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SRB Serabi Gold Plc

58.50
-1.00 (-1.68%)
16 Apr 2024 - Closed
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
  -1.00 -1.68% 58.50 58.00 59.00 59.50 58.50 59.50 193,670 08:49:45
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Gold Ores 58.71M -983k -0.0130 -45.00 44.3M

Serabi Gold plc Unaudited Interim Results For The Three And Nine Month Periods Ended 30 September 2023

30/11/2023 7:00am

UK Regulatory


Serabi Gold (LSE:SRB)
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From Oct 2023 to Apr 2024

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TIDMSRB 
 

Unaudited interim results for the three and nine month periods ended 30 September 2023

Serabi (AIM:SRB, TSX:SBI), the Brazilian focused gold mining and development company, today releases its unaudited results for the three and nine month periods ended 30 September 2023.

A copy of the full interim statements together with commentary can be accessed on the Company's website using the following link: https://bit.ly/47wRleY

"This has been another excellent quarter for Serabi as we seek to deliver consistent production and drive growth in the business" said Clive Line, Serabi's CFO. "Strong quarter on quarter production is supporting improving financials with EBITDA growing to US$8.79 million and continued growth of pre tax profits. Cash balances have grown to US$15.4 million (US$14.7 million net of cash held under the Vale Exploration Alliance) compared to US$7.2 million as at 31 December 2022, with net cash attributable to the Group increasing by US$2.4 million in the third quarter.

"With the very recent news of a threefold increase in mineral reserves at the Palito Complex confirming the continued longevity of the mine, and on-going development of Coringa being funded from cash flow, the first nine months have been very rewarding and we look forward with optimism."

Financial Highlights

   -- Gold production for the third quarter of 8,738 ounces (2022: 8,541 
      ounces) for total production for the year to date of 25,262 ounces (2022: 
      24,021 ounces). 
 
   -- Cash held at 30 September 2023 of US$15.4 million (31 December 2022: 
      US$7.2 million). 
 
   -- EBITDA for the nine-month period of US$8.79 million (2022: US$5.9 
      million). 
 
   -- Post tax profit for the nine month period of US$4.62 million (2022: loss 
      US$0.9 million), 
 
   -- Profit per share of 6.10 cents compared with a loss per share of 1.15 
      cents for the same nine month period of 2022. 
 
   -- Net cash inflow from operations for the nine-month period (after mine 
      development expenditure of US$2.6 million) of US$10.7 million (2022: 
      US$0.01 million inflow). 
 
   -- Average gold price of US$1,940 per ounce received on gold sales during 
      the nine month period (2022: US$1,810). 
 
   -- Cash Cost for the nine-month period to 30 September 2023 of US$1,253 per 
      ounce (nine months 2022 : US$1,353 per ounce) representing an seven 
      percent improvement compared to the same period of 2022. 
 
   -- All-In Sustaining Cost for the nine-month period to 30 September 2023 of 
      US$1,553 per ounce (nine months 2022 : US$1,662 per ounce) represents a 
      seven percent improvement compared to the same period of 2022. 

Key Financial Information

 
                                  SUMMARY FINANCIAL STATISTICS 
------------------------------------------------------------------------------------------------ 
                     9 months to         9 months to         3 months to         3 months to 
                   30 September 2023   30 September 2022   30 September 2023   30 September 2022 
                          US$                 US$                 US$                 US$ 
----------------  ------------------  ------------------  ------------------  ------------------ 
Revenue                   47,897,264          44,388,304          17,373,682          13,187,441 
Cost of sales           (34,405,882)        (34,078,338)        (13,341,448)        (10,809,753) 
Gross operating 
 profit                   13,491,382          10,309,966           4,032,234           2,377,688 
Administration 
 and share based 
 payments                (4,702,467)         (4,443,642)         (1,864,200)         (1,676,866) 
EBITDA                     8,788,915           5,866,324           2,168,034             700,822 
Depreciation and 
 amortisation 
 charges                 (3,409,994)         (4,596,838)         (1,384,957)         (1,673,593) 
Operating profit 
 before finance 
 and tax                   5,378,921           1,269,486             783,077           (972,771) 
                  ------------------  ------------------  ------------------  ------------------ 
 
