For immediate
release 14
November 2017
Serabi Gold plc("Serabi" or the
"Company")Unaudited Interim Financial Results for the three
and nine month periods to 30 September 2017 and Management's
Discussion and Analysis
Serabi Gold (AIM:SRB, TSX:SBI), the Brazilian
focused gold mining and development company, today releases its
unaudited interim financial results for the three and nine month
periods ending 30 September 2017 and at the same time has published
its Management's Discussion and Analysis for the same period.
Key Financial Information
SUMMARY FINANCIAL STATISTICS FOR THE THREE AND NINE
MONTHS ENDING 30 SEPTEMBER 2017 |
|
3 months to 30 September 2017US$ |
9 months to 30 September 2017US$ |
3 months to 30 September 2016US$ |
9 months to 30 September 2016US$ |
Revenue |
12,908,790 |
36,225,050 |
16,209,753 |
42,120,928 |
Cost of
Sales |
(7,695,870) |
(24,558,180) |
(10,216,119) |
(25,828,941) |
Depreciation and
amortisation charges |
(2,934,986) |
(7,545,847) |
(2,907,161) |
(6,552,101) |
Gross
profit |
2,277,934 |
4,121,023 |
3,086,473 |
9,739,886 |
|
|
|
|
|
Profit / (loss)
before tax |
490,532 |
(337,135) |
743,503 |
2,305,731 |
Profit after
tax |
235,051 |
(770,629) |
465,480 |
1,471,662 |
Earnings per
ordinary share (basic) |
0.03c |
(0.11c) |
0.07c |
0.22c |
|
|
|
|
|
Average gold price received |
|
US$1,238 |
|
US$1,256 |
|
|
|
|
|
|
|
|
As at 30 September 2017US$ |
As at 31 December 2016US$ |
Cash
and cash equivalents |
|
|
9,753,385 |
4,160,923 |
Net
assets |
|
|
64,598,323 |
63,378,973 |
|
|
|
|
|
Cash
Cost and All-In Sustaining Cost ("AISC") |
|
|
|
|
|
|
|
9 months to 30 September 2017 |
9 months to 30 September 2016 |
Gold
production for cash cost and AISC purposes |
|
|
27,666 |
29,900 |
|
|
|
|
|
Total
Cash Cost of production (per ounce) |
|
|
US$795 |
US$772 |
Total AISC of production (per ounce) |
|
|
US$1,058 |
US$951 |
Key Operational Information
|
|
SUMMARY PRODUCTION STATISTICS FOR THE THREE QUARTERS TO
30 SEPTEMBER 2017 |
|
|
Quarter 1 |
Quarter 2 |
Quarter 3 |
Year
to Date |
Quarter 1 |
Quarter 2 |
Quarter 3 |
Quarter 4 |
Total |
2017 |
2017 |
2017 |
2017 |
2016 |
2016 |
2016 |
2016 |
2016 |
Horizontal development
- Total |
Metres |
2,251 |
1,855 |
2,996 |
7,102 |
2,925 |
2,941 |
2,649 |
2,694 |
11,209 |
|
|
|
|
|
|
|
|
|
|
|
Mined ore - Total |
Tonnes |
36,918 |
42,075 |
41,263 |
120,256 |
37,546 |
33,606 |
43,133 |
44,579 |
158,864 |
|
Gold grade (g/t) |
10.12 |
7.80 |
9.80 |
9.20 |
11.02 |
9.56 |
9.61 |
8.94 |
9.74 |
|
|
|
|
|
|
|
|
|
|
|
Milled ore |
Tonnes |
46,663 |
43,905 |
44,954 |
135,522 |
36,615 |
39,402 |
42,464 |
40,485 |
158,966 |
|
Gold grade (g/t) |
7.09 |
6.26 |
7.21 |
6.86 |
8.58 |
8.17 |
8.08 |
7.60 |
8.11 |
Gold production (1)
(2) |
Ounces |
9,861 |
8,148 |
9,657 |
27,666 |
9,771 |
9,896 |
10,310 |
9,413 |
39,390 |
(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
2017 include treatment of 4,941 tonnes of flotation tails (2016
full year : 16,716 tonnes)
Financial Highlights
- Cash Cost for the year to date of US$795 per ounce of
gold.
- All-In Sustaining Cost for the year to date of US$1,058 per
ounce of gold.
- Gross profit from operations for the first nine months of 2017
of US$4.12 million.
