For immediate
release 23
October 2017
Serabi Gold plc("Serabi" or the
"Company")
Strong third quarter production consolidating
2017 production.
Serabi Gold plc (AIM:SRB, TSX:SBI), the
Brazilian focused gold mining and development company, is pleased
to report third quarter production of 9,657 ounces of gold at its
Palito/Sao Chico high grade gold operation in the Tapajos region of
Para State, Northern Brazil.
HIGHLIGHTS
- Third quarter production of 9,657 ounces of
gold.
- Mine production totalled 41,263 tonnes at 9.80 grammes per
tonne ("g/t") of gold.
- 44,954 tonnes processed through the plant for the combined
mining operations, with an average grade of 7.21 g/t of gold.
- 2,996 metres of horizontal mine development completed in the
quarter.
- The Palito orebody saw development and production focus on the
Senna, Pipocas, G3 and Mogno veins principally, with three other
veins, (Zonta, G1, Jatoba) in development.
- The mine ramp accessing the Sao Chico orebody has now reached
the 26mRL, approximately 230 vertical metres below
surface. Production is coming from the 128mRL and
100mRL levels with levels 86mRL, 70mRL, 56mRL, 40mRL and now 26mRL
all either developed or being development, comfortably ahead of
production.
- By the end of the third quarter, surface ore stocks were
approximately 15,000 tonnes (30 June 2017: 12,000 tonnes) with an
average grade of 3.2 g/t of gold.
- An initial 8,000 metre surface drill programme to commence
before the end of the year.
Mike Hodgson, CEO, said:
"Following an excellent first quarter and a
moderate second quarter, it is very satisfying to report that the
operation has bounced back and performed very well in the third
quarter of the year. With approximately 9,700 ounces of gold
produced in the quarter, the Company's total production for the
year to date is now approximately 28,000 ounces.
"Mine production from both the Palito and Sao
Chico orebodies progressed well, and there were improvements in the
average grades mined from both orebodies during the third quarter,
with average mined grades of over 9 g/t of gold being
reported. Mine developmentfrom the Sao Chico orebody in
particular has been very encouraging, especially on the 40mRL, the
lowest level currently in development. To date, the 40mRL
level exhibits greater than forecast payable strike lengths
compared with the upper levels. We are eagerly anticipating
the next level, the 26mRL, to see if this trend continues.
The exciting results from level 40mRL has meant mill feed ore from
the Sao Chico orebody is predominantly from development and
relatively little from stoping. In addition, development is
now comfortably ahead of stoping, with over two years of ore now
developed and 'blast ready' at current production
rates.
"At the Palito orebody, seven veins out of
the 25 veins that comprise the total geological resource, are now
in various stages of development and production. The Pipocas,
G3, and Senna veins remain the backbone of our sources of ore, with
smaller contributions from the newly developed Jatoba, Mogno, Zonta
and G1 veins. As was reported in the Company's second quarter
operational update, the G3 vein has been intersected on the -50mRL,
the lowest level in the mine, and development on this level has
been on-going through the third quarter. The mineralised vein
remains strong, with very good grades being encountered. The
Pipocas vein is in development on the 30mRL and 0mRL levels, with
deepening underway to access the
-30mRL
level.
"In the plant, the performance during the
quarter was excellent, with approximately 45,000 tonnes of run of
mine ore ("ROM") milled. With 41,000 tonnes having been
mined, the balance of the plant throughput was made up by
processing the low grade surface stockpiled ore. However,
with over 15,000 tonnes of coarse ore still in stockpiles and over
35,000 tonnes of flotation tails stockpiled (with an average grade
of around 3g/t of gold) and this level having been fairly static
since 2014, we remain plant constrained, which is both comforting
and frustrating.
"With current plant limitations, we have had
little success in running down the levels of the flotation tails,
for two primary reasons. To date we have pumped the tailings
'wet' to the CIP plant, but this has proved to be slow and labour
intensive. Passing the material 'dry' through the ore feed
system is restricted by belt capacity, and therefore we would be
displacing higher grade ore. We are now designing and
constructing an independent conveyor to feed these tails directly
into the ball mills, which means this material can be added to the
current dry mill feed, and therefore increase the levels that can
be treated each month. We hope to be operational with this
solution by mid-November.
"One very encouraging development this year has
been our test work on ore sorting on the Palito and Sao Chico ores.
We are mining narrow veins with an approximate width of 0.5 metres,
and whilst we employ the most selective methods possible,
unavoidably our minimum stope mining width is generally 1.0 metre.