Profit after tax           4,620,779           (870,520)           (359,112)         (2,943,459) 
                  ------------------  ------------------  ------------------  ------------------ 
Earnings per 
 ordinary share 
 (basic)                       6.10c             (1.15c)             (0.47c)             (3.89c) 
                  ------------------  ------------------  ------------------  ------------------ 
 
Average gold                US$1,940            US$1,810            US$1,930            US$1,720 
 price received 
 (US$/oz) 
                  ------------------  ------------------  ------------------  ------------------ 
 
 
                                  As at 
                               30 September        As at 
                                   2023       31 December 2022 
                                   US$              US$ 
                               (unaudited)       (audited) 
--------------------------    -------------  ----------------- 
Cash and cash equivalents        15,352,099          7,196,313 
Net assets                       88,032,963         81,523,603 
 
 
 
Cash Cost and 
All-In 
Sustaining Cost 
("AISC") 
---------------- 
                     9 months to   9 months to 30 September   12 months to 31 
                     30 September            2022              December 2022 
                         2023 
----------------    -------------  ------------------------  ----------------- 
Gold production        25,262 ozs                24,021 ozs         31,819 ozs 
for cash cost 
and AISC 
purposes 
                    -------------  ------------------------  ----------------- 
 
Total Cash Cost          US$1,253                  US$1,353           US$1,322 
of production 
(per ounce) 
                    -------------  ------------------------  ----------------- 
Total AISC of            US$1,553                  US$1,662           US$1,615 
production (per 
ounce) 
                    -------------  ------------------------  ----------------- 
 

Overview of the financial results

An improved level of gold production in the third quarter of the year of 8,738 ounces, a 9% increase on the first quarter and a 3% increase on the second quarter, has resulted in total production for the year to date of 25,262 ounces representing a 5% increase over the same period in 2022 (2022: 24,021 ounces). As a result, Serabi remains on track to meet its full year guidance of 33,500 to 35,000 ounces.

The cash balance at the end of September 2023 had increased to US$15.35 million (Dec 2022: US$7.2 million). This does include approximately US$0.60 million of funds held for the Vale Exploration Alliance but nonetheless the net cash attributable to the Group has increased by US$7.5 million during the first nine months of the year.

Cash cost for the year to date is US$1,253 per ounce which represents a small decrease compared to the half year when reported cash costs were US$1,258 per ounce and a significant reduction compared to the same nine month period of 2022 when a cash cost of US$1,353 was reported. AISC for the year to date is US$1,553 per ounce, which compares very favourably with the same nine month period of 2022 when an AISC of US$1,662 was reported, particularly given the levels of mine development incurred in the period, particularly at Coringa, creating the opportunity for longer term production growth. Capitalised mine development costs were US$2.6 million for the first nine months of 2023.

Gold sales for the first nine months of 2023 were 23,733 ounces, with inventory levels remaining steady following the increase in gold inventory experienced in the first quarter following the commissioning of new tanks in the leaching circuit. Consistent with the results for the first two quarters of 2023, amortisation costs are lower in this quarter than previously, a consequence of the reduced activity at Sao Chico and therefore minimal amortisation costs associated with this project. In addition, because Coringa is only in a trial mining phase and has not attained commercial production, the project costs are not currently subject to amortisation charges. In accordance with accounting regulations the gold sales and related operating costs of Coringa are being reflected in the Group's income statement.

On 10 May 2023, the Company announced that it had entered into an exploration alliance with Vale SA focused on the Matilda prospect and other large regional targets in the Tapajos region of Para, Brazil. The current exploration activity under this alliance is being funded in its entirety by Vale up to an initial US$5 million for the Phase 1 activities. However, Serabi is the operator and undertaking the activity either directly or using contractors where appropriate. Vale provides funding in advance to Serabi and at the end of the quarter, Serabi held US$0.60 million of cash that will be used to meet the accrued and future costs of the alliance exploration activity. The exploration costs being incurred under the alliance are not being capitalised but are being expensed through the Income Statement as they are incurred. Similarly, the funds being received from Vale are also being reported through the Income Statement as other income.

During May 2023, the Group settled a US$5.0 million export linked loan facility that had been advanced by Itau Bank BBA. The Group still has a further US$5.0 million export linked facility advanced by Santander Bank in Brazil which is due to be repaid in February 2024 and carries a fixed interest rate of 7.97%.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018.

