For immediate
release 14
August 2017
Serabi Gold plc("Serabi" or the
"Company")Unaudited Interim Financial Results for the three
and six month periods to 30 June 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 six month
periods ending 30 June 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 SIX
MONTHS ENDING 30 JUNE 2017 |
|
3 months to 30 June 2017US$ |
6 months to 30 June 2017US$ |
3 months to 30 June 2016US$ |
6 months to 30 June 2016US$ |
Revenue |
10,142,676 |
23,316,260 |
14,232,086 |
25,911,175 |
Cost
of Sales |
(6,849,960) |
(16,862,310) |
(8,923,316) |
(15,612,822) |
Depreciation and amortisation charges |
(2,710,157) |
(4,610,861) |
(2,428,213) |
(3,644,940) |
Gross
profit |
582,559 |
1,843,089 |
2,880,557 |
6,653,413 |
|
|
|
|
|
Profit / (loss) before tax |
(794,176) |
(827,667) |
60,924 |
1,562,228 |
Profit after tax |
(891,637) |
(1,005,680) |
(341,483) |
1,006,182 |
Earnings per ordinary share (basic) |
(0.13c) |
(0.15c) |
(0.05c) |
0.15c |
|
|
|
|
|
Average gold price received |
|
US$1,221 |
|
US$1,216 |
|
|
|
|
|
|
|
|
As at 30 June 2017 |
As at 31 Dec 2016 |
Cash
and cash equivalents |
|
|
3,832,218 |
4,160,923 |
Net
assets |
|
|
61,894,630 |
63,378,973 |
|
|
|
|
|
Cash
Cost and All-In Sustaining Cost ("AISC") |
|
|
|
|
|
|
|
6 months to 30 June 2017 |
6 months to 30 June 2016 |
Gold
production for cash cost and AISC purposes |
|
|
18,009 |
19,667 |
|
|
|
|
|
Total
Cash Cost of production (per ounce) |
|
|
US$819 |
US$763 |
Total AISC of production (per ounce) |
|
|
US$1,072 |
US$945 |
Key Operational Information
|
SUMMARY PRODUCTION STATISTICS FOR THE TWO QUARTERS
TO 30 JUNE 2017 |
|
|
Quarter 1 |
Quarter 2 |
Year
to Date |
Quarter 1 |
Quarter 2 |
Quarter 3 |
Quarter 4 |
Total |
2017 |
2017 |
2017 |
2016 |
2016 |
2016 |
2016 |
2016 |
Horizontal
development - Total |
Metres |
2,251 |
1,855 |
4,106 |
2,925 |
2,941 |
2,649 |
2,694 |
11,209 |
|
|
|
|
|
|
|
|
|
|
Mined ore -
Total |
Tonnes |
36,918 |
42,075 |
78,993 |
37,546 |
33,606 |
43,133 |
44,579 |
158,864 |
|
Gold grade (g/t) |
10.12 |
7.80 |
8.89 |
11.02 |
9.56 |
9.61 |
8.94 |
9.74 |
|
|
|
|
|
|
|
|
|
|
Milled
ore |
Tonnes |
46,663 |
43,905 |
90,568 |
36,615 |
39,402 |
42,464 |
40,485 |
158,966 |
|
Gold grade (g/t) |
7.09 |
6.26 |
6.69 |
8.58 |
8.17 |
8.08 |
7.60 |
8.11 |
Gold
production (1) (2) |
Ounces |
9,861 |
8,148 |
18,009 |
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 the first six months of 2017 include
treatment of 4,042 tonnes of flotation tails.
Financial Highlights
- Cash Cost for the year to date of US$819.
- All-In Sustaining Cost for the year to date of US$1,072.
- Temporary operational issues in Q2 2017, which have now been
fully resolved, restricted production and, in combination with a
strengthening Brazilian Real, impacted financial results for the
first half of the year.
- Gross profit from operations for the first six months of 2017
of US$1.84 million.
- Loss per share of 0.15 cents for the first six months of
2017.
- Cash holdings of US$3.83 million at 30 June 2017.
- The Company has entered into a new US$5 million facility with
Sprott Resource Lending Partnership for a term expiring on 31
December 2019.
- Average gold price of US$1,221 received on gold sales in the
first six months of 2016.
2017 Guidance
- Serabi remains on track to meet forecast gold production for
2017 of approximately 40,000 ounces at an All-In Sustaining Cost of
US$950 to US$975 per ounce.
