TIDMSRB 
 
 
   For immediate release 
 
   13 November 2020 
 
   Serabi Gold plc 
 
   ("Serabi" or the "Company") 
 
   Unaudited Results for the three and nine month periods ended 30 
September 2020 
 
   Serabi (AIM:SRB, TSX:SBI), the Brazilian focused gold mining and 
development company, today releases its unaudited results for the three 
and nine month periods ended 30 September 2020. 
 
   Financial Highlights 
 
 
   -- Cash Cost for the year to date of US$1,013 per ounce. 
 
   -- All-In Sustaining Cost for the year to date of US$1,298 per ounce. 
 
   -- EBITDA for the third quarter of 2020 of US$6.3 million (Q3 2019: US$4.6 
      million) an improvement of 36 per cent. 
 
   -- EBITDA for the year to date ("ytd") of US$15.7 million (2019 ytd: US$12.1 
      million) an improvement of 28 per cent. 
 
   -- Post tax profit for the year to date of US$7.8 million (2019 ytd: US$2.8 
      million) an improvement of 175 per cent. 
 
   -- Earnings per share for the year to date of 13.28 cents. 
 
   -- Average gold price of US$1,707 received on gold sales in 2020. 
 
   -- US$5.5 million now paid to date of the remaining US$12 million 
      consideration for purchase of Coringa, due to Equinox Gold Corp. 
      ("Equinox").  The balance will continue to be paid in monthly instalments, 
      until travel restrictions caused by Coronavirus are lifted.  US$3.5 
      million has been settled from cash flow with a total of US$2.0 million 
      drawn down to date of the US$12 million Convertible Loan Notes (the "Loan 
      Notes") being subscribed for by Greenstone Resources II LP 
      ("Greenstone"). 
 
 
   Key Financial Information 
 
 
 
 
                    9 months to         3 months to         9 months to         3 months to 
                  30 September 2020   30 September 2020   30 September 2019   30 September 2019 
                         US$                 US$                 US$                 US$ 
---------------  ------------------  ------------------  ------------------  ------------------ 
Revenue                  45,403,793          15,941,963          43,939,510          14,353,771 
Cost of sales          (24,908,688)         (8,487,475)        (27,661,873)         (8,496,884) 
                 ------------------  ------------------  ------------------  ------------------ 
Gross operating 
 profit                  20,495,105           7,454,488          16,277,637           5,856,887 
Administration 
 and share 
 based 
 payments               (4,838,661)         (1,168,595)         (4,051,905)         (1,248,405) 
                 ------------------  ------------------  ------------------  ------------------ 
EBITDA                   15,656,444           6,285,893          12,225,732           4,608,482 
Depreciation 
 and 
 amortisation 
 charges                (4,716,809)         (1,484,715)         (6,454,531)         (2,204,030) 
                 ------------------  ------------------  ------------------  ------------------ 
Operating 
 profit / 
 (loss) before 
 finance and 
 tax                     10,939,635           4,801,178           5,771,201           2,404,452 
                 ------------------  ------------------  ------------------  ------------------ 
 
Profit / (loss) 
 after tax                7,828,409           3,671,944           2,849,341           1,129,701 
                 ------------------  ------------------  ------------------  ------------------ 
Earnings per 
ordinary share 
(basic)                      13.28c               6.23c               4.84c               1.92c 
                 ------------------  ------------------  ------------------  ------------------ 
 
Average gold 
price received 
(US$/oz)                   US$1,707            US$1,881            US$1,351            US$1,472 
 
                                                  As at 
                                           30 September               As at               As at 
                                                   2020    31 December 2019    31 December 2018 
                                                    US$                 US$                 US$ 
---------------  ------------------  ------------------  ------------------  ------------------ 
Cash and cash 
 equivalents                                 10,968,059          14,234,612           9,216,048 
Net assets                                   59,209,072          69,733,388          69,110,287 
 
Cash Cost and 
 All-In 
 Sustaining 
 Cost ("AISC") 
--------------- 
                   9 months to 30        9 months to 30        12 months to        12 months to 
                   September 2020        September 2019         31 Dec 2019         31 Dec 2018 
---------------  ------------------  ------------------  ------------------  ------------------ 
Gold production          24,748 ozs          29,878 ozs          40,101 ozs          37,108 ozs 
 for cash cost 
 and AISC 
 purposes 
                 ------------------  ------------------  ------------------  ------------------ 
 
Total Cash Cost            US$1,013              US$844              US$832              US$821 
 of production 
 (per ounce) 
                 ------------------  ------------------  ------------------  ------------------ 
Total AISC of              US$1,298            US$1,078            US$1,081            US$1,093 
 production 
 (per ounce) 
                 ------------------  ------------------  ------------------  ------------------ 
 
 
   Operational Highlights 
 
 
   -- Third quarter gold production of 7,224 ounces, resulting in 24,748 ounces 
      for the year to date. 
 
