TIDMSRB
For immediate release
17 October 2016
Serabi Gold plc
("Serabi" or the "Company")
Third quarter update on gold operations at Palito and Sao Chico
Serabi Gold plc (AIM:SRB, TSX:SBI), the Brazilian focused gold mining
and development company, provides an operational update for the third
quarter of 2016 on its wholly owned Palito and Sao Chico gold operations
in the Tapajos region of Para State, Northern Brazil.
HIGHLIGHTS
-- Record quarterly gold production of 10,233 ounces for the third quarter
of 2016 (Q2 2016 - 9,896 ounces).
-- Increase in the full year production guidance to approximately 39,000
ounces of gold representing a 5 per cent improvement compared with its
previous guidance of 37,000 ounces for the year.
-- Mine production totalled 43,133 tonnes, a 28 per cent increase over the
preceding quarter.
-- 31,916 tonnes at a grade of 9.52 grammes per tonne (g/t) of gold
from Palito.
-- 11,217 tonnes at 9.88 g/t of gold from Sao Chico.
-- 42,464 tonnes of ore processed through the plant for the combined mining
operations.
-- 2,649 metres of horizontal mine development completed in the quarter with
1,607 metres completed at Palito and 1,042 metres at Sao Chico.
-- With the third ball mill operational from the end of the second quarter,
along with a second flotation line and enhancements in the carbon in pulp
("CIP"), work has commenced on the installation of a new carbon
regeneration kiln which should be completed in the early part of the
fourth quarter. The kiln will regenerate 'fouled' carbon and enhance gold
recoveries.
-- These plant enhancements have increased plant capacity from 380-400
tonnes per day (tpd) to over 500 tpd. This additional capacity of
approximately 100 tpd is being used to consume the surface stockpile as
much as practicably possible.
-- Sao Chico has now been deepened to the 86m level, some 150 vertical
metres below surface. The ramp is continuing at a slower rate to the 71m
level.
-- During the third quarter, underground exploration drilling continued at
both sites. At Sao Chico the first 17 holes of a 6,000 metre programme
were completed. The programme is testing the continuity of the central
ore-zone below the current deepest workings at 86m down to level -20m.
-- At the end of the third quarter, the combined surface stockpiles at
Palito and Sao Chico totalled 11,000 tonnes at an average grade of 3.3
g/t of gold.
The following link can be used to access an interview with Mike Hodgson,
CEO discussing the third quarter operational results
https://www.brrmedia.co.uk/broadcasts-embed/57ff4fa94ef34929294b9111/event/?livelink=true&popup=true
Mike Hodgson, CEO, said:
"This has been the Company's best quarter since operations commenced,
with over 10,200 ounces of gold produced. We have already produced more
than 30,000 ounces in the current year and barring any unforeseen
circumstances, remain comfortably on target to exceed our original
production guidance by the year end.
"In the mines we have had a good quarter. At Palito the underground
operation continues to perform well, mined grades for the quarter
averaged over 9.5 g/t of gold. Ore is now being sourced from four
sectors, Senna, Chico da Santa, G3 and Pipocas with Senna in particular
providing some very encouraging results. Whilst this area had been
drilled no underground mining had previously been undertaken but, with
six headings now being advanced there, it has become a significant
contributor to Palito ore production.
"At Sao Chico, ore development and production has continued as planned.
The main ramp has now reached the 86m level and the Main Vein
intersected. Development ore is now being generated on the 156m level
heading east, the 100m level heading west and the new 86m level.
Stoping is focused on the 186 and 156 metre levels.
"In the plant, we are seeing the benefit of the third ball mill. The
introduction of this third mill was primarily to establish much needed
contingency into what was a congested and mill limited operation, and
being a moderately remote operation, was an essential improvement. An
additional short term benefit has been the increased throughput capacity
which is allowing the Company to consume the low grade surface stock
that has built up over the past three years. We now have ore milling
rates in excess of the mining rates and expect to consume most of the
stock by year end.
"As mentioned in the second quarter update, underground exploration
drilling at Sao Chico commenced during the second quarter with the
objective of testing the down dip continuation of the central ore shoot
below the 100mRL down to the level -20mRL. To date, some 2,500 metres
of a 6,000 metre programme have been drilled, with 17 holes completed.
The drilling has intersected the Main Vein in all 17 holes which is
excellent news, and is confirming our belief that the Sao Chico Main
Vein, is a regional shear structure. This news bodes well for the
continuation and strike extension outside the immediate and current mine
limits.
"On that last point I am also pleased to report that we have commenced
mine site exploration programmes at both sites. At Sao Chico we are
investigating the potential strike extensions of the Sao Chico Main Vein
to the east and west. Having recently completed the acquisition of the
surrounding exploration licenses and secured land access we are now able
to undertake this work, the first stage of which involves a ground
geophysics Induced Polarisation ("IP") survey.
"At Palito new exploration activity is also underway. Since 2012
exploration work has been 'parked' whilst efforts were concentrated on
getting the operation underway and performing well. However, during the
last quarter, we have undertaken a programme of 'down the hole'
electromagnetic geophysics, testing some 19 holes drilled into the three
mine site discoveries made in 2012. This technique is an excellent tool
for better targeting sulphide rich zones that are usually gold bearing,
which in turn allow us to better define a follow up drilling programme
that would be undertaken during 2017. Proving up of new discoveries
around our existing operations provides both the opportunity to
replenish resources and extend mine life and the potential to develop
increased mining operations that could increase gold production rates.
"The results of our geophysics are not available as yet, but I look
forward to providing an update shortly."
Results
Total production for the third quarter of 2016 was 10,233 ounces of gold,
generated from the processing of the run of mine ("ROM") ore from the
Palito and Sao Chico Mines, combined with the Palito surface coarse ore
and the stockpiled flotation tailings accumulated from Palito mine
production in 2014.