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        t +44 (0)20 7246 6830 
   Chief Executive        m +44 (0)7799 473621 
   Clive Line        t +44 (0)20 7246 6830 
   Finance Director        m +44 (0)7710 151692 

e contact@serabigold.com

https://www.globenewswire.com/Tracker?data=xvYlNDZqaqzAueWC6syzhWYtALPbHAinbbaxFxhf2eYzM2rNrfMpmjjdVJnncOCS28arY7ruLcwkUxHYQlAK7P6cDfCE_VgY1PqfB5KzZSs= www.serabigold.com

BEAUMONT CORNISH Limited

Nominated Adviser & Financial Adviser

   Roland Cornish / Michael Cornish        t +44 (0)20 7628 3396 

PEEL HUNT LLP

Joint UK Broker

   Ross Allister                t +44 (0)20 7418 9000 

TAMESIS PARTNERS LLP

Joint UK Broker

   Charlie Bendon/ Richard Greenfield        t +44 (0)20 3882 2868 

CAMARCO

Financial PR

   Gordon Poole / Emily Hall                t +44 (0)20 3757 4980 

Copies of this announcement are available from the Company's website at www.serabigold.com.

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.

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 35 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, recognizing 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.

Neither the Toronto Stock Exchange, nor any other securities regulatory authority, has approved or disapproved of the contents of this news release.

See https://www.globenewswire.com/Tracker?data=xvYlNDZqaqzAueWC6syzhWYtALPbHAinbbaxFxhf2eZOokKMkIjZVBhNHdAjFjHmj4lqphtHDWRoTFZ2TEz0RgFLGzTVCP4PfSDbRU4Tx1E= www.serabigold.com for more information and follow us on twitter @Serabi_Gold

The following information, comprising, the Income Statement, the Group Balance Sheet, Group Statement of Changes in Shareholders' Equity, and Group Cash Flow, is extracted from the unaudited interim financial statements for the nine months to 30 September 2023.

 
                         For the three months ended    For the nine months ended 
                                30 September                  30 September 
                            2023           2022           2023           2022 
(expressed in 
US$)             Notes   (unaudited)    (unaudited)    (unaudited)   (unaudited) 
---------------  -----  -------------  -------------  -------------  ------------ 
CONTINUING 
OPERATIONS 
Revenue                    17,373,682     13,187,441     47,897,264    44,388,304 
Cost of sales            (11,769,256)    (9,808,516)   (32,463,690)  (33,077,101) 
Provision for 
 state sales 
 taxes 
 receivable                        --    (1,001,237)             --   (1,001,237) 
Stock 
impairment 
provision                          --             --      (370,000)            -- 
Depreciation 
 and 
 amortisation 
 charges                  (2,957,149)    (1,673,593)    (4,982,186)   (4,596,838) 
---------------  -----  -------------  -------------  -------------  ------------ 
Total cost of 
 sales                   (14,726,405)   (12,483,346)   (37,815,876)  (38,675,176) 
Gross profit                2,647,277        704,095     10,081,388     5,713,128 
Administration 
 expenses                 (1,934,235)    (1,654,689)    (4,834,129)   (4,250,706) 
Share-based 
 payments                    (52,151)       (65,195)      (138,017)     (279,117) 
Gain on 
 disposal of 
 assets                       122,186         43,018        269,679        86,181 
---------------  -----  -------------  -------------  -------------  ------------ 
Operating 
 profit/(loss)                783,077      (972,771)      5,378,921     1,269,486 
Other income -- 
 exploration 
 receipts            2      1,992,344             --      3,042,879            -- 
Other expenses 
 -- exploration 
 expenses            2    (1,856,520)             --    (2,876,431)            -- 
Foreign 
 exchange 
 (loss)/gain                 (43,421)       (91,446)         56,645        47,659 
Finance expense      3      (381,478)    (1,710,056)      (500,588)   (1,776,581) 
Finance income       3        199,792        115,966        703,823       268,590 
---------------  -----  -------------  -------------  -------------  ------------ 
Profit/(loss) 
 before 
 taxation                     693,794    (2,658,307)      5,805,249     (190,846) 
Income tax 
 expense             3    (1,052,906)      (285,152)    (1,184,470)     (679,674) 
---------------  -----  -------------  -------------  -------------  ------------ 
(Loss)/profit 
 after 
 taxation                   (359,112)    (2,943,459)      4,620,779     (870,520) 
---------------  -----  -------------  -------------  -------------  ------------ 
 