   -- 44,077 tonnes of ore mined during the quarter at 4.84 grams per tonne 
      ("g/t") of gold. 
 
   -- 46,135 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 4.75 g/t of gold. 
 
   -- 3,037 metres of horizontal development completed during the quarter, the 
      second consecutive quarter when more than 3,000 metres of development has 
      been achieved. 
 
   -- Fourth quarter  production guidance of 8,000 oz, with full year guidance 
      of 33,000 oz. 
 
 
 
 
                                     SUMMARY PRODUCTION STATISTICS FOR 2020 AND FOR 2019 
                       Qtr 1   Qtr 2   Qtr 3     YTD    Qtr 1   Qtr 2   Qtr 3   Qtr 4    Total 
------------  ------- 
                        2020    2020    2020    2020     2019    2019    2019    2019    2019 
------------  -------  ------  ------  ------  -------  ------  ------  ------  ------  ------- 
 
Gold 
 production 
 (1) (2)      Ounces    9,020   8,504   7,224   24,478  10,164   9,527  10,187  10,223   40,101 
Mined ore -- 
 Total        Tonnes   42,036  43,519  44,077  129,632  42,609  44,784  44,757  44,092  176,243 
 Gold grade (g/t)        6.54    5.85    4.84     5.73    7.47    6.72    7.14    6.69     7.00 
Milled ore    Tonnes   40,465  44,235  46,135  130,835  43,451  43,711  45,378  44,794  177,335 
 Gold grade (g/t)        6.66    5.91    4.75     5.73    7.69    6.72    6.84    6.81     7.02 
Horizontal 
 development 
 -- Total     Metres    2,878   3,004   3,037    8,919   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 30,155 tonnes of 
      flotation tails at a grade of 3.50g/t  (Q3 2019: 20,554 tonnes at a grade 
      of 4.13 g/t) 
 
   3. The table may not sum due to rounding. 
 
 
   Exploration and Development Highlights 
 
 
   -- The acquisition of two new highly prospective tenements to complement the 
      Sao Chico exploration potential including highly prospective Sao Domingos 
      exploration tenement, immediately to the west of Sao Chico.  Sao Domingos 
      hosts multiple past and present artisanal working. 
 
   -- Licença Prévia (LP) for the Coringa gold project issued by 
      SEMAS on 8 October 2020. 
 
   -- Regional exploration activities at Calico and Juca prospects resumed 
      during the quarter. 
 
 
   Key Objectives for 2020 
 
 
   -- Continue advancing the licensing process for Coringa along with ongoing 
      engineering studies. 
 
   -- Advance financing package for the Coringa project to fund plant assembly 
      and other site developments. 
 
   -- Continue exploration drilling at Sao Chico with a view to producing a new 
      resource estimation. 
 
   -- Complete exploration discovery drilling programme over the geophysical 
      anomalies to the west and south of Sao Chico. 
 
   -- Maintain payment programme required to complete acquisition of Coringa 
      gold project. 
 
   -- The Company hopes to be able to commence an initial drilling programme at 
      Toucano prior to the end of 2020. 
 
 
   2020 Production Guidance 
 
   The impact of CV-19 pandemic has resulted in production of 24,748 ounces 
of gold for the first nine months of the year.  The third quarter was 
probably the worst period for the pandemic, to date, in Brazil, with 
private operations suspended and listed companies reducing operations 
significantly. However, the Company has managed to keep its mines 
operational and maintain production and cash flow throughout.  By the 
end of September 2020, with almost a full workforce complement back at 
the mine sites, many ancillary activities were resumed.  We anticipate 
fourth quarter production being approximately 8,000 ounces resulting in 
full year production of approximately 33,000 ounces. 
 
   Outlook for 2021 
 
   With a successful surface and underground drilling campaign over the 
next six months to guide a concentrated mine development programme, 
management are confident that production levels can start to be built up 
to the levels that were expected prior to the intervention of COVID-19 
from the beginning of the second quarter of 2021. 
 
