the existing ordinary shares.
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 30 June 2018, the amount outstanding under this facility was
US$6.61 million (31 December 2017: US$4.48 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.
(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 2017 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.
2. Finance Costs
Six months ended Six months ended
December 2016 December 2016
30 June 2018 30 June 2017
US$ US$
---------------- ----------------
Interest on secured loan (357,899) (68,011)
Unwinding of discount on acquisition
payment (483,883) --
Amortisation of fair value of
derivatives (130,000) --
Arrangement fee for secured loan (90,000) --
(1,061,782) (68,011)
Gain on revaluation of derivatives 362,264 --
Interest income 34 69
---------------- ----------------
Net finance expense (699,484) (67,942)
---------------- ----------------
3. Taxation
The Group has recognised a deferred tax asset to the extent that the
Group has reasonable certainty as to the level and timing of future
profits that might be generated and against which the asset may be
recovered. The Group has released the amount of US$272,459 as a
deferred tax charge during the six month period to 30 June 2018.
The Group has also incurred a tax charge for the period in Brazil of
US$111,420.
4. Earnings per share
3 months ended 3 months ended 6 months ended 6 months ended
30 June 2018 30 June 2017 30 June 2018 30 June 2017
US$ US$ US$ US$
(unaudited) (unaudited) (unaudited) (unaudited)
-------------------------- -------------- -------------- -------------- --------------
Loss attributable to
ordinary shareholders
(US$) (493,420) (891,637) (482,634) (1,005,680)
-------------------------- -------------- -------------- -------------- --------------
Weighted average ordinary
shares in issue 52,529,475 34,935,089 43,821,118 34,935,089
Basic loss per share
(US cents) (0.94) (2) (2.55) (3) (1.10) (2) (2.88) (3)
-------------------------- -------------- -------------- -------------- --------------
Diluted ordinary shares
in issue(1) 52,529,475 34,935,089 43,821,118 34,935,089
Diluted loss per share
(US cents) (0.94)(2) (2.55)(3) (1.10)(2) (2.88) (3)
-------------------------- -------------- -------------- -------------- --------------
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. On 19 June 2018, the Group completed a capital reorganisation with every
20 existing shares being consolidated into one new share. The total
number of existing ordinary shares in issue immediately prior to the
capital reorganisation was 1,175,281,440. The total number of ordinary
shares in issue following the capital reorganisation was 58,764,072.
3. For comparative purpose the weighted average ordinary shares in issue and
the diluted ordinary shares in issue for the three and six month periods
ended 30 June 2017, have been adjusted to reflect the share consolidation
of 20 existing shares being consolidated into one new share.
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
James Bavister 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
https://www.globenewswire.com/Tracker?data=4clV8d0nB_HDyWLmkc-LIwpdX_1PMwJG7SHTyTZFLuPBKXAU4J3xeCBDuO2_BCFsvwrGUiEYD8qGiEWJdzd4odQFYRuFEci1ErxyqtqTZaw=
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 month period ended 31 March 2018
on SEDAR at
https://www.globenewswire.com/Tracker?data=4clV8d0nB_HDyWLmkc-LI4aq94goM3EJMeak0mr_aeuGPMvXoZfbRe4GC0B0hBT76FCX7yfFjdq9goy_dNyAsw==
www.sedar.com. These documents will also available from the Company's
website --
https://www.globenewswire.com/Tracker?data=4clV8d0nB_HDyWLmkc-LIz1rUJXkJzWnHr69lNsNxJyO474b4ZbDWCfPO07J0uzFbbWZHta4QmXna-6k3cUwA-kLwXGddhuSk2asiU1cQkk=
www.serabigold.com.
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 --
https://www.globenewswire.com/Tracker?data=4clV8d0nB_HDyWLmkc-LIyyCxDYLuHvOSoQda8ZrfD1nygr7dj2widlnixcXlUkNgNfNTYnEPKqI6YZdYiEKABJL5tBuyip8pdyfswgvG7A=
www.serabigold.com and on SEDAR at
https://www.globenewswire.com/Tracker?data=4clV8d0nB_HDyWLmkc-LI4tXhOQJKLKY-lFhDCGzpo2qqFxkNTipm0snD6FxzAfSr7s14ZSGKCd3J6BehsXRLw==
www.sedar.com.
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.
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 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
August 14, 2018 02:00 ET (06:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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