- Profit per share of 3 cents for Q3 and loss per share of 11
cents for the first nine months of 2017.
- Cash holdings of US$9.75 million at 30 September 2017.
- Average gold price of US$1,238 per ounce received on gold sales
in the first nine months of 2017.
2017 Guidance
- Forecast gold production for the fourth quarter of 2017 of
approximately 10,000 ounces to achieve full year production of
approximately 38,000 ounces.
- Cost guidance for 2017 of an All-In Sustaining Cost ("AISC") of
US$1,000 to US$1,025 per ounce.
Operational 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 in 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.
- A surface diamond drill programme of approximately 10,000
metres has commenced and will principally focus on the strike
extensions of the veins in the Palito orebody.
- The results of a new 43-101 Technical Report comprising the
geological resource and mineable reserve are close to completion
and are expected to be issued before the end of November.
Mike Hodgson, CEO of Serabi commented,
"It was very pleasing to see third quarter production returning
to expected levels, after a slightly disappointing second
quarter. We have now achieved total production for the first
nine months of the year of 27,666 ounces. Whilst a little
below the production for the same period in 2016, the shortfall was
simply due to a short term operational problem at Sao Chico during
April and May, when we lost remote scoop capability and therefore
had to rely on lower grade development ore for this period.
By June the problem was over, and we have seen strong monthly
productions figures since.
"Even more pleasing is the relative financial strength of the
Company at the end of the quarter, with cash holdings increasing to
over US$9.7 million. We have benefitted during the
third quarter from a relatively weak Real and a good gold price and
with so much of our costs being in Reais, it is the gold price in
Reais that really dictates our margins and cash generation.
"We have earmarked some of this cash to be reinvested back into
the operations and in addition to the acquisition of an ore-sorter,
other major capital investment include the acquisition of some new
mine trucks, and expansion our tailings management
facilities.
"We have also commenced a 10,000 metre surface drilling
programme which is concentrating on the strike extensions of the
veins at the Palito orebody. We anticipate this is just the
start of a larger programme which will identify new orebodies,
expand the resource base and support increased levels of gold
production in the longer term.
"Whilst profitability is down compared with 2016, it must be
remembered that not only is production slightly down, resulting in
lower revenue, but the Group has been impacted by the relative
strength of the Real in 2017 when compared with 2016.
The average exchange rate for the nine months to 30 September 2016
was BrR$3.55 to US$1.00 and BrR$3.15 to US$1.00 for the first nine
months of 2017 a swing of almost eleven per cent. Nonetheless
our operating costs for the nine months have fallen by almost US$2
million or over 7 percent, a reflection of the improvements and
efficiencies that we are constantly seeking to implement.
"We have reported a small profit before tax of US$0.5 million
for the third quarter which is a pleasing turnaround after the loss
reported for the second quarter and I hope that, if production
during the fourth quarter is in line with expectation, this can be
continued."
SERABI GOLD PLCCondensed Consolidated
Statements of Comprehensive Income
|
|
|
|
|
|
|
|
For the three months ended 30 September |
For the nine months ended30 September |
|
|
|
|
2017 |
2016 |
2017 |
2016 |
(expressed in US$) |
Notes |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
CONTINUING
OPERATIONS |
|
|
|
|
|
Revenue |
|
12,908,790 |
16,209,753 |
36,225,050 |
42,120,928 |
Operating expenses |
|
(7,295,870) |
(10,216,119) |
(23,938,180) |
(25,828,941) |
Provision for
impairment of inventory |
|
(400,000) |
- |
(620,000) |
- |
Depreciation of plant and equipment |
|
(2,934,986) |
(2,907,161) |
(7,545,847) |
(6,552,101) |
Gross
profit |
|
2,277,934 |
3,086,473 |
4,121,023 |
9,739,886 |
Administration
expenses |
|
(1,407,836) |
(1,267,898) |
(3,828,194) |
(3,812,218) |
Share based
payments |
|
(101,665) |
(101,072) |
(279,697) |
(249,828) |
Gain on disposal of
assets |
|
15,621 |
2,070 |
131,596 |
29,039 |
Operating profit |
|
784,054 |
1,719,573 |
144,728 |
5,706,879 |
Foreign exchange
loss |
|
(24,021) |
(28,860) |
(144,420) |
(101,268) |
Finance expense |
|
(269,532) |
(947,250) |
(337,543) |
(3,299,989) |
Investment income |
|
31 |
40 |
100 |
109 |
Profit / (loss)
before taxation |
|
490,532 |
743,503 |
(337,135) |
2,305,731 |
Income
tax expense |
|
(255,481) |
(278,023) |
(433,494) |
(834,069) |
Profit
/ (loss) for the period from continuing operations (1) (2) |
|
235,051 |
465,480 |
(770,629) |
1,471,662 |
|
|
|
|
|
|
Other
comprehensive incomeItems that may be reclassified
subsequently to profit or loss |
Exchange differences on translating foreign operations |
|
2,367,977 |
(588,314) |
1,710,282 |
9,041,254 |
Total comprehensive profit / (loss) for the period (2) |
|
2,602,028 |
(122,834) |
939,653 |
10,512,916 |
|
|
|
|
|
|
Profit / (loss) per ordinary share (basic) (1) |
3 |
0.03c |
0.07c |
(0.11c) |
0.22c |
Profit / (loss) per ordinary share (diluted) (1) |
3 |
0.03c |
0.06c |
(0.11c) |
0.21c |
(1) All revenue and expenses arise from continuing
operations. (2) The
Group has no non-controlling interests and all losses are
attributable to the equity holders of the parent company.