   Clive Line, CFO of Serabi has been interviewed by Crux Investors and BRR 
Media.  These interviews can be accessed using the following links 
 
   Crux Investors - 
https://www.globenewswire.com/Tracker?data=H_g2m7Ft8FtxOVEtG53aDjeG4gFGuoBoyqbcfdD3OhQt_i9QUP89mg3jzVHPEJz_dRBQDxnNGhchZM5p5YjicT0JtkzFz5mzRsxuBDZErJFIMNza8avfKAjqU6bY6Jat 
https://youtu.be/HwchInuUwuk 
 
   BRR Media - 
https://www.globenewswire.com/Tracker?data=H_g2m7Ft8FtxOVEtG53aDjBPRzD3MBMEp91CARLr-hZIYwK_WWg8NgOOl1XzAN9_y5HjCRxDDReGQlQVg-KBbdnFpbbmPgxuqbWvjnuEE6iOpAqVLPGSINxI5aqzozGGnf2NiImhNlum-j3Bm6ucbsdcIGUmhI4SeQq83DWqYjM4cnRMY0SALTVkQ-SNG5_oEkVf3SC3BhBIKy2yod20akdspaOsa-7hVb8JlXvO8Ptv8TLW2Tmb6A-ms9m0OhPuICCiaS8tRlf35S_qvzWwtEaYIcnqsK3JidV5zPfaAfY= 
https://www.brrmedia.co.uk/broadcasts-embed/5fabf3ae39bad9268170c31d/?serabi-gold&popup=true 
 
 
   Clive Line, CFO of Serabi commented, 
 
   "Notwithstanding the lower than hoped for production for the third 
quarter, the strong gold price has meant that the results for the third 
quarter of 2020 have shown a slight improvement compared with second 
quarter which itself was one of our best ever quarters. 
 
   "Cash flow generation has again been strong with cash flow from 
operations of US$5.75 million and after accounting for capital 
expenditures, the net operational cash flow of US$3.74 million, slightly 
lower than was reported for the second quarter but reflecting an 
increased level of expenditure on improvements to the mining fleet. 
 
   "Operating profit (before finance costs) of US$4.8 million is at the 
same level as for the preceding quarter and represents a 100 per cent 
improvement compared to the same quarter in 2019.  For the year to date 
the operating profit (before finance costs) of US$10.94 million 
represents a 90 per cent improvement year on year. 
 
   "The financial performance has been assisted by the strong gold price 
and the continued weakness of the Brazilian Real with the average gold 
price for the third quarter of approximately US$1,908.  For the year to 
date the Group has averaged a realised price of US$1,707 for the sales 
completed to the end of September 2020 which compares with the LBMA 
average for the year to the end September 2020 of US$1,735. 
 
   "During the quarter the Company has repaid a further US$2.5 million for 
the outstanding acquisition obligation for the Coringa project and 
subsequent to the quarter end has settled a further US$2.0 million 
leaving a balance, of the principal outstanding, of US$6.5 million. 
Based on the current schedule of monthly repayments this remaining 
obligation should be settled during in the second quarter of 2021.  With 
the cash flow generated, the Company has been able to fund US$2.0 
million of these payments from cash flow drawing down since the start of 
July 2020 only a further US$0.5 million of the US$12 million Convertible 
Loan Note facility (the "Loan Note Facility") that was entered into with 
Greenstone Resources II LP ("Greenstone") in April 2020.  Currently only 
US$2.0 million has been drawn down to date against this facility which 
was initially put in place when gold prices were weaker and the impacts 
of CV-19 difficult to assess, to provide certainty that the Company had 
funding available to it to meet this acquisition obligation.  Management 
will continue to try to pay the on-going instalment payments for Coringa 
from cash flow generated from operations and minimise the requirement to 
make further drawdowns against the Loan Note Facility. 
 
   "The cash cost per ounce and the AISC per ounce for the year to date 
need to be viewed in context.  Gold production for the year to date has 
been quite significantly lower than was originally forecast.  In the 
first quarter this was the result of a breakdown of the largest of the 
three ball mils during February, whilst production levels for the second 
and third quarters have been affected by the need to reduce the 
workforce on site to allow socially distanced working conditions.  As a 
result the on-site workforce over the last two quarters has been 
approximately 65 per cent of the normal staffing complement for much of 
the time those staff who were at site, voluntarily extended their work 
rosters with many spending up to three months at site to maintain the 
mining operations as restrictions on travel and a lack of testing 
capacity at the time rendered team changes very difficult.  Had 
production for the second and third quarters been at the original levels 
expected, this would have potentially translated into a 21 per cent 
improvement in the AISC and Cash Costs. 
 