Other 
comprehensive 
income (net of 
tax) 
 
Exchange 
 differences on 
 translating 
 foreign 
 operations               (2,952,047)    (1,827,939)      1,751,104       158,834 
---------------  -----  -------------  -------------  -------------  ------------ 
Total 
 comprehensive 
 (loss)/profit 
 for the 
 period((1)               (3,311,159)    (4,771,398)      6,371,883     (711,686) 
---------------  -----  -------------  -------------  -------------  ------------ 
 
(Loss)/profit 
 per ordinary 
 share (basic)       5        (0.47c)        (3.89c)          6.10c       (1.15c) 
---------------  -----  -------------  -------------  -------------  ------------ 
(Loss)/profit 
 per ordinary 
 share 
 (diluted)           5        (0.47c)        (3.89c)          6.10c       (1.15c) 
---------------  -----  -------------  -------------  -------------  ------------ 
 
   (1)         The Group has no non-controlling interest and all profits are attributable to the equity holders of the Parent Company 

Balance Sheet as at 30 September 2023

 
 
                                As at              As at               As at 
(expressed in             30 September 2023   30 September 2022   31 December 2022 
US$)            Notes        (unaudited)         (unaudited)         (audited) 
--------------  ------   ------------------  ------------------  ----------------- 
Non-current 
assets 
Deferred exploration 
 costs                           19,775,603          12,236,052         18,621,180 
Property, plant and 
 equipment                       49,107,705          54,088,968         48,482,519 
Right of use assets               5,214,315           5,134,677          5,374,042 
Deferred taxes                    1,520,710             914,859          3,446,032 
Taxes receivable                  3,891,201           3,173,123          1,545,684 
-----------------------  ------------------  ------------------  ----------------- 
Total non-current 
 assets                          79,509,534          75,547,679         77,469,457 
-----------------------  ------------------  ------------------  ----------------- 
Current assets 
Inventories                       9,819,171           8,316,685          8,706,351 
Trade and other 
 receivables                      1,579,886           2,133,787          5,291,924 
Derivative 
financial 
assets                              197,864                  --                 -- 
Prepayments and accrued 
 income                           1,750,470           1,871,869          1,572,149 
Cash and cash 
 equivalents                     15,352,099          10,177,647          7,196,313 
-----------------------  ------------------  ------------------  ----------------- 
Total current assets             28,699,490          22,499,988         22,766,737 
-----------------------  ------------------  ------------------  ----------------- 
Current 
liabilities 
Trade and other 
 payables                         7,798,873           5,576,575          5,830,872 
Interest bearing 
 liabilities                      6,211,791           5,855,425          6,111,126 
Accruals                            593,435             431,126            461,857 
                         ------------------  ------------------  ----------------- 
Total current 
 liabilities                     14,604,099          11,863,126         12,403,855 
-----------------------  ------------------  ------------------  ----------------- 
Net current assets               14,095,391          10,636,862         10,362,882 
-----------------------  ------------------  ------------------  ----------------- 
Total assets less 
 current liabilities             93,604,925          86,184,541         87,832,339 
-----------------------  ------------------  ------------------  ----------------- 
Non-current 
liabilities 
Trade and other 
 payables                         3,884,102             463,323          3,800,886 
Interest bearing 
 liabilities                        304,262           1,200,297            837,293 
Deferred tax liability              130,967             628,231            480,922 
Long term 
state tax                                --           1,762,766                 -- 
Provisions                        1,252,631           2,676,992          1,190,175 
                                                                 ----------------- 
Total non-current 
 liabilities                      5,571,962           6,731,609          6,309,276 
-----------------------  ------------------  ------------------  ----------------- 
Net assets                       88,032,963          79,452,932         81,523,063 
-----------------------  ------------------  ------------------  ----------------- 
Equity 
Share capital                    11,213,618          11,213,618         11,213,618 
Share premium reserve            36,158,068          36,158,068         36,158,068 
Option reserve                      116,246           1,354,465          1,324,558 
Other reserves                   16,167,780          14,463,647         14,459,255 
Translation reserve            (64,525,667)        (68,489,336)       (66,276,771) 
Retained surplus                 88,902,918          84,752,470         84,644,335 
-----------------------  ------------------  ------------------  ----------------- 
Equity shareholders' 
 funds                           88,032,963          79,452,932         81,523,063 
-----------------------  ------------------  ------------------  ----------------- 
 

