For immediate
release 18
January 2018
Serabi Gold plc("Serabi" or the
"Company")
Strong fourth quarter production to close the
year
Serabi Gold plc (AIM:SRB, TSX:SBI), the
Brazilian focused gold mining and development company, is pleased
to report its fourth and final quarter production of 9,337 ounces
of gold at its Palito/Sao Chico high grade gold operation in the
Tapajos region of Para State, Northern Brazil.
HIGHLIGHTS
- The acquisition of Chapleau Resources Ltd and its wholly owned
370,000 ounce Coringa gold deposit.
- Commencement of an initial 8,000 metre surface drill programme
at Palito in December 2017.
- Fourth quarter production of 9,337 ounces of gold.
- Total gold production for 2017 of 37,004
ounces.
- Mine production totalling 49,011 tonnes at 8.25 grammes per
tonne ("g/t") of gold.
- 43,345 tonnes processed through the plant for the combined
mining operations, with an average grade of 7.27 g/t of gold.
- 2,762 metres of horizontal mine development completed in the
fourth 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 has now reached level 10mRL,
approximately 245 vertical metres below surface.
Production is coming from levels 100mRL and 86mRL with levels
70mRL, 56mRL, 40mRL, 26mRL and 10mRL all either developed or in
development, nicely ahead of production.
- By the end of the year, surface ore stocks were approximately
15,000 tonnes, (September 2017: 15,000 tonnes) with an average
grade of 3.0 g/t of gold, together with approximately 40,000 tonnes
of flotation tailings grading approximately 3.0 g/t gold.
Mike Hodgson, CEO, said:
"I think it is fair to say we have enjoyed an
exciting end to the year. The acquisition of Coringa has been
the highlight of the fourth quarter, this being an asset we had
been keen to acquire for some time and one that, I feel, will serve
the Company well and bring great value over the coming
years. Our day-to-day business is gold production, and
I am also very pleased to report a very good final quarter, with
over 9,300 ounces of gold produced.
"Overall I am delighted with the Company's
performance over the second half of the year. Total gold
production for the year of 37,000 ounces compares with our initial
guidance at the start of 2017 of 40,000 ounces. Approximately
2,000 ounces of this shortfall arose during the second quarter from
short term operational problems, now fully resolved, commissioning
new underground fleet. Since then, we have seen two strong
quarters, with the mine running well and the plant at
capacity. We remain mill constrained as the static stockpile
levels illustrate and the reported operational statistics for both
the third and fourth quarters could not, realistically, have been
improved by much. I am, therefore, more than happy with the recent
performance and the year end results.
"The fourth quarter saw mine production
from both the Palito and Sao Chico orebodies performing well.
Average grades were maintained at over 8.0 g/t, and on-going mine
development is progressing as planned. I am particularly
pleased with how the Sao Chico orebody is shaping up, with the
payability of ore development seemingly improving with depth.
"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.
"In the plant, the performance during the
quarter was as good as we can reasonably expect. The plant is
at full capacity and continues to perform excellently. With
approximately 43,300 tonnes of run of mine ore ("ROM") milled this
represents a 7.5 per cent improvement on the same quarter in
2016. As I have mentioned in previous reports, the
existence of a 15,000 tonne coarse ore stockpile and a further
40,000 tonnes of stockpiled flotation tails (with an average grade
of around 3g/t of gold) on surface, is both a source of comfort and
frustration.
"During 2018, we will have in place an
additional independent conveyor to feed the flotation tails
directly into the ball mills, allowing this material to be added
directly to the current dry mill feed, and increasing the tonnage
of this material that can be treated each month. We hope this
operational improvement can be commissioned by the end of
January.
