TIDMSRB
For immediate release
23 July 2020
Serabi Gold plc
("Serabi" or the "Company")
Serabi reports encouraging level of gold production for the second
quarter of 2020.
Serabi Gold plc (AIM: SRB, TSX: SBI), the Brazilian focused gold mining
and development company, is pleased to provide the results and a review
of its second quarter operational and development activities in the
Tapajos region of Para State, Northern Brazil.
A PDF copy of this news release can be accessed using he following link
- https://bit.ly/2ZR7pYM
OPERATIONAL and DEVELOPMENT HIGHLIGHTS
-- Second quarter gold production of 8,504 ounces, resulting in 17,525
ounces for the year to date.
-- 43,519 tonnes of ore mined during the quarter at 5.85 grams per tonne
("g/t") of gold.
-- 44,235 tonnes of run of mine ("ROM") ore were processed through the plant
from the combined Palito and Sao Chico orebodies, with an average grade
of 5.91 g/t of gold.
-- 3,004 metres of horizontal development completed during the quarter, the
highest level of development metres to date.
-- Results reported in the second quarter for a further eight surface holes
and ten underground holes at Sao Chico demonstrate the Main Vein
structure now continues to host gold bearing mineralisation for
approximately 375 metres to the west of the current mine limits, an
extension of a further 75 metres.
Results included:
-- 5.30m @ 12.10g/t Au (Hole: 20-SC-166)
-- 3.40m @ 3.94g/t Au (Hole: 20-SC-164)
-- 1.37m @ 28.77g/t Au (Hole: 20-SCUD-341)
-- 2.72m @ 5.06g/t Au (Hole: 20-SCUD-343)
-- Reverse circulation percussion drilling on the Cicada terrestrial
geophysics anomaly indicates the strong likelihood that the anomaly is a
western extension of the Sao Chico vein structure, approximately 1,000
metres to the west of the current mine limits. Results include:
-- 3m @ 2.09g/t Au (Hole: SCRC-004)
-- 1m @ 1.17g/t Au (Hole: SCRC-007)
-- Regional geochemical sampling has highlighted an area, referred to as
Mata Cobra, which represents an eight kilometre by two kilometre soil
copper anomaly exceeding 100ppm. This anomaly is coincidental with
multiple molybdenum, bismuth, tellurium and arsenic multi-element
anomalies as well as the original airborne electromagnetic ("AEM")
anomalies.
FINANCIAL AND CORPORATE HIGHLIGHTS
-- Cash balance at end of June 2020 of US$9.6 million.
-- Loan from Sprott Resource Lending Partnership ("Sprott"), of which US$7.0
million was outstanding at the start of 2020, fully repaid at end of June
2020.
-- Revised terms for drawdown of convertible loan with Greenstone Resources
II LP ("Greenstone") agreed. US$1.5 million drawn down at end of June
2020.
Mike Hodgson has provided interviews to BRR Media and Crux Investors
where he answers questions on the Company's second quarter results and
activities. These interviews can be accessed using the following links.
BRR Media -
https://www.brrmedia.co.uk/broadcasts-embed/5f171a294c167c121579821e/?popup=true
Crux Investors - https://youtu.be/zidepQVcrwg
Key Operational Information
SUMMARY PRODUCTION STATISTICS FOR 2020 AND FOR 2019
Qtr 1 Qtr 2 YTD Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total
------------ -------
2020 2020 2020 2019 2019 2019 2019 2019
------------ ------- ------ ------ ------ ------ ------ ------ ------ -------
Gold
production
(1) (2) Ounces 9,020 8,504 17,524 10,164 9,527 10,187 10,233 40,101
Mined ore --
Total Tonnes 42,036 43,519 85,555 42,609 44,784 44,757 44,092 176,243
Gold grade (g/t) 6.54 5.85 6.19 7.47 6.72 7.14 6.69 7.00
Milled ore Tonnes 40,465 44,235 84,700 43,451 43,711 45,378 44,794 177,335
Gold grade (g/t) 6.66 5.91 6.27 7.69 6.72 6.84 6.81 7.02
Horizontal
development
-- Total Metres 2,878 3,004 5,882 1,868 2,419 2,433 2,908 9,628
------------ ------- ------ ------ ------ ------ ------ ------ ------ -------
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 2020 include treatment of 18,939 tonnes of
flotation tails at a grade of 3.80 g/t (H1 2019: 10,892 tonnes at a
grade of 4.38 g)