Statements of Changes in Shareholders' Equity

For the nine month period ended 30 September 2023

 
  (expressed in US$) 
                                                                        Share       Other 
                                               Share       Share       option      reserves   Translation    Retained      Total 
(unaudited)                                    capital     premium     reserve       (1)        reserve      Earnings      equity 
-------------------------------------------  ----------  ----------  -----------  ----------  ------------  -----------  ---------- 
Equity shareholders' funds at 31 December 
 2021                                        11,213,618  36,158,068    1,075,348  13,694,731  (68,648,170)   86,391,906  79,885,501 
-------------------------------------------  ----------  ----------  -----------  ----------  ------------  -----------  ---------- 
Foreign currency adjustments                         --          --           --          --       158,834           --     158,834 
Profit for the period                                --          --           --          --            --    (870,520)   (870,520) 
-------------------------------------------  ----------  ----------  -----------  ----------  ------------  -----------  ---------- 
Total comprehensive income for the period            --          --           --          --       158,834    (870,520)   (711,686) 
Transfer to taxation reserve                         --          --           --     768,916            --    (768,916)          -- 
Share incentives expense                             --          --      279,117          --            --           --     279,117 
-------------------------------------------  ----------  ----------  -----------  ----------  ------------  -----------  ---------- 
Equity shareholders' funds at 30 September 
 2022                                        11,213,618  36,158,068    1,354,465  14,463,647  (68,489,336)   84,752,470  79,452,932 
-------------------------------------------  ----------  ----------  -----------  ----------  ------------  -----------  ---------- 
Foreign currency adjustments                         --          --           --          --     2,212,565           --   2,212,565 
Profit for the period                                --          --           --          --            --    (112,527)   (112,527) 
-------------------------------------------  ----------  ----------  -----------  ----------  ------------  -----------  ---------- 
Total comprehensive income for the period            --          --           --          --     2,212,565    (112,527)   2,100,038 
Transfer to taxation reserve                         --          --           --     (4,392)            --        4,392          -- 
Share incentives expense                             --          --     (29,907)          --            --           --    (29,907) 
-------------------------------------------  ----------  ----------  -----------  ----------  ------------  -----------  ---------- 
Equity shareholders' funds at 31 December 
 2022                                        11,213,618  36,158,068    1,324,558  14,459,255  (66,276,771)   84,644,335  81,523,063 
-------------------------------------------  ----------  ----------  -----------  ----------  ------------  -----------  ---------- 
Foreign currency adjustments                         --          --           --          --     1,751,104           --   1,751,104 
Profit for the period                                --          --           --          --            --    4,620,779   4,620,779 
-------------------------------------------  ----------  ----------  -----------  ----------  ------------  -----------  ---------- 
Total comprehensive income for the period            --          --           --          --     1,751,104    4,620,779   6,371,883 
Transfer to taxation reserve                         --          --           --   1,708,525            --  (1,708,525)          -- 
Share incentives lapsed                              --          --  (1,346,329)          --            --    1,346,329          -- 
Share incentives expense                             --          --      138,017          --            --           --     138,017 
-------------------------------------------  ----------  ----------  -----------  ----------  ------------  -----------  ---------- 
Equity shareholders' funds at 30 September 
 2023                                        11,213,618  36,158,068      116,246  16,167,780  (64,525,667)   88,902,918  88,032,963 
-------------------------------------------  ----------  ----------  -----------  ----------  ------------  -----------  ---------- 
 
   (1)     Other reserves comprise a merger reserve of US$361,461 and a taxation reserve of US$15,806,319 (31 December 2022: merger reserve of US$361,461 and a taxation reserve of US$14,097,794). 