Operational 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 -50 metre relative level ("mRL"), 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, 56mRL and
with the 40mRL now being developed, 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.
- SRK Ltd hired to commence a new 43-101 Technical Report on the
property, hopefully to be issued early Q4, 2017.
Mike Hodgson, CEO of Serabi commented,
"As I noted in the Company's announcement of its second quarter
production, the Company has achieved mid-year production of over
18,000 ounces of gold and I remain very satisfied with the
production results for the year to date and the prospects for the
rest of the year.
"The operational issues that we encountered and restricted gold
production in April and May, are now fully resolved, and June and
July has seen production levels return to those levels that we
achieved through much of 2016 and during the first quarter of
2017. Furthermore, the month of July was the highest monthly
production for the year to date and I remain confident that we can
recover shortfall over the remainder of the year and will be able
to meet our full year production guidance of 40,000 ounces.
"Nonetheless, in the short term, the production shortfalls
during that six week period have impacted on our financial results
for the second quarter of the year. Whilst at the operating
level the Company has reported a gross profit of approximately
US$580,000 and a gross profit to date of US$1.8 million, revenue is
probably some US$2 million lower than we might have expected had
production in the second quarter mirrored that of the first quarter
of 2017. That being said, if, I as I expect, we recover this
lost production through the second half of the year, we should
recover the lost revenue and cash flow with relatively low increase
in operating cost and therefore see a stronger financial
performance in the second half of the year.
"The results when compared against 2016 have also been adversely
affected by the relative strength of the Brazilian Real. The
average rate for the first six months of 2017 is 14 per cent
stronger than for the same period in 2016 which has the effect of
increasing operating costs when reported in US Dollars. In
fact, when looked at in local currency terms, our operating costs
are in fact tracking slightly lower than in 2016 notwithstanding
that the mined and processed ore tonnages have been higher in the
first six months of 2017 than for the same six months period in
2016.
"Our cash balances remain relatively strong but again the
production shortfalls have not allowed us to build up our cash
balances to the extent that we had hoped although considering
timing differences of sales receipts, particularly in relation to
sales of concentrate, the cash position is approximately US$1
million better than at the start of the year.
"The Company has, at the period end, taken out a new working
capital loan facility with Sprott Resource Lending Partnership of
US$5 million which is for a 30 month period. The new funding
from this was not, however, received until early July so is not
reflected in our cash holdings as at 30 June 2017. This loan
funding will allow the Company to expedite some of its capital
investment programmes that it feels will improve operations and
bring costs efficiencies in the medium term and thus reduce unit
production costs.
"Some of the areas of investment focus on improving the quality
of the mill feed. This includes a reduction in the size of
the underground development drives and continuing the trials on ore
sorting using x-ray technology to further eliminate waste and low
grade ore in the mill feed before it enters the plant.
"Despite our success with narrow vein mining, development still
produces high and unavoidable levels of low grade and waste
material. This not only increases costs but this waste
material consumes vital capacity within the process plant.
Reducing the size of underground development galleries is now more
of a reality with the availability of numerous suppliers
manufacturing smaller units of equipment than were available when
we re-opened Palito in 2013. The idea is to initially
purchase two to three units for trial and, if successful, more to
follow.
"These ore sorting initiatives are very exciting and, I feel,
could bring a paradigm shift to vein mining in the region. We
will seek to reduce as much dilution as we can in the mining
process, but inevitably cannot remove all of it. If ore
sorting can be successfully introduced the ramifications are very
significant, with the potential to reduce feed tonnage and
concurrently increase the grade of the ore delivered to the process
plant."