3. The table may not sum due to rounding.
Mike Hodgson, CEO, commented:
"In light of the unique challenges with the pandemic that we have faced
over the past months, I am delighted with the gold production level for
the second quarter of 8,504 ounces, which is beyond my expectation at
the start of the quarter.
"Early in the quarter we took the decision to implement numerous changes
to maintain gold production. Normally the operation, accommodates
approximately 360 people within the mine camp. As a precaution we sent
home personnel not directly involved in gold production, and also older
employees and any individuals with the potential to have underlying
health issues. Any personnel arriving at site for their work rotation
were subject to health screening and CV19 testing before being securely
transported to site. These measures have necessitated a reduction in
the workforce at site to 240 people, liberating space and allowing
accommodation of these remaining employees under improved social
distancing conditions. Achieving the original second quarter production
plan of approximately 10,000 ounces, with only 65% of the workforce
available at site would have been challenging, so to achieve over 8,500
ounces and therefore over 85% of the original plan has been an excellent
achievement.
"The mining operation is not just about achieving daily gold production
targets, so it is equally pleasing to see us achieve over 3,000 metres
of mine development in the quarter being the highest quarterly level of
development to date. In the Palito orebody, production for the quarter
continued to focus on the Mogno and Ipe veins. These are being
developed on several levels and we have been mining some zones of
exceptionally high grade copper and gold, with gold grades of up to
20g/t. At the Sao Chico orebody, the ramp is being extended to -76mRL,
whilst development continues to the west on the upper levels of 186mRL
and 156mRL along the Main Vein.
"During the first quarter of 2020 we reported, on 3 March 2020, some
very exciting exploration results especially for the work being
undertaken around the Sao Chico area. However, to minimise personnel at
site, and especially as exploration is reliant on third-party contactors,
exploration activities were suspended during April. Therefore,
follow-up work has been limited and further results reported in the
second quarter were limited to the remaining drilling that was completed
prior to the suspension but which was nonetheless very successful. The
underground drilling at Sao Chico focused on the shallow portion of the
Main Vein immediately beyond the mine's western limit and returned 1.37m
@ 28.77g/t Au (20-SCUD-341) and 2.72m @ 5.06g/t (20-SCUD-343), both
very encouraging. Surface drilling targeted the deeper portion of the
main vein and its westerly extension, and results again demonstrate good
depth and grade continuity, with intercepts of 5.30m @ 12.10g/t Au
(20-SC-166) and 3.40m @ 3.94g/t Au (20-SC-164). The intercept in drill
hole 20-SC-166 is 300 metres below surface, and immediately down dip of
holes 20-SC-164, 20-SCUD-341 & 20-SCUD-343, with all holes demonstrating
mineable widths and grades. On a long section, an interesting
high-grade zone is clearly evolving.
[Please click on the link below to access Figure 1]
Figure 1 -- Long section of Sao Chico underground development and step
out drilling to the Cicada anomaly -
https://www.globenewswire.com/Tracker?data=aaLMOPps2cuhYK-D9fmfBNpoTSuQGaW2iIziFXouzHTMr-m9uvxwVlEEcrOK-Sts7zCrTDPk0pkMFFj27WNVUSXGL0_X0E_J-aEJSQSiykc=
https://bit.ly/2CtnF9x
"Further west we have new holes 20-SC-167, 169 and 170. These are the
three most westerly holes and all three intersected the Main Vein with
the clearly defined vein/alteration being visible. Whilst the grades
returned from the intersections (hole 20-SC-170 graded 1.00m @ 1.09g/t
Au) are quite low, this is not unusual and most importantly the
intersections demonstrate continuity of a gold bearing structure that is
still going strong in our most western hole, now located 375 metres west
of the current mine workings.