SERABI GOLD PLCCondensed Consolidated
Balance Sheets
|
|
As at |
As at |
As at |
|
|
30
September |
30
September |
31
December |
|
|
2017 |
2016 |
2016 |
(expressed in US$) |
|
(unaudited) |
(unaudited) |
(audited) |
Non-current
assets |
|
|
|
|
Deferred exploration
costs |
|
10,235,454 |
9,731,144 |
9,990,789 |
Property, plant and
equipment |
|
44,260,723 |
44,860,837 |
45,396,140 |
Deferred
Taxation |
|
3,164,441 |
- |
3,253,630 |
Total
non-current assets |
|
57,660,618 |
54,591,981 |
58,640,559 |
Current
assets |
|
|
|
|
Inventories |
|
7,196,529 |
7,865,290 |
8,110,373 |
Trade and other
receivables |
|
1,433,010 |
9,165,344 |
1,233,049 |
Prepayments and accrued
income |
|
4,950,976 |
2,652,081 |
3,696,550 |
Cash and
cash equivalents |
|
9,753,385 |
3,116,123 |
4,160,923 |
Total
current assets |
|
23,333,900 |
22,798,838 |
17,200,895 |
Current
liabilities |
|
|
|
|
Trade and other
payables |
|
5,313,706 |
6,564,033 |
4,722,139 |
Secured loan |
|
1,290,000 |
1,425,058 |
1,371,489 |
Trade and asset finance
facilities |
|
1,054,632 |
3,260,272 |
1,592,568 |
Derivative financial
liabilities |
|
732,470 |
262,000 |
- |
Accruals |
|
450,867 |
367,646 |
635,446 |
Total current liabilities |
|
8,841,675 |
11,879,009 |
8,321,642 |
Net
current assets |
|
14,492,225 |
10,919,829 |
8,879,253 |
Total
assets less current liabilities |
|
69,135,527 |
65,511,810 |
67,519,812 |
Non-current
liabilities |
|
|
|
|
Trade and other
payables |
|
2,276,769 |
2,275,312 |
2,211,078 |
Secured loan |
|
3,125,000 |
- |
- |
Provisions |
|
1,905,230 |
2,284,002 |
1,851,963 |
Trade and
asset finance facilities |
|
247,521 |
210,657 |
77,798 |
Total
non-current liabilities |
|
7,554,520 |
4,769,971 |
4,140,839 |
Net
assets |
|
64,598,323 |
60,741,839 |
63,378,973 |
Equity |
|
|
|
|
Share capital |
|
5,540,960 |
5,540,960 |
5,540,960 |
Share premium |
|
1,722,222 |
1,722,222 |
1,722,222 |
Option reserve |
|
1,355,583 |
1,237,581 |
1,338,652 |
Other reserves |
|
3,404,624 |
361,461 |
3,051,862 |
Translation
reserve |
|
(28,897,566) |
(30,185,281) |
(30,607,848) |
Distributable surplus |
|
81,472,500 |
82,064,896 |
82,333,125 |
Equity
shareholders' funds |
|
64,598,323 |
60,741,839 |
63,378,973 |
The interim financial information has not been audited and does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. Whilst the financial information included in
this announcement has been compiled in accordance with
International Financial Reporting Standards ("IFRS") this
announcement itself does not contain sufficient financial
information to comply with IFRS. The Group statutory accounts
for the year ended 31 December 2016 prepared under IFRS as adopted
in the EU and with IFRS and their interpretations adopted by the
International Accounting Standards Board have been filed with the
Registrar of Companies following their adoption by shareholders at
the next Annual General Meeting. The auditor's report on these
accounts was unqualified but did contain an Emphasis of Matter with
respect to the Company and the Group regarding Going Concern.
