For immediate
release 26
July 2017
Serabi Gold plc("Serabi" or the
"Company")
Strong second quarter production
consolidating mid-year position with guidance maintained.
Serabi Gold plc (AIM:SRB, TSX:SBI), the
Brazilian focused gold mining and development company, is pleased
to report second quarter production of 8,148 ounces of gold its
Palito/Sao Chico high grade gold operation in the Tapajos region of
Para State, Northern Brazil.
HIGHLIGHTS
- Second quarter production of 8,148 ounces of
gold.
- Mine production totalled 42,075 tonnes at 7.80 grammes per
tonne ("g/t") of gold.
- 43,905 tonnes processed through the plant for the combined
mining operations, with an average grade of 6.26 g/t of gold.
- 1,855 metres of horizontal mine development completed in the
quarter.
- At the Palito sector, expansion of working areas continues,
with development and production now coming from eight veins from
the 25 included in the geological resource. The main
ramp has now reached the -50mRL, with the G3 vein intersected, the
deepest working area in the deposit. To date grades have been
very encouraging.
- At the Sao Chico sector, the main ramp has now been deepened to
the 40mRL, approximately 200 vertical metres below
surface. Production is coming from the 140mRL and
128mRL levels with levels 116mRL, 100mRL, 86mRL, 70mRL and now
40mRL being developed, so development remains well ahead of
production.
- By the end of the second quarter, surface ore stocks were
approximately 12,000 tonnes (31 March 2017: 13,000 tonnes) with an
average grade of 3.15 g/t of gold.
The following link can be used to access an
interview by BRR Media with Mike Hodgson, CEO discussing the second
quarter operational results
https://www.brrmedia.co.uk/broadcasts-embed/597739289ff3a6521c9fd7ce/event/?livelink=true
Mike Hodgson, CEO, said:
"Following an excellent first quarter, when
the Company produced almost 10,000 ounces of gold, we have enjoyed
a satisfactory second quarter with further production of over 8,000
ounces. With the mid-year total standing at over 18,000
ounces, we can be very satisfied with the production results for
the year to date.
"Mine production from both the Palito and Sao
Chico sectors progressed well, although grades were a little lower
than scheduled for April and May, resulting in the second quarter
gold production being lower than that of the first quarter.
The lower grades which were behind this, were largely a result of
an operational issue (as further detailed below) in the Sao Chico
sector, where planned higher grade stope production had to be
replaced by lower grade development ore. Production improved
significantly in June and the operational issue has now been fully
resolved. We therefore remain confident that full year
production guidance will be achieved. At the Palito sector,
production remained steady.
"Overall mining rates of the Sao Chico
orebody were in line with forecasts though whilst the average grade
at 8.30 g/t is very reasonable, it was below our budget and less
than the 'highs' of the first quarter where we mined ore with
average grades in excess of 12 g/t. The reason behind this
decrease was quite simple. The stoping method at Sao Chico
requires the use of remote controlled loaders to muck the broken
ore. As noted in our first quarter update, stoping has only
recently begun at the Sao Chico orebody, and therefore we are still
in the process of building up our fleet. During the first
quarter, we had one new loader with a second new unit planned to
arrive in June. Unfortunately the first loader, although
itself only four months old, suffered a major mechanical problem
and this impacted significantly on our stope production during
April and much of May. As a result, we had to use development
ore to provide mill feed. Ore recovered from
development mining is unavoidably more diluted and is therefore
generally lower grade. By June, with the original unit
returned to full operation and the second new unit commissioned and
operating, production improved significantly, borne out by 42 per
cent of the gold production from the Sao Chico orebody for the
second quarter of 2017 being achieved in June. With the
additional development completed in the quarter, making available
additional stoping blocks, we feel confident, the second quarter
shortfall will be recovered over the remainder of the year and we
will meet our full year production guidance of 40,000
ounces.
"At the Palito orebody, over eight veins are
now in various stages of development, with production mainly coming
from the Pipocas, G3, Senna and Jatoba veins. The G3 vein has
now been intersected on the -50mRL, our lowest level in the mine,
with excellent grades being encountered. The other main vein,
Pipocas, is now being developed on the 30mRL, and it too is
exhibiting some excellent long-term potential.
"In the plant, the quarterly performance was
excellent, with approximately 43,000 tonnes of run of mine ore
("ROM") milled. With 42,000 tonnes mined, the small
difference was made up from the low grade development stockpile
which has shown minimal change between the end of the first quarter
and the end of this quarter. We remain mill limited, and for
this reason we have sought to reduce development rates to try to
make inroads into these surface stockpiles, though as we can see,
the mine has continued to generate sufficient ROM.
"As I reported last quarter, during the
latter half of 2016 the Company reported that, following the
extension of its exploration license holdings around the Sao Chico
orebody, it had recommenced surface exploration, with an IP
geophysical survey. The results revealed two excellent
anomalies 600 metres to the north and 300 metres to the south of
the current mining operations, which, from a geophysical
perspective, look even stronger than the orebody being mined.
These anomalies appear to possess a geometry consistent with the
known orebody and the potential for parallel mineralisation.
These targets are just beyond the capability of the underground
drill rigs we have, hence we have not been able to recommence the
programme as planned and will now pursue this during the second
half of the year.
"Exploration and evaluation drilling
underground continued with approximately 2,000 metres of diamond
drilling completed. This drilling is focusing on drilling
into inferred resources of the down dip extension of the Main Vein
in the Sao Chico orebody as well as the inferred resource in the
Senna, Pipocas and G3 veins in the Palito
sector.