   "Looking at the operational statistics during the first nine months of 
the 2020, mined tonnage and plant throughput have been at similar levels 
to the same period in 2019 with lower processed grades being the major 
contributor to the reduction in gold production.  The original plan for 
2020 was to increase mining rates compared with 2019, and to use the ore 
sorter to beneficiate the lower grade material and deliver a sorted 
higher grade product to the process plant.  The mine plan was therefore 
deliberately designed to undertake more development (more diluted ore 
given the mining method) as well as more lower grade stopes.  The 
intention was to beneficiate this lower grade material through the ore 
sorter, screen out the majority of the waste and send the resultant 
lower volume of higher grade product to the plant.  The Company has 
continued to follow the original mine plan, but with the reduced 
workforce it has been necessary to simplify the operations, reducing the 
number of faces available at any one time but this has in turn resulted 
in a reduction of total volume and in so doing reducing the overall 
level of optionality for selecting the ore.  As a result, lower grade 
ore that might normally have been stockpiled has been processed whilst 
there was plant capacity available. 
 
   "By the end of September 2020, operations were returning to something 
resembling normality and an aggressive surface and underground drilling 
programme is underway, along with an accelerated underground development 
programme targeted to replenish the reserve and resource base and allow 
the Company to regain the optionality and flexibility that it has 
benefitted from in the past.  This will not be achieved overnight, and 
it will take some time to recover the six months that have been lost. 
With exploration and mine development activity being stepped up together 
with the usual higher labour expense of settlement of the standard 
"13(th) salary" payments that are due in November and December this will 
impact on the level of cash generation for the rest of the year. 
Nonetheless I expect that if our production estimates are attained the 
Company can end in the year in a comfortable financial position." 
 
   This announcement is inside information for the purposes of Article 7 of 
Regulation 596/2014.  The person who arranged the release of this 
statement 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: contact@serabigold.com 
----------------------------- 
Website: www.serabigold.com 
----------------------------- 
 
Beaumont Cornish Limited 
 Nominated 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. 
 
   The following information, comprising, the Income Statement, the Group 
Balance Sheet, Group Statement of Changes in Shareholders' Equity, and 
Group Cash Flow, is extracted from these financial statements. 
 
   Statement of Comprehensive Income 
 
   For the three and nine month periods ended 30 September 2020 
 
 
 
 
                                            For the three months ended       For the nine months ended 
                                                    30 September                    30 September 
                                               2020              2019           2020           2019 
(expressed in US$)             Notes        (unaudited)      (unaudited)     (unaudited)   (unaudited) 
---------------------------  ----------  -----------------  --------------  -------------  ------------ 
CONTINUING OPERATIONS 
Revenue                                         15,941,963      14,353,771     45,403,793    43,939,510 
Cost of sales                                  (8,487,475)     (8,496,884)   (24,908,688)  (28,161,873) 
Release of inventory 
 impairment provision                                   --              --             --       500,000 
Depreciation and 
 amortisation charges                          (1,484,715)     (2,204,030)    (4,716,809)   (6,454,531) 
---------------------------  ----------  -----------------  --------------  -------------  ------------ 
Total cost of sales                            (9,972,190)    (10,700,914)   (29,625,497)  (34,116,404) 
Gross profit                                     5,969,773       3,652,857     15,778,296     9,823,106 
Administration expenses                        (1,042,013)     (1,174,204)    (4,705,158)   (3,973,168) 
Share-based payments                             (182,740)        (65,484)      (344,578)     (196,455) 
Gain on sales of assets 
 disposal                                           56,158         (8,717)        211,075       117,718 
---------------------------  ----------  -----------------  --------------  -------------  ------------ 
Operating profit                                 4,801,178       2,404,452     10,939,635     5,771,201 
Foreign exchange loss                               51,642       (169,113)       (99,032)     (235,216) 
Finance expense                       2          (484,457)       (735,003)    (1,583,318)   (1,871,914) 
Finance income                        2             16,547              --        737,705       175,129 
---------------------------  ----------  -----------------  --------------  -------------  ------------ 
Profit before taxation                           4,384,910       1,500,336      9,994,990     3,839,200 
Income tax expense                    3          (712,966)       (370,635)    (2,166,581)     (989,859) 
---------------------------  ----------  -----------------  --------------  -------------  ------------ 
Profit after taxation                            3,671,944       1,129,701      7,828,409     2,849,341 
---------------------------  ----------  -----------------  --------------  -------------  ------------ 
 