The auditor's report did not contain a statement under Section 498
(2) or 498 (3) of the Companies Act 2006.SERABI GOLD
PLCCondensed Consolidated Statements of Changes in
Shareholders' Equity
(expressed in US$) |
Share |
Share |
Share option |
Other |
Translation |
Retained |
|
|
capital |
premium |
reserve |
reserves (1) |
reserve |
earnings |
Total equity |
Equity
shareholders' funds at 31 December 2015 (audited) |
5,263,182 |
- |
2,747,415 |
450,262 |
(39,226,535) |
77,549,321 |
46,783,645 |
Foreign currency
adjustments |
- |
- |
- |
- |
9,041,254 |
- |
9,041,254 |
Profit
for the period |
- |
- |
- |
- |
- |
1,471,662 |
1,471,662 |
Total comprehensive
income for the period |
- |
- |
- |
- |
9,041,254 |
1,471,662 |
10,512,916 |
Warrants lapsed |
- |
- |
- |
(88,801) |
- |
88,801 |
- |
Shares Issued in
period |
277,778 |
1,722,222 |
- |
- |
- |
- |
2,000,000 |
Release of fair value
provision on convertible loan |
- |
- |
- |
- |
|
1,195,450 |
1,195,450 |
Share options lapsed in
period |
- |
- |
(1,759,662) |
- |
- |
1,759,662 |
- |
Share
option expense |
- |
- |
249,828 |
- |
- |
- |
249,828 |
Equity shareholders'
funds at 30 September 2016 (unaudited) |
5,540,960 |
1,722,222 |
1,237,581 |
361,461 |
(30,185,281) |
82,064,896 |
60,741,839 |
Foreign currency adjustments |
- |
- |
- |
- |
- |
2,958,630 |
2,958,630 |
Loss for
the period |
- |
- |
- |
- |
(422,567) |
- |
(422,567) |
Total comprehensive
income for the period |
- |
- |
- |
- |
(422,567) |
2,958,630 |
2,536,063 |
Transfer to taxation
reserve |
- |
- |
- |
2,690,401 |
- |
(2,690,401) |
- |
Share
option expense |
- |
- |
101,071 |
- |
- |
- |
101,071 |
Equity
shareholders' funds at 31 December 2016 (audited) |
5,540,960 |
1,722,222 |
1,338,652 |
3,051,862 |
(30,607,848) |
82,333,125 |
63,378,973 |
Foreign currency
adjustments |
- |
- |
- |
- |
1,710,282 |
- |
1,710,282 |
Loss for
the period |
- |
- |
- |
- |
- |
(770,629) |
(770,629) |
Total comprehensive
income for the period |
- |
- |
- |
- |
1,710,282 |
(770,629) |
939,653 |
Transfer to taxation
reserve |
- |
- |
- |
352,762 |
- |
(352,762) |
- |
Share options lapsed in
period |
- |
- |
(262,766) |
- |
- |
262,766 |
- |
Share
option expense |
- |
- |
279,697 |
- |
- |
- |
279,697 |
Equity
shareholders' funds at 30 September 2017
(unaudited) |
5,540,960 |
1,722,222 |
1,355,583 |
3,404,624 |
(28,897,566) |
81,472,500 |
64,598,323 |
- Other reserves comprise a merger reserve of US$361,461 and a
taxation reserve of US$3,043,163 (2016: merger reserve of US$
361,461 and a taxation reserve of US$2,690,401)
SERABI GOLD PLCCondensed Consolidated Cash
Flow Statements
|
For the three monthsended30
September |
For the nine months ended30
September |
|
2017 |
2016 |
2017 |
2016 |
(expressed in US$) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Operating
activities |
|
|
|
|
Profit /
(loss) before taxation |
235,051 |
465,480 |
(770,629) |
1,471,662 |
Depreciation -
plant, and equipment |
2,934,986 |
2,907,161 |
7,545,847 |
6,552,101 |
Net financial
expense |
293,522 |
976,071 |
481,863 |
3,401,148 |
Provision for
impairment of inventory |
400,000 |
- |
620,000 |
- |
Taxation |
255,481 |
278,023 |
433,494 |
834,069 |
Share-based
payments |
101,665 |
101,072 |
279,697 |
249,828 |
Foreign
exchange (gain) / loss |
(359,590) |
38,109 |
(319,030) |
207,785 |
Changes in
working capital |
|
|
|
|
|
(Increase) / decrease in
inventories |
(374,877) |
1,286,509 |
612,487 |
505,768 |
|
Decrease / (increase) in
receivables, prepayments and accrued income |
1,076,370 |