Therefore, despite excellent mining quality, we still experience
considerable dilution from stope mining with even higher levels in
the development mining activities. Having undertaken test work
initially in Brazil and more recently on bulk samples at the
manufacturer's facilities in Poland, we have achieved excellent
results using X-ray scanning to physically separate crushed ore
between the sulphide bearing ore and granite waste. The
contrast and results have been quite remarkable. The
intention now is to introduce an X-ray ore sorter after the main
crushing plant that will separate material ahead of milling and
remove from the mill feed a significant percentage of the waste
that would otherwise have formed part of the feed into the
plant. Not only will this reduce process costs per ounce
recovered, it will also liberate capacity in a mill constrained
operation. We therefore hope we can debottleneck the plant
using this technology, elevating mill feed grade in the process,
and freeing up plant capacity for the future organic
growth. This equipment is unfortunately built to order
and we anticipate it will take between nine months and a year
before it can be fabricated, installed and commissioned.
Payback of the estimated US$1.2 million cost is however expected to
be less than 12 months.
"On the subject of organic growth, with improved
metal prices and exchange rates, we have recently been enjoying
better margins and cash generation. We have now been able to
commit to an initial 8,000 metre surface drill programme, which
will focus on drilling the many potential vein extensions we have
at Palito."
"The full programme that we would like to
undertake is substantially greater than 8,000 metres, and, both
orebodies could benefit from significantly higher levels of strike
extension drilling. The Palito orebody hosts a resource that
extends over a one kilometre strike length, but sits within a trend
that now clearly indicates the veins mineralisation is traceable
over approximately four kilometres. The continuity of the ore
payability in these veins remains to be seen, but clearly only
drilling will determine this. The Sao Chico orebody is
completely open along strike with very little information outside
the immediate mine limits. Again there are strong indications
that substantial strike extensions of the principal vein and
adjacent veins are waiting to be defined.
"Ultimately, we have plans that would involve a
much more ambitious drilling programme targeting a two million
ounce total mineral resource across the two ore-zones, with the
full programme, totalling 60,000 meters, to be completed in two
phases. This initial 8,000 metres forms part of phase one and
is a programme we can start comfortably and commit to out of
operational cash flow. Drilling will get underway in
November, and I look forward to updating you on this during the
first quarter of 2018.
http://hugin.info/137617/R/2143365/821257.png
Indicative locations and allocation of the
planned 8,000 metre drill programme (Please click on hyperlink to
access image)
"This excellent third quarter has been extremely
satisfying, after the slight disappointment of the second
quarter. The plant is always full, and rarely misses a beat,
and with the ore blocks to be mined in this current fourth quarter
and a healthy stockpile in front of the plant, I see every reason
to look forward to a good final three months of the
year."
Results
Total production for the third quarter of 2017
was 9,657 ounces of gold, generated from the processing of 44,954
tonnes of ore at overall average grades of 7.21 g/t of 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 41,263
tonnes with a grade of 9.80 g/t of gold.
At 30 September 2017, there were coarse ore
stocks of approximately 15,000 tonnes of ore with an average grade
of 3.20 g/t of gold, and approximately 35,000 tonnes of flotation
tails with an average grade of 3.00 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 2,996 metres of horizontal
development has been completed during the quarter, of which
approximately 1,489 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 All In Sustaining Cost of between
$950 and $975 per ounce, broadly in line with the cost guidance of
2016. Gold production for the first nine months remains
broadly in line with the Company's forecast.
With year to date production standing at 27,666
ounces, an additional fourth quarter of 10,000 ounces forecast
should result in full year production of a minimum of approximately
38,000 ounces. Management hope that production for the fourth
quarter will improve on prior quarters with the addition of
increased levels of processing of 2014 flotation tails during the
final quarter, a benefit which will continue through 2018 as
well.
|
|
Quarter
1 |
Quarter
2 |
Quarter
3 |
Total |
Total |
Total |
|
|
2017 |
2017 |
2017 |
2017 |
2016 |
2015 |
Horizontal
development |
Metres |
2,251 |
1,855 |
2,996 |
7,102 |
11,209 |
9,600 |
|
|
|
|
|
|
|
|
Mined ore |
Tonnes |
36,918 |
42,075 |
41,263 |
120,256 |
158,864 |
135,847 |
|
Gold grade (g/t) |
10.12 |
7.80 |
9.80 |
9.20 |
9.74 |
9.80 |
|
|
|
|
|
|
|
|
Milled ore |
Tonnes |
46,663 |
43,905 |
44,954 |
135,522 |
158,966 |
130,299 |
|
Gold grade (g/t) |
7.09 |
6.26 |
7.21 |
6.86 |
8.11 |
8.43 |
Gold production |
Ounces |
9,861 |
8,148 |
9,657 |
27,666 |
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 4,941
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 |
|
Ross
Allister |
Tel: +44
(0)20 7418 8900 |
Chris
Burrows |
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 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 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
Attachments:
A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/58fa6117-5c00-4b99-a835-29eb2af611d4
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