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
  +3.00p +5.08% 62.00p 60.00p 64.00p 62.50p 59.00p 59.00p 292,722 10:09:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining 33.9 -3.8 -8.8 - 37

Serabi Gold plc Chief Executive's Agm Statement To Shareholders

14/06/2019 3:00pm

UK Regulatory (RNS & others)


 
TIDMSRB 
 
 
   For immediate release 
 
   14 June 2019 
 
   Serabi Gold plc 
 
   ("Serabi" or the "Company") 
 
   AGM Statement 
 
   Serabi Gold plc (AIM:SRB, TSX:SBI), the Brazilian focused gold mining 
and development company, advises that at 3:30 pm today (UK time), it 
will be holding its Annual General Meeting. 
 
   The following is the text of the statement that will be made by Mr. Mike 
Hodgson, the Chief Executive of the Company.  Highlights of the 
statement are: 
 
 
   -- Gold production is on budget and the Company remains on target to 
      achieving its full year guidance of approximately 40,000 to 44,000 ounces 
      of gold. 
 
   -- Exploration results generated during 2018 have been extremely exciting 
      with significant potential to grow the mineral resource especially in the 
      vicinity of the current Sao Chico ore body. 
 
   -- Initial results from a new Preliminary Economic Assessment for the 
      Coringa project are expected to be issued during the early part of the 
      third quarter of 2019 and will reflect the 37% increase in mineral 
      resource. 
 
 
   "2018 was a very satisfying year for Serabi. Our Palito/Sao Chico 
Tapajos operation continued to perform extremely well, with excellent 
grades, and total annual gold production exceeding that for 2017.  At 
Coringa, we have made very pleasing progress with the permitting of this 
project and the award of a trial mining license and following the year 
end, we issued a new geological resource report showing a 37 per cent 
increase in the total gold resource. Across all of our tenements, the 
year also saw the long overdue return of our exploration activity. 
 
   "As I commented in the Company's operational update for the first 
quarter of 2019, we are continuing to maintain very good levels of gold 
production from our current Tapajos operations. Gold production for both 
the final quarter of 2018 and the first quarter of 2019 both exceeded 
10,000 ounces, the first time we have achieved two successive 10,000 
ounce quarters and, as of today, the second quarter of 2019 looks to be 
at similar levels.   So, as we approach the middle of the year, we 
remain very much on course to achieving our full year guidance of 
between 40,000 to 44,000 ounces of gold. 
 
   "Mining and development on both orebodies is continuing as planned, and 
in the Sao Chico orebody, the lowest level now being developed is the 
-33mRL level, which is 280 vertical metres from surface.  With 
underground drilling continuing at depth, the main vein has been 
intersected as deep as the -100mRL level.  In the Palito orebody, seven 
of the 25 veins that comprise the mineral resource and reserve are now 
being worked across various levels, bringing flexibility as we mine 
upper levels as well as lower ones.  The development of veins on upper 
levels such as the Mogno, Sena and Ipe veins, has meant that we have 
been able to minimize the need for any significant mine deepening during 
the past 18 months. 
 
   "2018 saw a substantial increase in exploration activity.  With respect 
to mine-site exploration, this focused principally on step out surface 
drilling campaign mostly conducted at Sao Chico.  This drilling was to 
test the strike extension of the Sao Chico orebody to the east and west 
and was very successful. Mineralisation with mineable widths and grades 
of what seems to be a continuation of the main Sao Chico orebody was 
traced for approximately 300 metres to the west.  Similarly drilling to 
the east of the deposit intersected ore grades up to 100 metres east of 
the current mine development.  These two extensions will now be followed 
up with closer spaced infill drilling, most probably conducted from 
underground.  Drilling success was, however, not limited to Sao Chico, 
as surface step out drilling was also undertaken on the G3 vein at 
Palito.  G3 has been and remains the most significant vein at Palito and 
the drilling indicates it extends with mineable widths and grades for at 
least a further 300 meters to the north and 200 metres to the south of 
the current mine workings. 
 
   "The gold process plant continues to perform very well, and as our 
operations are currently constrained by the capacity of the plant, high 
plant availability is critical.  One of the main reasons we have been 
able to plan for an increase in annual gold production for 2019 of 
approximately 15% is as a result of plant optimisation.  Part of this 
planned production improvement also results from a legacy of the 
start-up of gold production from the Palito ore body in 2014, when the 
CIP part of the process plant had not yet become operational. This 
resulted in the accumulation of a stockpile of tailings from the initial 
flotation process which still contained relatively high gold grades 
(3g/t and higher).  In late 2018 we took delivery of a scrubbing plant 
which is now allowing these flotation tails to be re-introduced directly 
into the cyanidation circuit of the process plant.  I am hopeful that 
this will contribute production of between 3,000 - 4,000 ounces during 
2019. 
 
   "Other modifications in the plant have included the construction of a 
new detoxification plant, improvements to the crushing circuit and the 
purchase of an ore sorting unit.  The ore-sorter will separate out 
crushed waste rock from crushed ore, and is equipped to sort both 
optically and using X-Ray scanning.  By eliminating waste material and 
therefore increasing average plant throughput grade it has the effect of 
lowering unit production costs, but also liberates essential plant 
capacity.   We will be installing, commissioning and optimising the 
ore-sorter during 2019 and therefore do not expect much impact on 
production this year, but look forward to the benefits in 2020. 
 