330,084 |
(1,500,915) |
(2,434,886) |
|
(Decrease) / increase in payables, accruals and provisions |
(409,010) |
(68,421) |
(405,421) |
1,411,427 |
Net cash inflow from operations |
4,153,598 |
6,314,088 |
6,977,393 |
12,198,902 |
|
|
|
|
|
Investing
activities |
|
|
|
|
Purchase of
property, plant and equipment and projects in construction |
(265,246) |
(713,069) |
(1,349,085) |
(2,840,740) |
Mine
development expenditures |
(1,191,322) |
(469,608) |
(3,155,641) |
(1,718,759) |
Exploration
and development expenditure |
- |
(247,479) |
(2,501) |
(247,479) |
Proceeds from
sale of assets |
59,659 |
2,070 |
175,634 |
29,039 |
Interest received |
31 |
40 |
100 |
109 |
Net cash outflow on investing activities |
(1,396,878) |
(1,428,046) |
(4,331,493) |
(4,777,830) |
|
|
|
|
|
Financing
activities |
|
|
|
|
Repayment of
short-term secured loan |
- |
(1,333,334) |
- |
(2,666,667) |
Draw-down of
short-term loan facility |
3,628,511 |
- |
3,628,511 |
- |
Draw-down
of short-term convertible loan facility |
- |
- |
- |
2,000,000 |
Receipts from
short-term trade finance |
- |
4,454,632 |
- |
16,355,730 |
Repayment of
short-term trade finance |
- |
(9,411,663) |
- |
(20,921,538) |
Payment of
finance lease liabilities |
(346,566) |
(161,210) |
(478,730) |
(542,731) |
Interest paid
and other finance costs |
(166,363) |
(125,901) |
(233,818) |
(624,233) |
Net cash inflow / (outflow) from financing
activities |
3,115,582 |
(6,577,476) |
2,915,963 |
(6,399,439) |
|
|
|
|
|
Net
increase / (decrease) in cash and cash equivalents |
5,872,302 |
(1,691,434) |
5,561,863 |
1,021,633 |
Cash and
cash equivalents at beginning of period |
3,832,218 |
4,774,537 |
4,160,923 |
2,191,759 |
Exchange difference on cash |
48,865 |
33,020 |
30,599 |
(97,269) |
Cash and cash equivalents at end of period |
9,753,385 |
3,116,123 |
9,753,385 |
3,116,123 |
Notes
1.
General InformationThe financial information set out above does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. Whilst the financial information included in
this announcement has been compiled in accordance with
International Financial Reporting Standards ("IFRS") this
announcement itself does not contain sufficient financial
information to comply with IFRS. A copy of the statutory accounts
for 2016 has been filed with the Registrar of Companies following
their adoption by shareholders at the last Annual General Meeting.
The full audited financial statements, for the year end 31
December 2016, do comply with IFRS.
2.
Basis of PreparationThese interim condensed consolidated
financial statements are for the three and nine month periods ended
30 September 2017. Comparative information has been provided for
the unaudited three and nine month periods ended 30 September 2016
and, where applicable, the audited twelve month period from 1
January 2016 to 31 December 2016. 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 2016 annual report.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 2016 and those envisaged for the financial
statements for the year ending 31 December 2017. The Group has not
adopted any standards or interpretation in advance of the required
implementation dates. It is not anticipated that the adoption
in the future of the new or revised standards or interpretations
that have been issued by the International Accounting Standards
Board will have a material impact on the Group's earnings or
shareholders' funds. These financial statements do not constitute
statutory accounts as defined in Section 434 of the Companies Act
2006.
