Serabi Gold plc Serabi Reports Highest Quarterly Production For 2019

 
TIDMSRB 
 
 
   For immediate release 
 
   14 October 2019 
 
   Serabi Gold plc 
 
   ("Serabi" or the "Company") 
 
   Serabi reports highest quarterly production for 2019 
 
   Serabi Gold plc (AIM: SRB, TSX: SBI), the Brazilian focused gold mining 
and development company, is pleased to provide the results and a review 
of its third quarter operational and development activities in the 
Tapajos region of Para State, Northern Brazil. 
 
   A full version of this news release in PDF format which includes images 
can be accessed using the following link 
https://www.globenewswire.com/Tracker?data=0zh63Q7AONxurtDohqI7frP4fEeIt_h8Z2h0ccSZV_dOlnqV-z6fphdNsq6w0xKEjWBQPx4-mZlAtVz25zR9zjMjY_tLpZAhA3f3s-3kUA4= 
https://bit.ly/35wpxYw 
 
   OPERATIONAL and DEVELOPMENT HIGHLIGHTS 
 
 
   -- Third quarter gold production of 10,187 ounces of gold, resulting in 
      total production for the year to date of approximately 30,000 ounces, an 
      eleven per cent improvement over the same period in 2018. 
 
   -- Total ore mined for the quarter of 44,757 tonnes at 7.14 grams per tonne 
      ("g/t") of gold. 
 
   -- 45,378 tonnes of run of mine ("ROM") ore were processed through the plant 
      from the combined Palito and Sao Chico orebodies, with an average grade 
      of 6.84 g/t of gold. 
 
   -- 2,433 metres of horizontal development completed during the quarter. 
 
   -- The Company anticipates full year production for 2019 will be between 
      40,000 and 41,000 ounces. 
 
   -- Completion of the Company's Preliminary Economic Assessment ("PEA") on 
      the Coringa Gold Project in September, demonstrating strong positive 
      economics. 
 
 
   Key Operational Information 
 
 
 
 
                                  SUMMARY PRODUCTION STATISTICS TO DATE FOR 2019 AND 
                                                       FOR 2018 
                       Qtr 1   Qtr 2   Qtr 3    Total   Qtr 1   Qtr 2   Qtr 3   Qtr 4    Total 
------------  ------- 
                        2019    2019    2019    2019     2018    2018    2018    2018    2018 
------------  -------  ------  ------  ------  -------  ------  ------  ------  ------  ------- 
 
    Gold 
 production 
   (1) (2)    Ounces   10,164   9,527  10,187   29,878   9,188   9,563   8,101  10,256   37,108 
 
Mined ore -- 
 Total        Tonnes   42,609  44,784  44,757  132,151  39,669  36,071  42,725  44,257  162,722 
 Gold grade (g/t)       7.47     6.72    7.14     7.10    7.49    8.12    6.23    7.45     7.29 
 
Milled ore    Tonnes   43,451  43,711  45,378  132,540  43,145  38,155  41,405  45,548  168,253 
 Gold grade (g/t)       7.69     6.72    6.84     7.08    7.04    7.71    6.11    7.39     7.06 
 
Horizontal 
 development 
 -- Total     Metres   1,868    2,419   2,433    9,139   2,353   2,744   2,814   2,460   10,371 
 
 
   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 2019 include treatment of 20,554 tonnes of 
      flotation tails at a grade of 4.13 g/t (2018 full year: 16,466 tonnes at 
      3.71g/t) 
 
   3. The table may not sum due to rounding. 
 
 
   Mike Hodgson, CEO, commented: 
 
   "We are delighted to report our third quarter production of 10,187 
ounces of gold, which is another excellent performance and as a result 
the Company is very well placed to exceed 40,000 ounces of gold 
production for 2019 and significantly improve on the 2018 gold 
production of 37,108 ounces. 
 
   "Mining and plant throughput rates and grades showed modest improvements 
compared to the second quarter.  As reported last quarter, being plant 
constrained, we focus strongly on the quality of the ore feed and 
maximising plant availability.  As a result, the plant has now processed 
132,540 tonnes year to date, which represents an eight per cent 
improvement over the same nine month period in 2018.  The processing 
circuit for treatment of stockpiled gold bearing flotation tailings 
continued to perform well, and for the last five months processing rates 
have averaged over 100 tonnes per day with a total of 20,554 tonnes of 
an average grade of 4.13 g/t of gold having been processed during the 
year to date.  With a considerable stock of this tailings material 
remaining, we expect to continue processing these stockpiles to 
supplement run of mine gold production beyond the year end. 
 
   "The quarter also saw the much anticipated delivery of our ore sorter. 
The accompanying infrastructure is close to completion and we hope to 
start commissioning before the year end and with the expected benefits 
starting to be seen in the early part of 2020.  Its introduction will 
provide benefit by creating much needed space in the process plant in 
turn allowing for more flexibility to improve maintenance scheduling 
whilst also, through the liberation of process capacity, providing the 
opportunity to increase gold production in 2020. 
 