   "The successful raising of new equity in April 2018, as well as allowing 
the Company to 'progress a number of capital projects and advance the 
Coringa project, provided the financial base to restart exploration 
which had been on hold since 2012. The highlight of the exploration 
programme was the Airborne Magnetic and Electromagnetic geophysical 
survey that the Company conducted over approximately 20,000 hectares of 
our tenements.  This has resulted in us now having the entire Jardin do 
Ouro property covered by airborne surveys which, collectively, have 
identified multiple anomalies with some very significant ones being 
identified from the most recent survey. 
 
   "The most stand out feature is an extremely pronounced magnetic high 
that runs east west across the tenements.  This is a regional feature 
and we see many of the electromagnetic anomalies lying on the flanks of 
this magnetic high. In addition, the survey identified the smaller but 
nonetheless very exciting anomaly named the 'Cinderella shear' which is 
located traversing the Sao Chico mining license area in a south west to 
north east trend.  In the airborne survey this was highlighted as an 
eight kilometre long magnetic and electromagnetic high. 
 
   "Our exploration team have now also conducted a terrestrial Induced 
Polarisation ("IP") ground geophysics survey over the Cinderella shear, 
and identified a very coincidental, seven kilometre long chargeability 
'high' anomaly.  As a result, the Cinderella shear has become an area of 
significant interest to us. 
 
   "We also undertook IP surveys to the west of the Sao Chico deposit, 
covering the strike projection of the mineralisation which is also an 
area overlaid with significant artisanal surface workings.  The results 
were excellent, with the three key anomalous areas were identified.  We 
are now undertaking soil geochemistry sampling over these anomalies, to 
hopefully provide better targeting for a surface drilling programme 
which we will hope to undertake later in the year. 
 
   "The other main highlight of 2018 and the early part of this year was 
the continued advancement and permitting of our Coringa project.  After 
a successful drilling campaign during 2018, a new NI 43-101 compliant 
geological resource was published in March 2019.  This work has resulted 
in a 37% increase in the total geological resources which now total 
approximately 500,000 ounces of gold, with an average grade of over 7 
g/t.  We are following this up with a new Preliminary Economic 
Assessment ("PEA"), the results of which I expect to be issued during 
the early part of the third quarter of 2019.  During 2018 we were 
awarded a Trial Mining License, and this has allowed us to prepare the 
portal area in readiness to commence the decline to access the Serra ore 
zone at Coringa.  The Environmental Impact Study ("EIA") was also 
approved by the State environmental authority, SEMAS, in the latter part 
of 2018, and is a key step to the award of the Preliminary License 
("LP").  However, the Brumadinho tailings dam collapse in early 2019 has 
led to concerns amongst the general public regarding conventional 
tailings dams and resulted in us re-considering our plans for tailings 
management at Coringa.  During 2018, we had already undertaken 
significant studies into the cost and benefits of introducing filtering 
and dry stacking of tailings at Palito.  Whilst we determined that this 
change in the management of tailings was not necessary at Palito, we did 
accumulate significant knowledge and understanding of the technology. 
As a result, we have been able to prepare a plan to replace the planned 
conventional tailings facility at Coringa with the use of filtration and 
dry stacking of tails thereby eradicating the need for a tailings dam 
and are in the process of submitting an amendment to the Coringa EIA, 
reflecting this change.  We believe that this approach should alleviate 
any safety concerns and expedite permitting, and I hope that we can be 
in receipt of the LP before the end of 2019. 
 
   "Before leaving the subject of tailings, another use of funds from the 
April 2018 capital raise included substantial remediation of our 
tailings management facility (TMF) at Palito.  We spent much of the year 
buttressing the two main tailings ponds, under the guidance and 
supervision of our certified Brazilian tailings consultant, and by 
September this work was completed and approved by the authorities.  We 
also successfully submitted a new tailings management plan to the state 
environmental agency which was accepted, which now means we have long 
term tailings storage capacity until 2027. 
 
   "The gold price has clearly been favourable over recent months and 
particularly when looked at in Brazilian Reals where it is at its 
highest levels for many years.  With the Company's cost base mostly 
denominated in Reals, this is a good time to be a gold producer in 
Brazil. 
 
   "With the operation in very much in regime, we are maintaining  gold 
grades of over7 g/t gold, and with the production form the flotation 
tailings 'topping up' our monthly run of mine production, we are hoping 
to build up our cash position further ahead of making the final 
acquisition payment for the Coringa project due at the end of this year. 
 
   "Our near-term ambition remains to grow the business to become a 100,000 
ounce per annum producer within two years.  We have tremendous organic 
growth potential especially around Sao Chico and if exploration success 
can be turned into production ounces, this will of course greatly help 
in bringing about that expansion in the quickest and most cost-effective 
manner.  With a 37% improvement in the recently published updated 
geological resource at Coringa, we anticipate the forthcoming PEA will 
report improved project economics, on the back of which we will be 
actively seeking to put in place an attractive financing package for the 
project. I firmly believe that with our organic growth accompanied by 
permitting success at Coringa and the development of that project, 
Serabi will benefit from having greater critical mass and being able to 
attract wider investor support. 
 