SERABI GOLD PLCCondensed Consolidated
Statements of Comprehensive Income
|
|
|
|
|
|
|
|
For the three months ended 30 June |
For the six months ended30 June |
|
|
|
|
2017 |
2016 |
2017 |
2016 |
(expressed in US$) |
Notes |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
CONTINUING
OPERATIONS |
|
|
|
|
|
Revenue |
|
10,142,676 |
14,232,086 |
23,316,260 |
25,911,175 |
Cost of sales |
|
(6,849,960) |
(8,923,316) |
(16,642,310) |
(15,612,822) |
Provision for Impairment
of Inventory |
|
- |
- |
(220,000) |
- |
Depreciation of plant and equipment |
|
(2,710,157) |
(2,428,213) |
(4,610,861) |
(3,644,940) |
Gross profit |
|
582,559 |
2,880,557 |
1,843,089 |
6,653,413 |
Administration
expenses |
|
(1,178,903) |
(1,412,120) |
(2,420,358) |
(2,544,320) |
Share based payments |
|
(112,412) |
(25,640) |
(178,032) |
(148,756) |
Gain on disposal of
assets |
|
115,975 |
24,401 |
115,975 |
26,969 |
Operating profit |
|
(592,781) |
1,467,198 |
(639,326) |
3,987,306 |
Foreign exchange loss |
|
(167,236) |
(31,609) |
(120,399) |
(72,408) |
Finance expense |
|
(34,194) |
(1,374,699) |
(68,011) |
(2,352,739) |
Finance income |
|
35 |
34 |
69 |
69 |
(Loss) / profit before
taxation |
|
(794,176) |
60,924 |
(827,667) |
1,562,228 |
Income tax expense |
|
(97,461) |
(402,407) |
(178,013) |
(556,046) |
(Loss) / profit for the period from continuing operations (1)
(2) |
|
(891,637) |
(341,483) |
(1,005,680) |
1,006,182 |
|
|
|
|
|
|
Other
comprehensive income (net of tax)Items that may be
reclassified subsequently to profit or loss |
Exchange differences on translating foreign operations |
|
(2,124,542) |
5,349,439 |
(656,695) |
9,629,568 |
Total comprehensive income/(loss) for the period (2) |
|
(3,016,179) |
5,017,956 |
(1,662,375) |
10,635,750 |
|
|
|
|
|
|
(Loss) / profit per ordinary share (basic) (1) |
3 |
(0.13c) |
(0.05c) |
(0.15c) |
0.15c |
(Loss) / profit per ordinary share (diluted) (1) |
3 |
(0.13c) |
(0.05c) |
(0.15c) |
0.14c |
(1) All revenue and expenses arise from continuing
operations.
SERABI GOLD PLCCondensed Consolidated
Balance Sheets
|
|
|
As at |
As at |
As at |
|
|
|
30
June |
30
June |
31
December |
|
|
|
2017 |
2016 |
2016 |
(expressed in US$) |
|
|
(unaudited) |
(unaudited) |
(audited) |
Non-current
assets |
|
|
|
|
|
Deferred exploration
costs |
|
|
9,868,205 |
9,550,074 |
9,990,789 |
Property, plant and
equipment |
|
|
43,557,012 |
46,927,210 |
45,396,140 |
Deferred taxation |
|
|
3,133,428 |
- |
3,253,630 |
Total non-current assets |
|
|
56,558,645 |
56,477,284 |
58,640,559 |
Current assets |
|
|
|
|
|
Inventories |
|
|
6,844,757 |
9,520,851 |
8,110,373 |
Trade and other
receivables |
|
|
2,865,877 |
7,783,763 |
1,233,049 |
Prepayments and accrued
income |
|
|
5,166,612 |
4,348,014 |
3,696,550 |
Cash and cash equivalents |
|
|
3,832,218 |
4,774,537 |
4,160,923 |
Total current assets |
|
|
18,709,464 |
26,427,165 |
17,200,895 |
Current
liabilities |
|
|
|
|
|
Trade and other
payables |
|
|
5,330,772 |
6,480,142 |
4,722,139 |
Interest bearing loan |
|
|
1,371,489 |
2,516,667 |
1,371,489 |
Convertible loan
facility |
|
|
- |
1,892,624 |
- |
Trade and asset finance
facilities |
|
|
1,338,475 |
7,608,526 |
1,592,568 |
Derivative financial
liabilities |
|
|
650,000 |
1,577,832 |
- |
Accruals |
|
|
512,649 |
443,601 |
635,446 |
Total current liabilities |
|
|
9,203,385 |
20,519,392 |
8,321,642 |
Net current assets |
|
|
9,506,079 |
5,907,773 |
8,879,253 |
Total assets less current liabilities |
|
|
66,064,724 |
62,385,057 |
67,519,812 |
Non-current
liabilities |
|
|
|
|
|
Trade and other
payables |
|
|
2,133,294 |
2,298,786 |
2,211,078 |
Provisions |
|
|
1,824,472 |
2,309,908 |
1,851,963 |
Interest bearing liabilities |
|
|
212,328 |
208,212 |
77,798 |
Total non-current liabilities |
|
|
4,170,094 |
4,816,906 |
4,140,839 |
Net assets |
|
|
61,894,630 |
57,568,151 |
63,378,973 |