SERABI GOLD PLC

Condensed Consolidated Cash Flow Statements

 
                                                          For the three months      For the nine months 
                                                                  ended                     ended 
                                                              30 September              30 September 
                                                           2023         2022         2023         2022 
(expressed in US$)                                      (unaudited)  (unaudited)  (unaudited)  (unaudited) 
------------------------------------------------------  -----------  -----------  -----------  ----------- 
 
Post tax (loss)/profit for period                         (359,112)  (2,943,459)    4,620,779    (870,520) 
Depreciation -- plant, equipment and mining properties    2,957,149    1,673,593    4,982,186    4,596,838 
Provision for inventory impairment                               --           --      370,000           -- 
Increase in provision for long term taxes receivable             --    1,001,237           --    1,001,237 
Gain on asset disposals                                   (122,186)     (43,018)    (269,679)     (86,181) 
Net financial expense                                       225,107    1,685,536    (259,880)    1,460,332 
Provision for taxation                                    1,052,906      285,152    1,184,470      679,674 
Share-based payments                                         52,151       65,195      138,017      279,117 
Taxation paid                                             (415,722)        1,479    (811,612)    (129,983) 
Interest paid                                              (22,900)     (34,659)    (408,714)     (86,497) 
Foreign exchange (loss) / gain                             (45,098)       93,501    (117,170)     (62,406) 
Changes in working capital 
 (Increase)/decrease in inventories                       (696,001)    (731,322)    (696,782)  (1,126,128) 
 (Increase)/decrease in receivables, prepayments and 
  accrued income                                            (1,477)    1,018,749    2,763,565  (2,893,573) 
 Increase/(decrease) in payables, accruals and 
  provisions                                              1,550,835      562,581    1,798,796      222,587 
 -----------------------------------------------------  -----------  -----------  -----------  ----------- 
Net cash inflow from operations                           4,175,652    2,634,565   13,293,976    2,984,497 
------------------------------------------------------  -----------  -----------  -----------  ----------- 
 
Investing activities 
Purchase of property, plant and equipment and assets 
 in construction                                          (706,419)    (917,558)  (1,686,505)  (3,408,060) 
Mine development expenditure                            (1,274,305)  (1,029,512)  (2,613,395)  (2,878,974) 
Geological exploration expenditure                        (101,611)     (68,519)    (459,035)    (761,499) 
Pre-operational project costs                                    --           --           --  (2,266,252) 
Proceeds from sale of assets                                123,408       38,198      314,923      102,960 
Interest received                                           101,574      103,095      181,373      103,095 
------------------------------------------------------  -----------  -----------  -----------  ----------- 
Net cash outflow on investing activities                (1,857,353)  (1,874,296)  (4,262,639)  (9,108,730) 
------------------------------------------------------  -----------  -----------  -----------  ----------- 
 
Financing activities 
Receipt of short-term loan                                       --           --    5,000,000    4,868,170 
Repayment of short-term loan                                     --           --  (5,096,397)           -- 
Payment of finance lease liabilities                      (295,583)    (244,201)    (906,565)    (746,426) 
Net cash (outflow) / inflow from financing activities     (295,583)    (244,201)  (1,002,962)    4,121,744 
------------------------------------------------------  -----------  -----------  -----------  ----------- 
 
Net increase / (decrease) in cash and cash equivalents    2,022,716      516,068    8,028,375  (2,002,489) 
Cash and cash equivalents at beginning of period         13,285,447    9,819,882    7,196,313   12,217,751 
Exchange difference on cash                                  43,936    (158,303)      127,411     (37,615) 
------------------------------------------------------  -----------  -----------  -----------  ----------- 
Cash and cash equivalents at end of period               15,352,099   10,177,647   15,352,099   10,177,647 
------------------------------------------------------  -----------  -----------  -----------  ----------- 
 

Notes

1. Basis of preparation

These interim condensed consolidated financial statements are for the three and nine-month periods ended 30 September 2023. Comparative information has been provided for the unaudited three and nine-month periods ended 30 September 2022 and, where applicable, the audited twelve month period from 1 January 2022 to 31 December 2022. 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 2022 annual report.

