TIDMSRB
For immediate release
23 January 2017
Serabi Gold plc
("Serabi" or the "Company")
Fourth quarter update on Serabi's gold operations, reporting record
annual production for 2016 and exceeding guidance
Serabi Gold plc (AIM:SRB, TSX:SBI), the Brazilian focused gold mining
and development company, reports record annual production of almost
40,000 ounces of gold, exceeding guidance and provides an operational
update for the fourth quarter of 2016 on its wholly owned Palito and Sao
Chico gold operations in the Tapajos region of Para State, Northern
Brazil.
HIGHLIGHTS
-- Record annual full year production of 39,390 ounces of gold, exceeding
guidance and representing a 19 per cent improvement compared with the
2015 calendar year.
-- New exploration licences at Sao Chico have been acquired immediately to
the east and west of the deposit, offering excellent opportunity to
expand the deposit, with exploration already underway.
-- Gold production of 9,413 ounces for the fourth quarter of 2016 (Q3 2016 -
10,233 ounces).
-- Mine production totalled 44,579 tonnes:
-- 34,611 tonnes at a grade of 7.38 grammes per tonne ("g/t") of gold from
Palito.
-- 9,968 tonnes at a grade of 14.38 g/t of gold from Sao Chico.
-- 40,485 tonnes of ore processed through the plant for the combined mining
operations, at a combined grade of 7.60 g/t of gold.
-- 2,624 metres of horizontal mine development completed in the quarter with
1,928 metres completed at Palito and 696 metres at Sao Chico.
-- During the quarter, the installation of a new carbon regeneration kiln
was completed, this is now effectively regenerating 'fouled' carbon and
early results suggest significant improvement in gold recoveries.
-- At Palito the development of the Senna vein is continuing, the sublevels
are being developed on 250mRL, 237mRL, 225mRL, 210mRL and ramping down to
the 180mRL. At Palito Main Zone, the main ramp has now reached the
-50mRL, where the G3 vein has been intersected and is ready to be
developed.
-- At Sao Chico the main ramp has now been deepened to the 71mRL , some 170
vertical metres below surface.
-- During the fourth quarter, a total of 2,814 metres of underground diamond
drilling was completed across both sites. At Sao Chico, a combination of
exploration and evaluation drilling, totalling 1,267 metres was completed,
mostly drilling the inferred resource blocks below the 86mRL. At Palito,
a total of 1,547 metres of mostly exploration drilling was completed,
principally drilling the inferred resource blocks on the Senna vein below
the 200mRL.
-- At the year end, the combined surface stockpiles at Palito and Sao Chico
totalled 21,000 tonnes of ore with an average grade of 4.0 g/t of gold.
Mike Hodgson, CEO, said:
"We are delighted to have exceeded our production guidance with a total
of 39,390 ounces of gold being produced for the year which also
represents the highest annual gold production from Serabi's operations
in the Tapajos region. The final three months of the year saw another
steady quarter of production of approximately 9,400 ounces of gold, to
compliment the gold production of the previous three quarters and
demonstrating the continued dependable performance of the business.
"The mines have performed well. At Palito the operation continues to
perform steadily, although extracted mine grade during the quarter was
lower than planned as a result of ore being 'cemented' in two stopes.
This ore is not lost, and is being slowly recovered, but not as fast as
we had budgeted. The production shortfall was partially compensated by
more development ore, albeit with a lower gold grade. This resulted in
a Palito head grade for the quarter of 7.4 g/t of gold, compared to 9.5
g/t of gold for the previous quarter. However, the benefit of this ore
development is that the mine is now generating ore from four sectors,
Senna, Chico da Santa, G3 and Pipocas with Senna playing an ever
increasing role in our production plan. Production from stoping has not
commenced there but, in 2017, we will see a significant level of ore
being produced from stoping at Senna.
"At Sao Chico, ore development and production continued in line with our
plans and grades were excellent, returning over 14 g/t for the quarter.
The main ramp has now reached the 70mRL with the Main Vein intersected.
Development continues on the 100mRL, 86mRL and the new 70mRL. Stoping
is focused on the final blocks on the 186mRL, 156mRL and 140mRL.
"As reported last quarter, the plant saw the introduction of the third
mill during Q3. This was primarily acquired to establish much needed
contingency in the plant and to reduce the impact of unforeseen
mechanical problems, essential in a moderately remote operation such as
ours. In October and again in December the importance of this
contingency planning was demonstrated. In both months we suffered
short-term breakdowns, and the ability to maintain throughputs rates by
having a third mill was therefore invaluable. An additional short term
benefit of three mills operating has been the increased throughput
capacity, allowing us to consume the low grade surface stock that had
built up over the past three years.