Gold production for the third quarter came from the processing of 42,464
tonnes of hard rock ROM ore from the Palito and Sao Chico Mines with an
average grade of 8.08 g/t of gold. The total mined ore for the same
period was 43,133 tonnes with an average grade of 9.61 g/t of gold. In
addition to the ROM ore, an additional 2,174 tonnes of flotation
tailings with a grade of 4.1 g/t of gold was processed through the
cyanidation plant.
At 30 September 2016, there were coarse ore stocks of approximately
11,000 tonnes with an average grade of 3.30 g/t of gold, and
approximately 25,000 tonnes of flotation tails with an average grade of
2.5 g/t of gold. The plant expansion completed in this last quarter,
with mill number three now operational, provides sufficient incremental
capacity to process most of this stockpiled material during the
remainder of 2016.
Approximately 1,600 metres of horizontal development has been completed
during the quarter at the Palito Mine, of which 972 metres is
represented by ore development, with the balance being on the
development of ramps, cross cuts and stope preparation.
At the Sao Chico Mine a total of 1,042 metres of horizontal development
was completed, of which 494 metres represents ore development, with much
of the balance being ramp development and cross cuts reflecting the
on-going deepening of the mine. Mine production from Sao Chico was
11,217 tonnes of ore extracted, at a grade of 9.88 g/t of gold, an
increase in tonnage and grade on the previous quarter of 33 per cent and
45 per cent respectively, reflecting an increasing proportion of ore
being generated from stoping as opposed to development.
2016 Guidance
With 29,900 ounces of gold produced during the first three quarters of
2016, the Company feels confident it can positively revise the expected
production for the full year to 39,000 ounces, representing an
improvement of approximately 5 per cent on its previous guidance of
37,000 ounces.
The Company notes that as reported in its operational update for the
second quarter (issued on 18 July 2016), the Brazilian Real has
strengthened significantly against the US Dollar since the beginning of
2016 and since July 2016 has continued to trade between the range of
BrR$3.20 and BrR$3.25 to US$1.00. This 20 per cent strengthening
continues to impact on the Company's reported dollar costs. The
operational costs expressed in Brazilian Reals, have remained consistent
throughout the year.
Nine Nine
Quarter 1 Quarter 2 Quarter 3 months months
2016 2016 2016 2016 2015
Horizontal
development
- Palito Metres 1,900 1,910 1,607 5,417 4,837
Horizontal
development
- Sao
Chico Metres 1,025 1,031 1,042 3,098 2,074
Horizontal
development
- Total Metres 2,925 2,941 2,649 8,515 6,911
Mined ore -
Palito Tonnes 26,752 25,198 31,916 83,866 84,798
Gold grade (g/t) 11.84 10.48 9.52 10.55 10.44
Mined ore -
Sao Chico Tonnes 10,794 8,408 11,217 30,419 17,090
Gold grade (g/t) 9.00 6.81 9.88 8.72 8.22
Mined ore -
Total Tonnes 37,546 33,606 43,133 114,285 101,888
Gold grade (g/t) 11.02 9.56 9.61 10.06 10.07
Milled ore Tonnes 36,615 39,402 42,464 118,481 96,480
Gold grade (g/t) 8.58 8.17 8.08 8.27 8.75
Gold
production
(1) Ounces 9,771 9,896 10,233 29,900(2) 24,704
1. 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.
2. Gold production totals for 2016 include treatment of 13,227 tonnes of
flotation tails.
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 Limited
Nominated Adviser and Financial Adviser
Roland Cornish Tel: +44 (0)20 7628 3396
Michael Cornish Tel: +44 (0)20 7628 3396
Peel Hunt LLP
UK Broker
Matthew Armitt Tel: +44 (0)20 7418 8900
Ross Allister Tel: +44 (0)20 7418 8900
Blytheweigh
Public Relations
Tim Blythe Tel: +44 (0)20 7138 3204
Camilla Horsfall Tel: +44 (0)20 7138 3224
Copies of this announcement are available from the Company's website at
www.serabigold.com.
Neither the Toronto Stock Exchange, nor any other securities regulatory
authority, has approved or disapproved of the contents of this
announcement.
GLOSSARY OF TERMS
The following is a glossary of technical terms:
"Au" means gold.
"assay" in economic geology, means to analyze the proportions of metal
in a rock or overburden sample; to test an ore or mineral for
composition, purity, weight or other properties of commercial interest.
"development" - excavations used to establish access to the mineralised
rock and other workings
"DNPM" is the Departamento Nacional de Produção Mineral.
"grade" is the concentration of mineral within the host rock typically
quoted as grams per tonne (g/t), parts per million (ppm) or parts per
billion (ppb).
"g/t" means grams per tonne.
"granodiorite" is an igneous intrusive rock similar to granite.
"igneous" is a rock that has solidified from molten material or magma.
"Intrusive" is a body of igneous rock that invades older rocks.
"on-lode development" - Development that is undertaken in and following
the direction of the Vein
"mRL" - depth in metres measured relative to a fixed point - in the case
of Palito and Sao Chico this is sea-level. The mine entrance at Palito
is at 250mRL.
"saprolite" is a weathered or decomposed clay-rich rock.
"stoping blocks" - a discrete area of mineralised rock established for
planning and scheduling purposes that will be mined using one of the
various stoping methods.
"vein" is a generic term to describe an occurrence of mineralised rock
within an area of non-mineralised rock.
Qualified Persons Statement
The 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 Statements
Certain 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
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Serabi Gold plc via Globenewswire
http://www.serabigold.com
(END) Dow Jones Newswires
October 17, 2016 02:01 ET (06:01 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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