TIDMSRB 
 
 
   For immediate release 
 
   4 August 2020 
 
   Serabi Gold plc 
 
   ("Serabi" or the "Company") 
 
   Serabi extends drawdown period for convertible loan 
 
   Serabi Gold plc (AIM: SRB, TSX: SBI), the Brazilian focused gold mining 
and development company, is pleased to announce that it has agreed with 
Greenstone Resources II LP ("Greenstone") to extend by six months the 
period during which the Company can draw down on the US$12 million 
Convertible Loan Facility ("the Convertible) that was announced on 23 
April 2020 and is being subscribed for by Greenstone. 
 
   Mike Hodgson, CEO, commented: 
 
   "Extending, by six months, the period in which we can draw down on the 
Convertible, will relieve pressure to draw down funds earlier than might 
otherwise be necessary and avoid incurring additional debt under the 
Convertible that may ultimately not be required.  This is excellent news 
for the Company and its shareholders 
 
   "Despite the COVID-19 pandemic, we have continued mining operations at 
the Palito Complex and with the gold prices that we have benefitted from 
during the second quarter of this year, were able to pay down the 
remaining US$3.5 million of the loan with Sprott Resource Lending 
Partnership whilst maintaining our cash position. Despite lower 
production levels, the second quarter was one of our best ever quarters 
from a cash flow perspective.  Greenstone provided Serabi with the 
Convertible as a means to help ensure that the Company was able to 
complete the acquisition of the Coringa gold project.  With the gold 
price looking set to be maintained, the Sprott loan now repaid and 
projected production levels, we currently anticipate that Serabi can 
fund the US$1 million per month instalments that are due to Equinox Gold 
Corp ("Equinox") for Coringa, at least in the near term, from the cash 
flow generated from on-going operations." 
 
   Details of the variation in the terms of the Convertible 
 
   The original period during which the Company could draw down funds under 
the Convertible was due to expire on 31 December 2020 (the "Availability 
Period"), after which time any funds that had not been drawn down under 
the Convertible would no longer be available.  The Company and 
Greenstone have now agreed to extend the Availability Period to 30 June 
2021.  In all other respects the terms of the Convertible are unchanged. 
There was no consideration payable to Greenstone in respect of this 
variation to the terms. 
 
   As at 3 August 2020, the Company had drawn down US$2.0 million of the 
Convertible and made payments of US$2.5 million to Equinox Gold Corp. 
("Equinox") in respect of the  US$12 million payment obligation (the 
"Outstanding Consideration") for the Coringa gold project. After these 
payments, the balance of the  Outstanding Consideration amounts to 
US$9.5 million.  Under the arrangements agreed with Equinox, the Company 
will  continue to make payments of US$1.0 million per month until such 
time as restrictions imposed as a result of the COVID-19 pandemic on 
travel to and within Brazil are lifted at which time any remaining 
balance of the Outstanding Consideration will become due within six 
weeks of that date. 
 
   Related party transaction 
 
   AIM 
 
   As Greenstone is currently interested in more than 10 per cent. of the 
issued ordinary share capital of the Company, the amendment to the 
Availability Period (the "Amendment") is a related party transaction for 
the purposes of Rule 13 of the AIM Rules ("Rule 13").  As Mark Sawyer, a 
non-executive director of the Company, is a nominated Board appointee of 
Greenstone, he is not independent for the purposes of Rule 13. For the 
purposes of the AIM Rules, the independent directors of the Company 
(being the Directors other than Mark Sawyer) consider, having consulted 
with the Company's nominated adviser, Beaumont Cornish, that the 
Amendment is fair and reasonable insofar as Shareholders are concerned. 
 
   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. 
 
   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 
 
 
   -- Convertible Extension 
      https://ml-eu.globenewswire.com/Resource/Download/b895ee77-1913-4635-aef9-74a7b1afd2a8 
 
 
 
 
 
 
 

(END) Dow Jones Newswires

August 04, 2020 02:00 ET (06:00 GMT)

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