Equity |
|
|
|
|
|
Share capital |
|
|
5,540,960 |
5,263,182 |
5,540,960 |
Share premium reserve |
|
|
1,722,222 |
- |
1,722,222 |
Option reserve |
|
|
1,332,578 |
1,136,509 |
1,338,652 |
Other reserves |
|
|
3,404,624 |
361,461 |
3,051,862 |
Translation reserve |
|
|
(31,264,543) |
(29,596,967) |
(30,607,848) |
Retained earnings |
|
|
81,158,789 |
80,403,966 |
82,333,125 |
Equity shareholders' funds |
|
|
61,894,630 |
57,568,151 |
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 will be 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 |
Accumulated |
|
|
capital |
premium |
reserve |
reserves (1) |
reserve |
loss |
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 |
- |
- |
- |
- |
9,629,568 |
- |
9,629,568 |
Profit
for the period |
- |
- |
- |
- |
- |
1,006,182 |
1,006,182 |
Total comprehensive
income for the period |
- |
- |
- |
- |
9,629,568 |
1,006,182 |
10,635,750 |
Warrants lapsed |
- |
- |
- |
(88,801) |
- |
88,801 |
- |
Share options lapsed in
period |
- |
- |
(1,759,662) |
- |
- |
1,759,662 |
- |
Share
option expense |
- |
- |
148,756 |
- |
- |
- |
148,756 |
Equity shareholders'
funds at 30 June 2016 (unaudited) |
5,263,182 |
- |
1,136,509 |
361,461 |
(29,596,967) |
80,403,966 |
57,568,151 |
Foreign currency adjustments |
- |
- |
- |
- |
- |
- |
- |
Loss for
the period |
- |
- |
- |
- |
- |
- |
- |
Total comprehensive
income for the period |
- |
- |
- |
- |
- |
- |
- |
Transfer to taxation
reserve |
- |
- |
- |
2,690,401 |
- |
(2,690,401) |
- |
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
option expense |
- |
- |
- |
- |
- |
- |
- |
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 |
- |
- |
- |
- |
(656,695) |
- |
(656,695) |
Loss for
the period |
- |
- |
- |
- |
- |
(1,005,680) |
(1,005,680) |
Total comprehensive
income for the period |
- |
- |
- |
- |
(656,695) |
(1,005,680) |
(1,662,375) |
Transfer to taxation
reserve |
- |
- |
- |
352,762 |
- |
(352,762) |
- |
Share options lapsed in
period |
- |
- |
(184,106) |
- |
- |
184,106 |
- |
Share
option expense |
- |
- |
178,032 |
- |
- |
- |
178,032 |
Equity
shareholders' funds at 30 June 2017 (unaudited) |
5,540,960 |
1,722,222 |
1,332,578 |
3,404,624 |
(31,264,543) |
81,158,789 |
61,894,630 |
- Other reserves comprise a merger reserve of US$361,461 and a
taxation reserve of US$2,337,639 (31 December 2016: merger reserve
of US$361,461 and a taxation reserve of US$2,690,401)
SERABI GOLD PLCCondensed Consolidated
Cash Flow Statements
|
For the three monthsended30
June |
For the six months ended30
June |
|
2017 |
2016 |
2017 |
2016 |
(expressed in US$) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Operating activities |
|
|
|
|
Operating
(loss)/profit |
(891,637) |
(341,483) |
(1,005,680) |
1,006,182 |
Depreciation - plant, equipment and mining properties |
2,710,157 |
2,428,213 |
4,610,861 |
3,644,940 |
Net
financial expense |
201,395 |
1,406,273 |
188,341 |
2,425,077 |
Provision
for impairment of inventory |
- |
- |
220,000 |
- |
Provision
for Taxation |
97,461 |
402,407 |
178,013 |
556,046 |
Share-based
payments |
112,412 |
25,639 |
178,032 |
148,756 |
Foreign
exchange (loss) / gain |
(84,778) |
(302,227) |
40,560 |
169,676 |
Changes
in working capital |
|
|
|
|
|
(Increase)/decrease in
inventories |
(483,319) |
1,189,635 |
987,364 |
(780,741) |
|
(Increase) in
receivables, prepayments and accrued income |
(333,475) |
(2,073,657) |
(2,577,285) |
(2,764,970) |
|
Increase/(decrease) in payables, accruals and provisions |
894,832 |
(22,698) |
3,589 |
1,479,848 |
Net cash inflow from operations |
2,223,048 |
2,712,102 |
2,823,795 |
5,884,814 |
|
|
|
|
|
Investing activities |
|
|
|
|
Purchase of
property, plant and equipment and projects in construction |
(815,924) |
(1,463,710) |
(1,083,839) |
(2,127,671) |
Mine
development expenditures |
(877,530) |
(729,010) |
(1,964,320) |
(1,249,151) |