   "Development and production from the Palito orebody followed the same 
pattern as the second quarter, with development focusing on the veins of 
Pipocas, Mogno and Ipe veins.  The latter two veins are narrower than 
most Palito veins but exhibit at times exceptionally high grades.  We 
are mining these veins on the 144mRL and above, some 200 vertical metres 
above the deepest levels in the mine, and therefore can continue to 
provide run of mine without any requirement for further deepening of the 
mine. 
 
   "At the Sao Chico orebody, development continues on the deepest level, 
-48mRL, with lateral development being undertaken to the west in the 
upper level of +186mRL.  During the quarter we contracted a surface 
drilling contractor to undertake step out drilling east and west of the 
Sao Chico orebody to follow up on the results of the last drilling 
campaign undertaken during 2018.  The intention of this new campaign is 
to drill the immediate strike extensions beyond the current mine limits, 
with subsequent step outs.  After this initial work, the rigs will be 
assigned to test the near-minesite geophysical anomalies of Abelha, 
Besouro, Cicada and Cinderella, all of which lie within a 10 kilometre 
radius of Sao Chico. 
 
   Please click on the link below to access an image of the near-minesite 
geophysical anomalies around Sao Chico 
https://www.globenewswire.com/Tracker?data=0zh63Q7AONxurtDohqI7flz_BcgqvBan-8z-Z7PXOW7vh16yMTzDUrqY5nReorcF_dIKevCA3nD_C2YyqQQNJhbrsT1gm0PAu-HGCS3-nsE= 
https://bit.ly/2IN2sXP 
 
   "We are very excited about the prospectivity of these anomalies. They 
each exhibit geophysical signatures substantially better than anything 
else we have encountered around the Sao Chico deposit, and all have been 
the subject of significant artisanal mining activity, suggesting that 
the conductive body that we have identified has good potential to be 
gold bearing. 
 
   "The most significant news of the quarter was the release of the results 
of the Preliminary Economic Assessment ("PEA") at Coringa.  The 
highlights of the study are reproduced below, but in summary the results 
were very positive, indicating annual gold production, after an initial 
ramp-up period, averaging approximately 38,000 ounces per annum, a mine 
life of approximately nine years, average gold grades of 8.3 g/t, an 
AISC of approximately US$852 per ounces and an initial capex estimate of 
US$25 million.  The costs and capital each include a 20 per cent 
contingency, so I feel confident that we can improve on these cost 
estimates. 
 
   "We are continuing to work very hard on the outstanding permitting 
requirements.  The amended Environmental Impact Assessment (EIA) for 
Coringa, revised to replace the original plan for a conventional 
tailings management facility with dry tailings technology (a filtration 
plant allowing for the dry stacking of tails), was submitted to the 
authorities two weeks ago.  It was our decision to make this 
resubmission as the original EIA had already been approved by the state 
environmental agency, SEMAS, in late 2018. Whilst we are now awaiting 
approval from SEMAS again, they have welcomed our decision to revise the 
tailings management solution and we expect swift approval of the 
amendment.  This will allow us to proceed with the necessary public 
hearings and we hope to be in receipt of the Preliminary Licence 
("Licencia Previa") by the year end, or early in the first quarter of 
2020 at worst. 
 
   "With 30,000 ounces of gold produced for the year to date, the Company 
is well on course to achieving its best ever annual level of production. 
With mine production in good order and the additional ounces the 
tailings treatment is now bringing, I fully expect a good final quarter. 
Gold prices remain strong, and even stronger in Brazilian Reals. 
Following the issuing of a positive PEA and the resubmission of the EIA, 
we now hope we can progress Coringa permitting rapidly and see real 
progress on the ground at site next year.  I look forward to reporting 
further positive news in the coming months." 
 
   Production Results 
 
   Total production for the third quarter of 2019 was 10,187 ounces of gold, 
generated from the processing of 45,378 tonnes of ore at overall average 
grades of 6.84 g/t of gold. This processed ore was sourced from hard 
rock mined ore from the Palito and Sao Chico orebodies, supplemented by 
the processing of 9,662 tonnes of surface stockpiled flotation tailings 
grading approximately 3.97 g/t gold.  Mined tonnage for the quarter 
totalled 44,757 tonnes with a grade of 7.14 g/t of gold. 
 
   On 30 September 2019, there were coarse ore stocks of approximately 
2,600 tonnes of ore with an average grade of 8.50 g/t of gold, and 
significant stockpile of flotation tails with an estimated average grade 
of 3.00 g/t of gold. These stockpiles are being slowly consumed, used as 
a 'top-up' to mined ROM to keep the plant full.  The stockpile of 
flotation tailings is considered to be sufficient to continue to process 
this material at current rates for a significant part of 2020. 

 
   A total of 2,433 metres of horizontal development has been completed 
during the quarter, of which 967 metres was ore development.  The 
balance is the ramp, cross cuts and stope preparation development. 
 
   2019 Production Guidance 
 
   The Company anticipates full year production for 2019 will be between 
40,000 and 41,000 ounces. 
 