The Directors have reviewed the principal risks and uncertainties facing the Group and have concluded that those facing the Group for the remaining three months of the current financial year are unchanged from the risks set out in the 2022 Annual Report and Accounts. In reaching this conclusion, the Directors considered changes in the internal and external environment during the intervening period which could threaten the Group's business model, future performance, liquidity, solvency or reputation. Details of these principal risks and how they are being managed are set out on pages 25 to 32 of the 2022 Annual Report and Accounts.

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 2022 and those envisaged for the financial statements for the year ending 31 December 2023.

Accounting standards, amendments and interpretations effective in 2023

The Group has not adopted any standards or interpretations in advance of the required implementation dates.

The following Accounting standards came into effect as of 1 January 2023

 
IFRS 17 Insurance Contracts, including Amendments         1 January 2023 
 to IFRS 17 
Classification of Liabilities as Current or Non-current   1 January 2023 
 (Amendments to IAS 1) and Classification of Liabilities 
 as Current or Non-current -- Deferral of Effective 
 Date 
 

There is no material impact on the financial statements from the adoption of these new accounting standards or amendments to accounting standards,

Certain new accounting standards and interpretations have been published that are not mandatory for the current period and have not been early adopted. These standards are not expected to have a material impact on the Company's current or future reporting periods.

These financial statements do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.

   (i)      Going concern 

At 30 September 2023 the Group held cash of US$15.35 million which represents an increase of US$8.16 million compared to 31 December 2022. This increase includes the receipt of a US$5.0 million loan, from Santander Bank in Brazil, on 22 February 2023. The proceeds raised from the loan are being used for working capital and also provided the Group with adequate liquidity to repay an existing US$5 million facility on 12

May 2023.   The net debt position (cash less interest bearing liabilities including leases) has improved from a negative net debt position of US$0.25 million at 31 December 2022 to a negative net debt position of US$8.84 million at 30 September 2023. 

Management prepares, for Board review, regular updates of its operational plans and cash flow forecasts based on their best judgement of the expected operational performance of the Group and using economic assumptions that the Directors consider are reasonable in the current global economic climate. The most recent plans assume that during 2023 the Group will continue gold production from its Palito Complex operation as well as increase production from the Coringa mine and will be able to increase gold production to exceed the levels of 2022.

The Directors will, however, continue to limit the Group's discretionary expenditures including the continued development of Coringa which, on a longer term basis, may require additional external sources of finance to be secured.

The Directors have concluded that, based on the current operational projections, it remains appropriate to adopt the going concern basis of accounting in the preparation of these interim unaudited financial statements. The Directors acknowledge that the Group remains subject to operational and economic risks and any unplanned interruption or reduction in gold production or unforeseen changes in economic assumptions may adversely affect the level of free cash flow that the Group can generate on a monthly basis and its ability to secure further finance as and when required The Directors consider that the Group will be able to secure the necessary external finance for the development of its Coringa project but that the timing of this may be dependent on the receipt of further permits and licences. The Directors believe that all the necessary permits and licenses will be awarded when all current information requests of the relevant authorities have been met.

2. Other Income and Expenses

Under its copper exploration alliance with Vale announced on 10 May 2023, the related exploration activities being undertaken by the Group under the management of a working committee (comprising representatives from Vale and Serabi), are being funded in their entirety by Vale up to a value of US$5 million during Phase 1 of the programme. The Group at this time has no certainty that the exploration for copper deposits will result in a project that is commercially viable recognising that exploration and development of copper deposits is not the core activity of the Group, there is a significant cost involved in developing new copper deposits and it is unlikely that without the financial support of Vale that the Group would independently seek to develop a copper project in preference to any of its existing gold projects and discoveries.

As a result, it is recognising both the funding received from Vale and the related exploration expenditures through its income statement. As this is not the principal business activity of the Group these receipts and expenditures are classified as other income and other expenses.