- Going concern
On 1 February 2016, the Group announced that,
with effect from 1 January 2016, the Sao Chico Mine had achieved
Commercial Production. The Palito Mine has been in Commercial
Production since 1 July 2014.The Directors anticipate the Group now
has access to sufficient funding for its immediate projected
needs. The Group expects to have sufficient cash flow from
its forecast production to finance its on-going operational
requirements, to repay its secured loan facilities and to, at least
in part, fund exploration and development activity on its other
gold properties. On 30 June the Group completed a re-negotiation of
an increased secured loan facility of US$5 million (including the
existing loan to US$1.37 million). The new facility is
repayable by 31 December 2019 and the incremental funds were
received by the Company on 5 July 2017.The Directors consider that
the Group's operations are performing at the levels that they
anticipate, but the Group remains a small scale gold producer with
limited cash resources to support any unplanned interruption or
reduction in gold production, unforeseen reductions in the gold
price, or appreciation of the Brazilian currency, all of which
could adversely affect the level of free cash flow that the Group
can generate on a monthly basis. In the event that the Group
is unable to generate sufficient free cash flow to meet its
financial obligations as they fall due, or to allow it to finance
exploration and development activity on its other gold properties,
additional sources of finance may be required. Should
additional working capital be required the Directors consider that
further sources of finance could be secured within the required
timescale. On this basis, the Directors have therefore
concluded that it is appropriate to prepare the financial
statements on a going concern basis. However, there is no certainty
that such additional funds either for working capital or for future
development will be forthcoming and these conditions indicate the
existence of a material uncertainty, which may cast significant
doubt over the Group's ability to continue as a going concern and,
therefore, that it may be unable to realise its assets and
discharge its liabilities in the normal course of business.
The condensed consolidated financial statements do not include the
adjustments that would result if the Group was unable to continue
as a going concern.
(ii) Use of estimates and
judgementsThere have been no material revisions to the nature
and amount of changes in estimates of amounts reported in the 2016
annual financial statements.
(iii) ImpairmentAt each
balance sheet date, the Group reviews the carrying amounts of its
property, plant and equipment and intangible assets to determine
whether there is any indication that those assets have suffered
impairment. Prior to carrying out of impairment reviews, the
significant cash generating units are assessed to determine whether
they should be reviewed under the requirements of IFRS 6 -
Exploration for and Evaluation of Mineral Resources or IAS 36 -
Impairment of Assets. Such determination is by reference to the
stage of development of the project and the level of reliability
and surety of information used in calculating value in use or fair
value less costs to sell. Impairment reviews performed under IFRS 6
are carried out on a project by project basis, with each project
representing a potential single cash generating unit. An impairment
review is undertaken when indicators of impairment arise; typically
when one of the following circumstances
applies:(i)
sufficient data exists that render the resource uneconomic and
unlikely to be
developed(ii)
title to the asset is
compromised(iii)
budgeted or planned expenditure is not expected in the foreseeable
future(iv)
insufficient discovery of commercially viable resources leading to
the discontinuation of activitiesImpairment reviews performed under
IAS 36 are carried out when there is an indication that the
carrying value may be impaired. Such key indicators (though not
exhaustive) to the industry
include:(i)
a significant deterioration in the spot price of
gold(ii)
a significant increase in production
costs(iii) a
significant revision to, and reduction in, the life of mine planIf
any indication of impairment exists, the recoverable amount of the
asset is estimated, being the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been adjusted.If
the recoverable amount of an asset (or cash-generating unit) is
estimated to be less than its carrying amount, the carrying amount
of the asset (or cash-generating unit) is reduced to its
recoverable amount. Such impairment losses are recognised in profit
or loss for the year.Where an impairment loss subsequently
reverses, the carrying amount of the asset (or cash-generating
unit) is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no
impairment loss been recognised for the asset (or cash-generating
unit) in prior years. A reversal of an impairment loss is
recognised in profit or loss for the year.
3. Earnings per share
|
3 months ended 30 September
2017US$(unaudited) |
3 months ended 30 September 2016US$(unaudited) |
9 months ended 30 September
2017US$(unaudited) |
9 months ended 30 September 2016US$(unaudited) |
Profit / (loss) attributable to ordinary shareholders (US$) |
235,051 |
465,480 |
(770,629) |
1,471,662 |
Weighted average ordinary
shares in issue |
698,701,772 |
678,005,407 |
698,701,772 |
663,647,199 |
Basic profit/ (loss) per share (US cents) |
0.03 |
0.07 |
(0.11) |
0.22 |
Diluted ordinary shares
in issue (1) |
748,461,772 |
727,915,407 |
698,701,772 |
713,557,199 |
Diluted
profit / (loss) per share (US cents) |
0.03 |
0.06 |
(0.11)(2) |
0.21 |
- Assumes exercise of all options and warrants outstanding as of
that date where the Group has reported a profit for the
period.