"Approximately 2,800 metres of diamond drilling was completed across the
Palito and Sao Chico Mines during the quarter. The drilling at both
sites was a combination of exploration and evaluation drill holes. At
Palito, activities were principally focused on drilling the inferred
resource blocks that lie down-dip below the current development levels
in the Senna and Pipocas veins, whilst at Sao Chico, drilling focused
upon the Main Vein below the lowest current development level at the
70mRL down to the -50mRL. At Senna, the results were generally good,
showing strong down-dip continuity in thickness and grade. Whilst this
sector does not share quite the same high grades as seen in the Palito
Main Zone, the structure appears to be geometrically regular, which
benefits mining, and intersected grades are in the 6.0 g/t to 9.0 g/t
range over widths generally in excess of one metre. At Sao Chico, a
total of 1,300 metres of down dip-drilling also gave satisfying results.
In each case the Main Vein was intersected, confirming the strong
structural continuity with a good range of grades being reported.
"The quarter saw surface exploration recommence at Sao Chico. As
reported last quarter, we acquired the exploration license to the west
and south of the Sao Chico Mine last year, and we are very keen to test
the potential continuation of the Sao Chico Main Vein into these areas.
During the quarter, we commenced a surface Induced Polarization ("IP")
programme to the west and south, and although poor weather caused the
work to be suspended it is expected that it will restart during the
second quarter of 2017. The purpose of the programme is to use IP to
trace the trend of the Main Vein, which has sufficient sulphides to
provide a clear conductivity anomaly, which in turn, will be targeted in
a subsequent drill programme.
"Since commencing operations in 2014, Serabi has shown steady, modest
growth, and whilst this past year we have had to face some pretty strong
economic headwinds in terms of gold price and the strengthening of the
Brazilian Real, operationally we have had a terrific year. With both
mines operating well, drilling ongoing and exploration recommencing, I
look forward to providing regular updates in a year where we hope to see
improving margins."
Results
Total production for the fourth quarter of 2016 was 9,413 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 fourth quarter came from the processing of
40,485 tonnes of hard rock ROM ore from the Palito and Sao Chico Mines
with an average grade of 7.60 g/t of gold. The total mined ore for the
same period was 44,579 tonnes with an average grade of 8.95 g/t of gold.
In addition to the ROM ore, a further 3,039 tonnes of flotation tailings
with a grade of 3.82 g/t of gold was processed through the cyanidation
plant.
At 31st December 2016, there were coarse ore stocks of approximately
21,000 tonnes with an average grade of 4.0 g/t of gold, and
approximately 22,000 tonnes of flotation tails with an average grade of
2.5 g/t of gold. Despite the plant expansion to three ball mills during
the third quarter, the easy and rapid ore development of the Senna vein,
particularly due to its proximity to surface, has meant increasing stock
levels during this quarter.
A total of 1,928 metres of horizontal development has been completed
during the quarter at the Palito Mine, of which 1,172 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 696 metres of horizontal development was completed,
of which 266 metres represents ore development, with much of the balance
being ramp development and cross cuts reflecting the on-going deepening
of the mine.
2017 Guidance
With 39,390 ounces of gold produced for 2016, the Company feels
confident it can forecast expected production for 2017 of 40,000 ounces
at an AISC of between $950 and $975 per ounce, which is in line with the
cost guidance of 2016.
The 2017 guidance of 40,000 ounces is an eight per cent improvement on
Serabi's initial guidance for 2016 which was 37,000 ounces. Management
hope that, with the production efficiencies and improvements that can be
implemented in 2017, Serabi will again be able to improve on its
production guidance, as it did in 2016, where the Company exceeded its
initial guidance by 6.5 per cent to produce 39,390 ounces.
Quarter Quarter Quarter Quarter
1 2 3 4 Total Total
2016 2016 2016 2016 2016 2015
Horizontal
development
- Palito Metres 1,900 1,910 1,607 1,928 7,345 6,800
Horizontal
development
- Sao
Chico Metres 1,025 1,031 1,042 696 3,794 2,800
Horizontal
development
- Total Metres 2,925 2,941 2,649 2,694 11,209 9,600
Mined ore -
Palito Tonnes 26,752 25,198 31,916 34,611 118,477 111,751
Gold grade (g/t) 11.84 10.48 9.52 7.38 9.62 10.05
Mined ore -
Sao Chico Tonnes 10,794 8,408 11,217 9,968 40,387 24,096
Gold grade (g/t) 9.00 6.81 9.88 14.38 10.12 8.66
Mined ore -
Total Tonnes 37,546 33,606 43,133 44,579 158,864 135,847
Gold grade (g/t) 11.02 9.56 9.61 8.94 9.74 9.8
Milled ore Tonnes 36,615 39,402 42,464 40,485 158,966 130,299
Gold grade (g/t) 8.58 8.17 8.08 7.60 8.11 8.43
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 16,716 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
January 23, 2017 02:00 ET (07:00 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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