"The full results of this remaining drilling were set out in a news
release issued by Serabi on 11 May 2020.
[Please click on the link below to access Figure 2]
Figure 2 - Plan view of Sao Chico and geophysical anomalies to the west
showing drilling locations -
https://www.globenewswire.com/Tracker?data=aaLMOPps2cuhYK-D9fmfBPc29tM3T1Y9_G5P7GpkaQvjU5cZpi3le7A-hgYiNxuKmt7OR-0EHY_G8KhhsYo-tQwdI2OvzmAlf4tRoJL6Vb0=
https://bit.ly/2E0tmvN
"The Cicada terrestrial geophysics anomaly is located approximately 700
metres further to the west of hole 20-SC-170. We undertook reverse
circulation (RC) drilling over this area targeting the series of high
chargeability anomalies defined in 2018 (news release dated 28 November
2018). We are delighted to report numerous very positive results with a
number of intersections grading gold and the geology indicating strong
zones of alteration and associated sulphides. The best intercept
returned to date has been from drill hole SCRC004, where 3.00m @ 2.09g/t
Au was recovered from a depth of 169 metres including a zone of 1m @
5.42g/t Au. Again, a long section, which shows the location of the RC
programme over Cicada and the step out drilling going west from Sao
Chico, clearly suggests that as we continue to drill in the gap, the two
areas of mineralisation could ultimately connect.
"During the quarter we also saw the results from the geochemistry
programme conducted to the south of Palito, following up on some of the
findings from our 2018 airborne geophysics survey, focussing in
particular, on the very prominent 14 kilometre long, east-west trending,
magnetic anomaly known as the Mata Cobra lineament and the adjacent
NE-SW trending Cinderella shear. Since mid-2019, we have been busy with
a regional geochemical sampling campaign in and around the Mata Cobra
belt, and can now report that the prospectivity of the Mata Cobra
geophysical magnetic anomaly has been strengthened by the identification
of an eight kilometre by two kilometre copper anomaly with analytical
results over 100ppm, coincidental with the geophysical anomaly
identified by the AEM.
[Please click on the link below to access Figure 3]
Figure 3 -- Regional plan showing tenement and contours of soil
anomalies identified by geochemical sampling -
https://www.globenewswire.com/Tracker?data=aaLMOPps2cuhYK-D9fmfBKkCXNTpgiSGe6tHgC-ABSQRi38r-oL4sSNRhvoGf-_3Xfi7Wlm6gYX1qmY8qpijIlsRqjaU4M3bErgXVz9V4UM=
https://bit.ly/3hqnNoP
"Within the contours of this 100ppm copper anomaly, we have identified
some very exciting prospects, these include Calico and Juca, at the west
end of the corridor and approximately five kilometres south of Palito.
Both of these prospects exhibit a very similar geological setting to
Palito and anomalous gold grades in addition to the copper.
"With respect to Coringa, there has been modest progress with the
permitting. The state environmental agency ("SEMAS") have approved all
final amendments to our Licencia Previa (the Preliminary License)
application, and we now await the final stage, the meeting of the State
Environmental Council ("COEMA") to agree and hopefully the award of the
Licencia Previa.
"Having been able to achieve a base level of production and with some
limited improvement in local travel logistics we are now looking at the
measures we need to both continue to control the CV-19 pandemic at site
whilst also being able to resume full mine-site operations in the coming
months. To begin with, we are working hard to significantly expand the
camp to accommodate the full 360 on site workforce under improved social
distancing conditions. Once this is in place, we can bring all
employees currently on vacation or under the Brazilian Government
suspension scheme back to work. Health screening and testing of all
employees will be routine for all returning employees. We will also
extend the work rosters, so that employees will spend more time at site
and with longer breaks at home, reducing the number of journeys and
therefore assisting virus control. With this in mind, we expect that
production levels for the third quarter can be similar to those for the
second quarter with the hope that we can see a return to full production
levels in the fourth quarter.