"Following the excellent first quarter,
this second quarter has been satisfying given the issues that we
faced in April and early May, and I am pleased to say the
improvement in the latter part of May and an excellent June has got
things back on track for the year as a whole. This
improvement has continued in July which to date has also been a
very good month, so we look forward to a good third quarter.
With the dry season upon us, we also hope to see our exploration
efforts stepped up during the second half of the year."
Results
Total production for the second quarter of 2017
was 8,148 ounces of gold, generated from the processing of the ROM
ore from the Palito and Sao Chico sectors, combined with the Palito
surface coarse ore and the stockpiled flotation tailings
accumulated from Palito mine production in 2014.
Gold production for the second quarter came from
the processing of 43,905 tonnes of ore at overall combined grades
of 6.26 g/t gold, which 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 42,075 tonnes with a grade of 7.80 g/t of
gold.
At 30 June 2017, there were coarse ore stocks of
approximately 12,000 tonnes with an average grade of 3.15 g/t of
gold, and approximately 35,000 tonnes of flotation tails with an
average grade of 2.50 g/t of gold. This stock is being consumed,
albeit not as quickly as forecast, and for now the operation
remains plant constrained.
A total of 1,855 metres of horizontal
development has been completed during the quarter, of which
approximately 950 metres was ore development. The balance is
the ramp, cross cuts and stope preparation development.
2017 Guidance
The Company forecast 40,000 ounces of gold
production for the year, with an AISC of between $950 and $975 per
ounce, broadly in line with the cost guidance of 2016. Gold
production for the first half remains broadly in line with the
Company's forecast.
The 2017 guidance of 40,000 ounces is an eight
per cent improvement on Serabi's initial guidance for 2016 which
was 37,000 ounces. Management hope that despite the operational
challenges faced in April and May, production efficiencies and
improvements will allow Serabi to meet its production guidance.
|
|
Quarter 1 |
Quarter 2 |
Total |
H1 |
H2 |
Total |
Total |
2017 |
2017 |
2017 |
2016 |
2016 |
2016 |
2015 |
Horizontal development
- Palito |
Metres |
1,669 |
1,393 |
3,062 |
3,810 |
3,605 |
7,345 |
6,800 |
Horizontal development
- Sao Chico |
Metres |
582 |
462 |
1,044 |
2,056 |
1,738 |
3,794 |
2,800 |
Horizontal development
- Total |
Metres |
2,251 |
1,855 |
4,106 |
5,866 |
5,343 |
11,209 |
9,600 |
|
|
|
|
|
|
|
|
|
Mined ore - Palito |
Tonnes |
26,093 |
27,890 |
53,983 |
51,950 |
66,527 |
118,477 |
111,751 |
|
Gold grade (g/t) |
9.07 |
7.55 |
8.29 |
11.18 |
8.41 |
9.62 |
10.05 |
Mined ore - Sao
Chico |
Tonnes |
10,825 |
14,185 |
25,010 |
19,202 |
21,185 |
40,387 |
24,096 |
|
Gold grade (g/t) |
12.64 |
8.30 |
10.18 |
8.04 |
12.00 |
10.12 |
8.66 |
Mined ore - Total |
Tonnes |
36,918 |
42,075 |
78,993 |
71,152 |
87,712 |
158,864 |
135,847 |
|
Gold grade (g/t) |
10.12 |
7.80 |
8.89 |
10.33 |
9.27 |
9.74 |
9.8 |
|
|
|
|
|
|
|
|
|
Milled ore |
Tonnes |
46,663 |
43,905 |
90,568 |
76,017 |
82,949 |
158,966 |
130,299 |
|
Gold grade (g/t) |
7.09 |
6.26 |
6.69 |
8.37 |
7.85 |
8.11 |
8.43 |
Gold production |
Ounces |
9,861 |
8,148 |
18,009 |
19,667 |
19,723 |
39,390 |
32,629 |
- Gold production figures are subject to amendment pending final
agreed assays of the gold content of the copper/gold concentrate
and the gold bullion when smelting and refining processes are
completed.
- Gold production totals for 2017 include treatment of 4,042
tonnes of flotation tails (2016 full year: 16,716 tonnes)
This announcement is inside information for the
purposes of Article 7 of Regulation 596/2014.
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 LimitedNominated Adviser and Financial Adviser |
|
Roland
Cornish |
Tel: +44
(0)20 7628 3396 |
Michael
Cornish |
Tel: +44
(0)20 7628 3396 |
|
|
Peel
Hunt LLPUK Broker |
|
Matthew
Armitt |
Tel: +44
(0)20 7418 8900 |
Ross
Allister |
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
analyze 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 grams per tonne (g/t), parts per
million (ppm) or parts per billion (ppb).
"g/t" means grams per tonne.
"granodiorite" is an igneous intrusive rock
similar to granite.
"igneous" is a rock that has solidified from
molten material or magma.
"Intrusive" is a body of igneous rock that
invades older rocks.
"on-lode development" - Development that is
undertaken in and following the direction of the Vein
"mRL" - depth in metres measured relative
to a fixed point - in the case of Palito and Sao Chico this is
sea-level. The mine entrance at Palito is at 250mRL.
"saprolite" is a weathered or decomposed
clay-rich rock.
"stoping blocks" - a discrete area of
mineralised rock established for planning and scheduling purposes
that will be mined using one of the various stoping
methods.
"vein" is a generic term to describe an
occurrence of mineralised rock within an area of non-mineralised
rock.
Qualified Persons StatementThe 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 StatementsCertain
statements in this announcement are, or may be deemed to be,
forward looking statements. Forward looking statements are
identified 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 reflect 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
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