   "Before closing I would like to acknowledge, again, the support, long 
term loyalty and commitment of our major shareholders, Fratelli 
Investments and Greenstone Resources.  Finally, I would like to thank 
our other new and existing shareholders, along with our management team 
and our workforce in Brazil." 
 
   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 
 
   GLOSSARY OF TERMS 
 
   The following is a glossary of technical terms: 
 
   Note: Mineral resources and reserves were estimated in conformity with 
the widely accepted CIM Estimation of Mineral Resource and Mineral 
Reserves Best Practices Guidelines (the "Guidelines") and are reported 
in accordance with the Canadian Securities Administrators' National 
Instrument 43-101" and the definitions applicable to individual 
categories of reserves and resources are set out in the Guidelines. The 
Glossary below includes only a summary of these definitions and readers 
can access the full definitions at 
 
   https://www.globenewswire.com/Tracker?data=TpAYuLB-l8dtdDQlI0eASHWCChaUDzEylP90lHm82q14c1dnerpIljsZDLLFh_I67MJXBFH7ajOE5xIceVErLbiJ2yP5SEcFUkmp9o_KBW8FCVHIGOZQeq-zOp5J-n_OHY8_RqSsoCPg9v6bywuv--eyMff7cpWTBti_UidddKlaKqgd9lfWRDDb93FSNOL2UUY6vFjpJm179UP4h0HLdQ== 
http://web.cim.org/standards/menupage.cfm?sections=177&menu=178. 
 
   "Au" means gold. 
 
   "CIM" means Canadian Institute of Mining, Metallurgy and Petroleum. 
 
   "development" - excavations used to establish access to the mineralised 
rock and other workings. 
 
   "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. 
 
   "Indicated Mineral Resource" is that part of a Mineral Resource for 
which quantity, grade or quality, densities, shape and physical 
characteristics can be estimated with a level of confidence sufficient 
to allow the appropriate application of technical and economic 
parameters, to support mine planning and evaluation of the economic 
viability of the deposit. The estimate is based on detailed and reliable 
exploration and testing information gathered through appropriate 
techniques from locations such as outcrops, trenches, pits, workings and 
drill holes that are spaced closely enough for geological and grade 
continuity to be reasonably assumed. 
 
   "Inferred Mineral Resource" is that part of a Mineral Resource for which 
quantity and grade or quality can be estimated on the basis of 
geological evidence and limited sampling and reasonably assumed, but not 
verified, geological and grade continuity. The estimate is based on 
limited information and sampling gathered through appropriate techniques 
from locations such as outcrops, trenches, pits, workings and drill 
holes. 
 
   "Measured Mineral Resource" is that part of a Mineral Resource for which 
quantity, grade or quality, densities, shape, and physical 
characteristics are so well established that they can be estimated with 
confidence sufficient to allow the appropriate application of technical 
and economic parameters, to support production planning and evaluation 
of the economic viability of the deposit. The estimate is based on 
detailed and reliable exploration, sampling and testing information 
gathered through appropriate techniques from locations such as outcrops, 
trenches, pits, workings and drill holes that are spaced closely enough 
to confirm both geological and grade continuity. 
 
   "Mineral Resource" is a concentration or occurrence of diamonds, natural 
solid inorganic material, or natural solid fossilized organic material 
including base and precious metals, coal, and industrial minerals in or 
on the Earth's crust in such form and quantity and of such a grade or 
quality that it has reasonable prospects for economic extraction. The 
location, quantity, grade, geological characteristics and continuity of 
a Mineral Resource are known, estimated or interpreted from specific 
geological evidence and knowledge. 
 
   "Mineral Reserve" is the economically mineable part of a Measured or 
Indicated Mineral Resource demonstrated by at least a Preliminary 
Feasibility Study. This Study must include adequate information on 
mining, processing, metallurgical, economic and other relevant factors 
that demonstrate, at the time of reporting, that economic extraction can 
be justified. A Mineral Reserve includes diluting materials and 
allowances for losses that may occur when the material is mined. 
 
   "Probable Mineral Reserve" is the economically mineable part of an 
Indicated and, in some circumstances, a Measured Mineral Resource 
demonstrated by at least a Preliminary Feasibility Study. This Study 
must include adequate information on mining, processing, metallurgical, 
economic, and other relevant factors that demonstrate, at the time of 
reporting, that economic extraction can be justified. 
 
   "Proven Mineral Reserve" is the economically mineable part of a Measured 
Mineral Resource. A Proven Mineral Reserve implies a high degree of 
confidence in the Modifying Factors. 
 
   "t" means tonnes 
 
   "Vein" is a generic term to describe an occurrence of mineralised rock 
within an area of non-mineralised rock. 
 
 
 
 

(END) Dow Jones Newswires

June 14, 2019 10:00 ET (14:00 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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