"During the initial period of the pandemic, we built up stockpiles of
many critical mining and processing consumables and supplies to minimise
short term supply issues that might otherwise have impacted production
"Whilst we have not reached been able to achieve our initial production
forecasts for the first six months of a little in excess of 20,000
ounces, we have benefitted from improved gold prices and a favourable
exchange rate. Strong cash flow during the quarter has allowed us to
repay the remaining balance of the loan from Sprott of approximately
US$3.5 million. We started the quarter with a cash balance of US$9.1
million and notwithstanding this US$3.5 million outflow, finished the
period with cash holdings of US$9.6 million.
"During the quarter we also finalised the arrangements with Greenstone
for their subscription for up to US$12 million of convertible loan
notes. This investment to help finance the outstanding liability of
US$12 million due to Equinox Gold Corp. for the Coringa gold project,
had been placed on hold in mid-March 2020 in light of the uncertainty
caused by the CV-19 pandemic. Revised drawdown terms were agreed in
April 2020 and as at the end of June we have drawn down US$1.5 million
of convertible loan notes to help finance the revised payment schedule
for the completion of the acquisition of Coringa.
"I would like to end by taking the opportunity to thank the flexibility
and professionalism of our Serabi workforce, I said the same at the end
of the first quarter, but I think their efforts during the second
quarter and the superb results achieved, in the circumstances, deserve
to be properly acknowledged."
Production Results
Total production for the second quarter of 2020 was 8,504 ounces of gold,
generated from the processing of 44,235 tonnes of ore at overall average
grades of 5.91 g/t of gold. This processed ore was sourced from hard
rock mined ore from the Palito and Sao Chico orebodies, supplemented by
the processing of 9,763 tonnes of surface stockpiled flotation tailings
grading approximately 3.30 g/t gold. Mined tonnage for the quarter
totalled 43,519 tonnes with a grade of 5.85 g/t of gold. The lower
grades are a result of maintaining development rates but with the
consequence of a reduction in mill feed grade through increased
dilution. For the year to date, 17,525 ounces of gold have been
produced.
On 30 June 2020, there were coarse ore stocks of approximately 5,156
tonnes of ore with an average grade of 3.23 g/t of gold, and a
significant stockpile of flotation tails with an estimated average grade
of 3.00 g/t of gold. These stockpiles continue to be consumed slowly and
used as a 'top-up' to mined ROM to keep the plant full. The stockpile
of flotation tailings is sufficient to continue to process this material
at current rates for the rest of the year.
A total of 3,004 metres of horizontal development has been completed
during the quarter, of which 1,769 metres was ore development. The
balance is the ramp, cross cuts and stope preparation development.
2020 Production Guidance
As discussed above, the impact of CV-19 pandemic has resulted in
production of 17,525 ounces of gold for the first six months of the
year. The company is working hard to expand the camp allowing for a
return to full staffing levels before the end of the third quarter.
With this in mind, we anticipate, third quarter performance being
similar to that of the second quarter, and a return to full levels of
production in the early part of the fourth quarter. Should this be
achieved full year production would be expected to be between 34,000 and
37,000 ounces.
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: mailto:contact@serabigold.com
contact@serabigold.com
--------------------------------------------------
Website: http://www.serabigold.com
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
Ross Allister Tel: +44 (0)20 7418 8900
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:
"Ag" means silver.
------------------ ------------------------------------------------------------
"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.
------------------ ------------------------------------------------------------
"CIM" means the Canadian Institute of Mining, Metallurgy
and Petroleum.
------------------ ------------------------------------------------------------
"chalcopyrite" is a sulphide of copper and iron.
------------------ ------------------------------------------------------------
"Cu" means copper.
------------------ ------------------------------------------------------------
"cut-off grade" the lowest grade of mineralised material that qualifies
as ore in a given deposit; rock of the lowest assay
included in an ore estimate.