3. Finance Costs

 
                                            3 months                                9 months 
                     3 months ended           ended          9 months ended           ended 
                    30 September 2023   30 September 2022   30 September 2023   30 September 2022 
                       (unaudited)         (unaudited2         (unaudited3         (unaudited 
                          US$                 US$                 US$                 US$ 
 
Loss on 
revaluations of 
hedging 
derivatives            (226,883)               --                  --                  -- 
Interest expense 
 on short term 
 loan                       (106,197)            (79,272)           (349,515)           (133,131) 
Interest expense 
 on short term 
 trade loan                  (24,267)            (22,838)            (66,158)            (35,504) 
Interest and 
 fines on state 
 sales tax                         --         (1,503,742)                  --         (1,503,742) 
Interest on 
 finance leases              (24,131)           (104,204)            (84,915)           (104,204) 
Total finance 
 expense                    (381,478)         (1,710,056)           (500,588)         (1,776,581) 
Gain on 
 revaluation of 
 warrants                          --              12,871                  --             165,495 
Gain on 
revaluation of 
hedging 
derivatives                        --                  --             385,512                  -- 
Realised gain on 
 hedging 
 derivatives                   98,217                  --             136,938                  -- 
Interest income               101,575             103,095             181,373             103,095 
                   ------------------  ------------------  ------------------  ------------------ 
Total finance 
 income                       199,792             115,966             703,823             268,590 
                   ------------------  ------------------  ------------------  ------------------ 
Net finance 
 (expense)/income           (181,686)         (1,594,090)             203,235         (1,507,991) 
                   ------------------  ------------------  ------------------  ------------------ 
 

4. 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 recognised the amount of deferred tax income of US$23,113 (nine months to 30 September 2022 deferred tax charge of -- US$92,612).

The Group has also incurred a tax charge on profits in Brazil for the nine month period of US$1,207,583 (nine months to 30 September 2022 - US$587,062)

5. Earnings per share

 
                                                        3 months ended 30 September 2023  3 months ended 30 September 2022  9 months ended 30 September 2023  9 months ended 30 September 2022 
                                                                   (unaudited)                       (unaudited)                       (unaudited)                       (unaudited) 
------------------------------------------------------  --------------------------------  --------------------------------  --------------------------------  -------------------------------- 
(Loss) / profit attributable to ordinary shareholders 
 (US$)                                                                         (359,112)                       (2,943,459)                         4,620,779                         (870,520) 
------------------------------------------------------  --------------------------------  --------------------------------  --------------------------------  -------------------------------- 
Weighted average ordinary shares in issue                                     75,734,551                        75,734,551                        75,734,551                        75,734,551 
Basic (loss)/profit per share (US cents)                                         (0.47c)                           (3.89c)                             6.10c                           (1.15c) 
------------------------------------------------------  --------------------------------  --------------------------------  --------------------------------  -------------------------------- 
Diluted ordinary shares in issue (1)                                          75,734,551                        81,488,078                        75,734,551                        81,488,078 
Diluted (loss)/profit per share (US cents)                                   (0.47c)((2)                       (3.89c)((2)                             6.10c                       (1.15c)((2) 
------------------------------------------------------  --------------------------------  --------------------------------  --------------------------------  -------------------------------- 
 
   (1)   There were no share options outstanding at 30 September 2023 (30 September 2022: 1,750,000 options vested and exercisable as at 30 September 2022). At 30 September 2023 there were 2,075,400 Conditional Share Awards in issue under the Serabi 2020 Restricted Share Plan (the "2020 Plan") (with 459,800 Conditional Share Awards issued in 2020 and a further 1,615,600 Conditional Share Awards issued during the third quarter of 2023. The underlying shares to be issued pursuant to these Conditional Share Awards can only be issued at the end of the stipulated vesting period and also only if certain performance conditions have been met. During the period the Company announced that 404,700 Conditional Share Awards which had been issued in 2020 had lapsed as the performance conditions had not been achieved. The vesting period for the remaining 2,075,400 Conditional Share Awards has not yet been completed. Accordingly, none of the Conditional Share Awards that may be issued in the future have been included in the calculation of diluted earnings per share. 
   (2)   As a loss was recorded for the period the effect of dilution would be to reduce the loss per share. Accordingly the diluted loss per share is considered to be the same as the undiluted loss per share. 
   6.        Post balance sheet events 

Subsequent to the end of the period, there has been no item, transaction or event of a material or unusual nature likely, in the opinion of the Directors of the Company to affect significantly the continuing operation of the entity, the results of these operations, or the state of affairs of the entity in future financial periods.

 
 

(END) Dow Jones Newswires

November 30, 2023 02:00 ET (07:00 GMT)

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