Exploration
and other development expenditure |
21 |
- |
(2,500) |
- |
Proceeds
from sale of assets |
115,975 |
24,401 |
115,975 |
26,969 |
Interest received |
35 |
34 |
69 |
69 |
Net cash outflow on investing activities |
(1,577,423) |
(2,168,285) |
(2,934,615) |
(3,349,784) |
|
|
|
|
|
Financing activities |
|
|
|
|
Repayment
of short-term secured loan |
- |
(1,333,333) |
- |
(1,333,333) |
Draw-down
of short-term convertible loan facility |
- |
- |
- |
2,000,000 |
Receipts
from short-term trade finance |
- |
6,750,809 |
- |
11,901,098 |
Repayment
of short-term trade finance |
- |
(5,194,131) |
- |
(11,509,875) |
Payment of
finance lease liabilities |
(132,164) |
(169,793) |
(132,164) |
(381,521) |
Interest
paid and other finance costs |
(55,807) |
(272,937) |
(67,455) |
(498,332) |
Net cash (outflow)/ inflow from financing
activities |
(187,971) |
(219,385) |
(199,619) |
178,037 |
|
|
|
|
|
Net
increase / (decrease) in cash and cash equivalents |
457,654 |
324,432 |
(310,439) |
2,713,068 |
Cash and
cash equivalents at beginning of period |
3,407,117 |
4,410,589 |
4,160,923 |
2,191,759 |
Exchange difference on cash |
(32,553) |
39,516 |
(18,266) |
(130,289) |
Cash and cash equivalents at end of period |
3,832,218 |
4,774,537 |
3,832,218 |
4,774,537 |
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 six month periods ended
30 June 2017. Comparative information has been provided for the
unaudited three and six month periods ended 30 June 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. The secured loan facility was repayable by 31
August 2017 and at 31 June 2017, the amount outstanding under this
facility was US$1.37 million (31 December 2016: US$1.37
million). 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 activities
Impairment 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
plan
If 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 June 2017US$(unaudited) |
3 months ended 30 June 2016US$(unaudited) |
6 months ended 30 June 2017US$(unaudited) |
6 months ended 30 June 2016US$(unaudited) |
(Loss)/profit attributable to ordinary shareholders (US$) |
(891,637) |
(341,483) |
(1,005,680) |
1,006,182 |
Weighted average ordinary
shares in issue |
698,701,772 |
656,389,204 |
698,701,772 |
656,389,204 |
Basic (loss)/profit per share (US cents) |
(0.13) |
(0.05) |
(0.14) |
0.15 |
Diluted ordinary shares
in issue(1) |
698,701,772 |
656,389,204 |
698,701,772 |
706,299,204 |
Diluted
(loss)/profit per share (US cents) |
(0.13)(2) |
(0.05)(2) |
(0.14)(2) |
0.14 |
- Assumes the exercise of 49,910,000 share options that were in
issue but not necessarily vested as at 31 March 2017.
- 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 30 June 2017 the Company entered into a new
secured loan agreement with Sprott Resource Lending Partnership for
US$5.0 million (to include the amount of US$1.37 million
outstanding as at that date), repayable on or before 31 December
2019. Whilst the documentation was signed on 30 June 2017,
the additional funds were not send or received until 5 July 2017
and accordingly no liability for the increased level of the loan
was recognized in these financial statements.Other than as set out
above between the end of the financial period and the date of this
management discussion and analysis, there has been no item,
transaction or event of a material or unusual nature likely, in the
opinion of the Directors of the Group, to affect significantly the
continuing operations of the entity, the results of these
operations, or the state of affairs of the entity in future
financial periods.
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 9000 |
Ross
Allister |
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
month period ended 31 March 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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