   Coringa PEA 
 
   The summary economic results of the Coringa PEA, as previously announced 
on 6 September 2019, are reproduced below (without adjustment): 
 
 
 
 
                                              BASE CASE 
  Gold Price (per ounce)            Units        $1,275    $1,350    $1,450 
  Pre tax NPV (5%)                   US$m         $55.7     $71.3     $92.2 
  Pre tax NPV (10%)                  US$m         $37.2     $49.4     $65.8 
  Post tax NPV (5%)                  US$m         $47.3     $61.3     $79.6 
  Post tax NPV (10%)                 US$m         $30.7     $41.7     $56.1 
  Post tax IRR                        %             31%       37%       46% 
  Project after tax cash flow        US$m         $71.6     $90.1    $114.0 
  Average annual free cash flow      US$m         $11.5     $13.7     $16.6 
  Average gross revenue              US$m          43.4      46.0      49.4 
 
 
   --       The Base Case project payback is estimated to occur within 2.25 
years of first gold production; 
 
   --       Average Life of Mine ("LOM") All-In Sustaining Cost ("AISC") of 
US$852(1) per ounce including royalties and refining costs using the 
Base Case gold price; 
 
   --       Average gold grade of 8.34 g/t gold producing a total gold 
production of 288,000 ounces; 
 
   --       Typical annual production once the project is in full operation 
averages 38,000 ounces per year(2) ; 
 
   --       Initial capital requirement of US$24.7 million prior to 
sustained positive cash-flow; 
 
   --       Sustaining capital expenditures of US$9.2 million to be funded 
from project cash-flow; 
 
   --       Indicated mineral resource inventory of 125,000 ounces of gold, 
supported by a further Inferred Resources of 178,000 ounces of gold from 
a total geological resource of 195,000 indicated ounces of gold and 
346,000 inferred ounces of gold, to be produced by underground open 
stoping using a cut-off grade of 6.00 g/t gold; 
 
   --       Total Life of Mine of approximately 9 years; 
 
   --       The Base Case includes a 20 per cent contingency on both 
operating and capital costs; 
 
   This announcement is inside information for the purposes of Article 7 of 
Regulation 596/2014. 
 
   The person who arranged for the release of this announcement on behalf 
of the Company was Clive Line, Director. 
 
   Enquiries: 
 
 
 
 
Serabi Gold plc 
Michael Hodgson                                     Tel: [phone] 
Chief Executive                                     Mobile: [phone] 
 
Clive Line                                          Tel: [phone] 
Finance Director                                    Mobile: [phone] 
 
Email: mailto:[e-mail] 
[e-mail] 
-------------------------------------------------- 
Website: http://www.serabigold.com 
www.serabigold.com 
-------------------------------------------------- 
 
Beaumont Cornish Limited 
 Nominated Adviser and Financial Adviser 
Roland Cornish                                      Tel: [phone] 
Michael Cornish                                     Tel: [phone] 
 
Peel Hunt LLP 
 UK Broker 
Ross Allister                                       Tel: [phone] 
James Bavister                                      Tel: [phone] 
 
 
 
   Copies of this announcement are available from the Company's website at 
www.serabigold.com. 
 
   Neither the Toronto Stock Exchange, nor any other securities regulatory 
authority, has approved or disapproved of the contents of this 
announcement. 
 
   GLOSSARY OF TERMS 
 
   The following is a glossary of technical terms: 
 
   "Au" means gold. 
 
   "assay" in economic geology, means to analyse the proportions of metal 
in a rock or overburden sample; to test an ore or mineral for 
composition, purity, weight or other properties of commercial interest. 
 
   "development" - excavations used to establish access to the mineralised 
rock and other workings 
 
   "DNPM" is the Departamento Nacional de Produção Mineral. 
 
   "grade" is the concentration of mineral within the host rock typically 
quoted as grammes per tonne (g/t), parts per million (ppm) or parts per 
billion (ppb). 
 
   "g/t" means grams per tonne. 
 
   "granodiorite" is an igneous intrusive rock similar to granite. 
 
   "igneous" is a rock that has solidified from molten material or magma. 
 
   "Intrusive" is a body of igneous rock that invades older rocks. 
 
   "on-lode development" - Development that is undertaken in and following 
the direction of the Vein 
 
   "mRL" -- depth in metres measured relative to a fixed point -- in the 
case of Palito and Sao Chico this is sea-level.  The mine entrance at 
Palito is at 250mRL. 
 
   "saprolite" is a weathered or decomposed clay--rich rock. 
 
   "scrubber" -- a machine for cleaning ore and removing impurities such as 
clays, coatings or other deleterious materials. 
 
   "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 
 
 
 
 
 
   Attachment 
 
 
   -- Q3 2019 Operational Update PDF version 
      https://ml-eu.globenewswire.com/Resource/Download/89decf90-5363-44de-b408-dc2c4c7f6b9b 
 
 
 
 
 
 
 

(END) Dow Jones Newswires

October 14, 2019 02:00 ET (06:00 GMT)

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