------------------ ------------------------------------------------------------
"deposit" is a mineralised body which has been physically delineated
by sufficient drilling, trenching, and/or underground
work, and found to contain a sufficient average grade
of metal or metals to warrant further exploration
and/or development expenditures; such a deposit does
not qualify as a commercially mineable ore body or
as containing ore reserves, until final legal, technical,
and economic factors have been resolved.
------------------ ------------------------------------------------------------
"electromagnetics" is a geophysical technique tool measuring the magnetic
field generated by subjecting the sub-surface to electrical
currents.
------------------ ------------------------------------------------------------
"garimpo" is a local artisanal mining operation
------------------ ------------------------------------------------------------
"garimpeiro" is a local artisanal miner.
------------------ ------------------------------------------------------------
"geochemical" refers to geological information using measurements
derived from chemical analysis.
------------------ ------------------------------------------------------------
"geophysical" refers to geological information using measurements
derived from the use of magnetic and electrical readings.
------------------ ------------------------------------------------------------
"geophysical include the exploration of an area by exploiting differences
techniques" in physical properties of different rock types. Geophysical
methods include seismic, magnetic, gravity, induced
polarisation and other techniques; geophysical surveys
can be undertaken from the ground or from the air.
------------------ ------------------------------------------------------------
"gossan" is an iron-bearing weathered product that overlies
a sulphide deposit.
------------------ ------------------------------------------------------------
"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.
------------------ ------------------------------------------------------------
"hectare" or a is a unit of measurement equal to 10,000 square metres.
"ha"
------------------ ------------------------------------------------------------
"igneous" is a rock that has solidified from molten material
or magma.
------------------ ------------------------------------------------------------
"IP" refers to induced polarisation, a geophysical technique
whereby an electric current is induced into the sub-surface
and the conductivity of the sub-surface is recorded.
------------------ ------------------------------------------------------------
"intrusive" is a body of rock that invades older rocks.
------------------ ------------------------------------------------------------
"mineralisation" the concentration of metals and their chemical compounds
within a body of rock.
------------------ ------------------------------------------------------------
"mineralised" refers to rock which contains minerals e.g. iron,
copper, gold.
------------------ ------------------------------------------------------------
"mt" means million tonnes.
------------------ ------------------------------------------------------------
"ore" means a metal or mineral or a combination of these
of sufficient value as to quality and quantity to
enable it to be mined at a profit.
------------------ ------------------------------------------------------------
"oxides" are near surface bed-rock which has been weathered
and oxidised by long term exposure to the effects
of water and air.
------------------ ------------------------------------------------------------
"ppm" means parts per million.
------------------ ------------------------------------------------------------
"saprolite" is a weathered or decomposed clay-rich rock.
------------------ ------------------------------------------------------------
"sulphide" refers to minerals consisting of a chemical combination
of sulphur with a metal.
------------------ ------------------------------------------------------------
"vein" is a generic term to describe an occurrence of mineralised
rock within an area of non-mineralised rock.
------------------ ------------------------------------------------------------
"VTEM" refers to versa time domain electromagnetic, a particular
variant of time-domain electromagnetic geophysical
survey to prospect for conductive bodies below surface.
------------------ ------------------------------------------------------------
Assay Results
The assay results reported in the table within this release are those
provided by the Company's own on-site laboratory facilities at Palito
and have not been independently verified. Serabi closely monitors the
performance of its own facility against results from independent
laboratory analysis for quality control purpose. As a matter of normal
practice the Company sends duplicate samples derived from a variety of
the Company's activities to accredited laboratory facilities for
independent verification. Based on the results of this work, the
Company's management are satisfied that the Company's own facility shows
good correlation with independent laboratory facilities. The Company
would expect that in the preparation of any future independent
Reserve/Resource statement undertaken in compliance with a recognised
standard, the independent authors of such a statement would not use
Palito assay results but only use assay results reported by an
appropriately certificated laboratory.
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 identi ed 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 re ect 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
Attachment
-- Q2 2020 Operational Update
https://ml-eu.globenewswire.com/Resource/Download/7fb94fda-3d68-4341-a59c-e6fe37c3db61
(END) Dow Jones Newswires
July 23, 2020 02:00 ET (06:00 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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