"As reported last quarter, the results of our
ore sorting test-work on the Palito ore have been excellent and we
plan to introduce this to the production flowsheet during
2018. We mine the veins at Palito as selectively as possible,
with head grades in excess of 8.0 g/t gold as evidence of this, but
the grade of the ore feed entering the plant can be further
improved using an ore sorter without compromising ounces. The
ore sorter can eliminate significant volumes of waste material that
are unavoidably in the ore feed, and consume plant capacity and
energy. Regrettably, with the lead time involved, we will not
see any real impact until late 2018 at best, but having had a
surface coarse-ore stockpile of between 15,000 tonnes and 25,000
tonnes since operations commenced, one can see the operation will
otherwise always be plant constrained. Payback of
the estimated US$1.2 million cost is expected to be less than 12
months.
"In December, we saw the long awaited start of a
surface exploration drill programme. The purpose of the
programme is to drill some of the many potential vein extensions
identified at Palito. The initial programme is for
approximately 8,000 metres but I hope that over the course of the
year we will be able to undertake further drilling, including, in
particular, a programme at Sao Chico. The Palito orebody
hosts a resource that extends over a one kilometre strike length,
but sits within a trend and there are now clearly indications that
have allowed the veins and their mineralisation to be traced over
approximately four kilometres. The continuity, grade and
payability of the ore in these veins still needs to be established,
but 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 up to two million
ounces of 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. I will be providing further updates on
this programme, as results are generated, during the first quarter
of 2018.
"A concern voiced by many investors about junior
gold production companies is their ability to consistently, month
after month, deliver on production. Serabi has now since the
start of 2016 enjoyed eight quarters of regular production and
averaged over 9,500 ounces of gold per quarter over this period,
which I feel clearly demonstrates our ability to deliver
consistency and stability.
"The acquisition of Coringa, it's permitting and
development over the forthcoming period along with successful
exploration results in 2018 will, we hope, form the basis of
significant expansion of gold production for Serabi, as we seek 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 fourth quarter of 2017
was 9,337 ounces of gold, generated from the processing of 43,345
tonnes of ore at overall average grades of 7.27 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 49,011
tonnes with a grade of 8.25 g/t of gold.
At 31 December 2017, there were coarse ore
stocks of approximately 15,000 tonnes of ore with an average grade
of 3.0 g/t of gold, and approximately 40,000 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 2,762 metres of horizontal
development has been completed during the quarter, of which
approximately 1,410 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
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 THE FOUR QUARTERS TO
31 DECEMBER 2017 |
|
|
Qtr 1 |
Qtr
2 |
Qtr
3 |
Qtr
4 |
Year
to Date |
Qtr
1 |
Qtr
2 |
Qtr
3 |
Qtr
4 |
Total |
|
2017 |
2017 |
2017 |
2017 |
2017 |
2016 |
2016 |
2016 |
2016 |
2016 |
|
Horizontal development
- Total |
Metres |
2,251 |
1,855 |
2,996 |
2,762 |
9,864 |
2,925 |
2,941 |
2,649 |
2,694 |
11,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mined ore - Total |
Tonnes |
36,918 |
41,684 |
41,263 |
49,011 |
168,876 |
37,546 |
33,606 |
43,133 |
44,579 |
158,864 |
|
|
Gold grade
(g/t) |
10.12 |
7.80 |
9.80 |
8.25 |
8.92 |
11.02 |
9.56 |
9.61 |
8.94 |
9.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Milled ore |
Tonnes |
41,722 |
43,294 |
44,205 |
43,345 |
172,565 |
36,615 |
39,402 |
42,464 |
40,485 |
158,966 |
|
|
Gold grade
(g/t) |
7.62 |
6.29 |
7.28 |
7.27 |
7.11 |
8.58 |
8.17 |
8.08 |
7.60 |
8.11 |
|
Gold production (1)
(2) |
Ounces |
9,861 |
8,148 |
9,657 |
9,337 |
37,004 |
9,771 |
9,896 |
10,310 |
9,413 |
39,390 |
|
- 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.
- Gold production totals for 2017 include treatment of 4,568
tonnes of flotation tails at a grade of 3.97 g/t (2016 full
year : 16,716 tonnes)
- 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:
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
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