- As the effect of dilution is to reduce the loss per share, the
diluted loss per share is considered to be the same as the basic
loss per share.
4.
Post balance sheet events
On 13 November 2017, Serabi signed a conditional acquisition
agreement to acquire 100 per cent. of the issued share capital and
inter-company debt of Chapleau Resources Ltd ("Chapleau"), a
Canadian registered company wholly-owned by Anfield Gold Corp
("Anfield"), which holds the Coringa gold project ("Coringa")
located in the Tapajos gold province in Para, Brazil.
Serabi will acquire the entire issued share capital of Chapleau
together with its outstanding inter-company debts owed to Anfield.
Serabi will make an initial payment to Anfield on closing of the
transaction ("Closing") of US$5 million in cash from
existing resources. A further US$5 million in cash is payable
within three months of Closing. A final payment of US$12
million in cash will be due upon the earlier of either the first
gold being produced or 24 months from the date of Closing. The
total proposed consideration for the acquisition amounts to US$22
million in aggregate.
The Agreement is conditional on a number of
items including:
- Completion by Serabi of its due diligence, including the
receipt of satisfactory legal opinions as to mining title, labour,
environmental and tax matters;
- Approval of the shareholders of Anfield and approval of the
TSX-V; and
- Approval of Serabi's secured lender (Sprott).
Pursuant to the Agreement, Anfield has provided
Serabi with certain indemnities in respect of future claims
relating to activities prior to Closing, including labour and tax
liabilities. In addition, the Agreement includes representations
and warranties from Anfield in favour of Serabi as would be
customary for a transaction of this nature both on execution of the
Agreement and at Closing.
Serabi has agreed, on Closing, to grant to
Anfield, subject to the approval of Serabi's secured lender and, if
required, sub-ordinated to any security granted by Serabi to its
secured lender, a pledge over the shares of Chapleau as security
for the full and irrevocable payment of the Deferred
Consideration.
Anfield proposes to hold its shareholder meeting
to approve the proposed transaction on 19 December 2017, and
Closing is anticipated to occur shortly thereafter.
Chapleau is not required to prepare audited
financial statements. Based on information provided by
Anfield and extracted from the unaudited consolidated financial
statements of Anfield to 31 December 2016, Chapleau on a
consolidated basis, reported a loss before taxation of C$22.3
million for the 12 month period ended 31 December 2016 after (i)
expensing exploration and evaluation expenditure of C$7.9 million,
(ii) recognising a foreign exchange loss of the capitalisation of
intergroup loans into shares of Chapleau Brazil of C$13.7 million,
and (iii) other one-off costs estimated at C$1.3 million. Chapleau
had no revenues. As at 30 June 2017 total assets and shareholders'
equity amounted to C$19.6 million and C$(20.3 million)
respectively, with shareholder loans totalling C$38.6 million. The
balance sheet carrying value of property, plant and equipment
associated with the Coringa project as at 30 June 2017 amounted to
C$16.6 million which excludes past exploration costs as these have
been expensed. As at 30 June 2017 Chapleau had net cash
and cash equivalents of C$2.5 million and except for intercompany
loans (amounting to C$38.6 million), which will be assigned to
Serabi on Closing, had no borrowings.
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 9000 |
Chris
Burrows |
Tel:
+44 (0)20 7418 9000 |
|
|
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.
The Company will, in compliance with Canadian
regulatory requirements, post the Unaudited Interim Financial
Statements and the Management Discussion and Analysis for the three
and nine-month periods ended 31 September 2017 on SEDAR at
www.sedar.com. These documents will also available from the
Company's website - www.serabigold.com.
Serabi's Directors Report and Financial
Statements for the year ended 31 December 2016 together the
Chairman's Statement and the Management Discussion and Analysis,
are available from the Company's website - www.serabigold.com and
on SEDAR at www.sedar.com.
This announcement is inside information for the purposes of
Article 7 of Regulation 596/2014.
GLOSSARY OF TERMSThe 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."doré - a semi-pure
alloy of gold silver and other metals produced by the smelting
process at a mine that will be subject to further refining."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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