TIDMSRB
For immediate release
23 July 2018
Serabi Gold plc
("Serabi" or the "Company")
Operational Review of Second Quarter 2018
Serabi Gold plc (AIM:SRB, TSX:SBI), the Brazilian focused gold mining
and development company, is pleased to report gold production of 9,563
ounces for the second quarter of 2018 at its Palito Complex high grade
gold operation in the Tapajos region of Para State, Northern Brazil.
CORPORATE HIGHLIGHTS
-- Completion of GBP6.4 million brokered share placement to follow the US$15
million investment made by Greenstone Resource II LP.
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, said:
"We enjoyed an excellent second quarter, producing 9,563 ounces of gold,
bringing total gold production for the year to date to 18,750 ounces,
remaining well on track to meet our annual production guidance. It has
been another quarter of consistency for mined grades, tonnage and plant
processing throughput. The mined grades were particularly pleasing
increasing from 7.49 g/t in the first quarter to an average of 8.12 g/t
for this second quarter.
"Development rates have improved as the year has progressed and much of
this has been down to the introduction of our 'new generation
mini-scoops', the first of which arrived on site during this second
quarter. These, along with a narrow-width face drilling jumbo, have
allowed us to advance much faster with less dilution and waste handling.
We are still analysing the overall effectiveness and cost benefits of
this equipment with a view to purchasing additional units, but so far,
the results have been excellent.
"The plant continued to perform very well during the quarter with over
43,000 tonnes processed, 38,000 tonnes of which was ROM ore from Palito
and Sao Chico which was supplemented by approximately 4,900 tonnes of
the historical flotation tails that are processed through the leaching
circuit. We have experienced difficulties in passing this material
through the front end of the process plant but have been able during
this quarter to get the system up and running. This material processed
during this quarter has had an average grade of nearly 4.0 g/t of gold
and is therefore very viable.
"At the Palito orebody, seven out of the 25 veins that comprise the
total geological resource are in various stages of development and
production. The Pipocas, G3, Senna, Zonta and Mogno veins remain the
main ore source with minor development on the Jatoba, Ipe, Compressor
and G1 veins.
"We continue to deepen the Sao Chico orebody and are now evaluating the
-3m level through development, as well as drilling as deep as the -50m
level, some 300 vertical metres from surface.
"On the mine-site exploration front, surface drill programmes are
underway on both orebodies. The Palito programme is testing the many
potential extensions of the known veins. The Sao Chico programme is
similarly testing the extension of the main structure east and west as
well as drilling the geophysical anomalies identified in the 2016 ground
geophysics programme, which we believe may indicate parallel structures.
"We hope to issue an exploration update early in the third quarter with
some of the results of this drilling campaign.
"As reported last quarter, after successful test work in 2017, the
Company has purchased an ore sorter. The ore sorter will screen the
crushed ore feed before it enters the milling circuit, eliminating the
elevated level of waste that currently finds its way into the process
plant. This will initially be installed to treat Palito ore, but we
will also use it to undertake our own test work on the Sao Chico ore,
which has shown initial promise to be amenable to sorting.
"Away from the operations, at Coringa, we continue to make progress on
the permitting of the project. The Environmental Impact Assessment
("EIA") was submitted late 2017, and we are now engaging with the state
environmental agency as to their questions and requests emanating from
the EIA submission.
"On the corporate front, the Greenstone placing and subsequent brokered
share issue has brought in aggregated gross proceeds of approximately
US$23.5 million. These funds have substantially strengthened the
Company's balance sheet and will allow significant acceleration of our
organic growth plans and outstanding capital programmes, as well as
continuing the progress at Coringa.
"During the year we expect to generate steady positive news flow,
starting with an exploration update early in the third quarter, as well
as licensing progress at Coringa. Our ambition remains to establish
ourselves as a significant gold producer in Brazil with a target of an
annualised production rate of 100,000 ounces within the next two years."
Results
Total production for the second quarter of 2018 was 9,563 ounces of gold,
generated from the processing of 43,016 tonnes of ore at overall average
grades of 7.33 g/t of gold. The processed ore was sourced from mined ore
from the Palito and Sao Chico orebodies, supplemented with lower grade
surface stockpiled ROM and flotation tailings. Mined tonnage for the
quarter totalled 36,071 tonnes with a grade of 8.12 g/t of gold.
On 30 June 2018, there were coarse ore stocks of approximately 7,800
tonnes of ore with an average grade of 3.5 g/t of gold, and
approximately 36,000 tonnes of flotation tails with an average grade of
3.0 g/t of gold. These stockpiles are being consumed, albeit not as
quickly as forecast, and for now the operation remains plant
constrained.
A total of 2,744 metres of horizontal development has been completed
during the quarter, of which approximately 1,290 metres was ore
development. The balance is the ramp, cross cuts and stope preparation
development.
2018 Production Guidance
Management does not anticipate a major shift in mine performance and
therefore hard rock gold production, in 2018 compared with 2017.
However, with the ability to process increased levels of stockpiled
flotation tails in 2018, 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.
Key Operational Information
SUMMARY PRODUCTION STATISTICS FOR 2018 YEAR TO DATE
AND 2017
Year
to
Qtr 1 Qtr 2 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.
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: +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: mailto:contact@serabigold.com
contact@serabigold.com
--------------------------------------------------
Website: http://www.serabigold.com
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 8900
James Bavister Tel: +44 (0)20 7418 8900
Blytheweigh
Public Relations
Tim Blythe Tel: +44 (0)20 7138 3204
Camilla Horsfall Tel: +44 (0)20 7138 3224
Copies of this announcement are available from the Company's website at
www.serabigold.com.
Neither the Toronto Stock Exchange, nor any other securities regulatory
authority, has approved or disapproved of the contents of this
announcement.
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.
"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
July 23, 2018 02:00 ET (06:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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