Other comprehensive income 
(net of tax) 
Items that may be reclassified subsequently to profit 
 or loss 
Exchange differences on 
 translating foreign 
 operations                                    (1,259,213)     (5,187,377)   (18,873,162)   (4,695,527) 
---------------------------  ----------  -----------------  --------------  -------------  ------------ 
Total comprehensive profit 
 /(loss) for the period(1)                       2,412,731     (4,057,676)   (11,044,751)   (1,846,186) 
---------------------------  ----------  -----------------  --------------  -------------  ------------ 
 
Profit per ordinary share        4                   6.23c           1.92c         13.28c         4.84c 
 (basic) 
---------------------------  ----------  -----------------  --------------  -------------  ------------ 
Profit per ordinary share        4                   5.80c           1.85c         12.36c         4.67c 
 (diluted) 
---------------------------  ----------  -----------------  --------------  -------------  ------------ 
 
 
   (1)           The Group has no non-controlling interests and all losses 
are attributable to the equity holders of the parent company. 
 
   Balance Sheet as at 30 September 2020 
 
 
 
 
                                     As at         As at         As at 
                                  30 September  30 September  31 December 
                                      2020          2019          2019 
(expressed in US$)                (unaudited)   (unaudited)    (audited) 
------------------------------    ------------  ------------  ------------ 
Non-current assets 
Deferred exploration costs          25,583,666    28,439,970    30,686,652 
Property, plant and equipment       27,788,820    36,704,931    37,597,100 
Right of use assets                  2,207,297     2,102,183     1,997,176 
Taxes receivable                       828,083     1,549,463       848,845 
Deferred taxation                      229,464     1,542,803     1,321,782 
--------------------------------  ------------  ------------  ------------ 
Total non-current assets            56,637,330    70,339,350    72,451,555 
--------------------------------  ------------  ------------  ------------ 
Current assets 
Inventories                          5,308,012     6,610,477     6,577,968 
Trade and other receivables          2,076,263       872,325       802,275 
Prepayments and accrued income       2,329,770     4,390,107     3,473,288 
Cash and cash equivalents           10,968,059    13,440,173    14,234,612 
--------------------------------  ------------  ------------  ------------ 
Total current assets                20,682,104    25,313,082    25,088,143 
--------------------------------  ------------  ------------  ------------ 
Current liabilities 
Trade and other payables             4,573,988     7,158,839     6,113,789 
Acquisition payment outstanding      8,909,397    11,810,372    12,000,000 
Other interest bearing 
 liabilities                         2,060,558     6,949,152     6,952,542 
Derivative financial 
liabilities                            411,123            --            -- 
Accruals                               293,062       344,502       319,670 
                                  ------------  ------------  ------------ 
Total current liabilities           16,248,128    26,262,865    25,386,001 
--------------------------------  ------------  ------------  ------------ 
Net current assets                   4,433,976     (949,783)     (297,858) 
--------------------------------  ------------  ------------  ------------ 
Total assets less current 
 liabilities                        61,071,306    69,389,567    72,153,697 
--------------------------------  ------------  ------------  ------------ 
Non-current liabilities 
Trade and other payables                82,261       564,524       183,043 
Other interest bearing 
liabilities                            181,348            --            -- 
Provisions                           1,598,625     1,364,487     2,237,266 
Total non-current liabilities        1,862,234     1,929,011     2,420,309 
--------------------------------  ------------  ------------  ------------ 
Net assets                          59,209,072    67,460,556    69,733,388 
--------------------------------  ------------  ------------  ------------ 
Equity 
Share capital                        8,905,116     8,882,803     8,882,803 
Share premium reserve               21,905,976    21,752,430    21,752,430 
Option reserve                         984,358     1,171,501     1,019,589 
Other reserves                       9,970,276     6,464,152     7,149,274 
Translation reserve               (63,152,108)  (45,502,650)  (44,278,946) 
Retained surplus                    80,595,454    74,692,320    75,208,238 
--------------------------------  ------------  ------------  ------------ 
Equity shareholders' funds          59,209,072    67,460,556    69,733,388 
--------------------------------  ------------  ------------  ------------ 
 
 
   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 2019 prepared under IFRS as adopted in 
the EU and with IFRS and their interpretations adopted by the 
International Accounting Standards Board have been filed with the 
Registrar of Companies following their adoption by shareholders at the 
2020 Annual General Meeting. The auditor's report on these accounts was 
unqualified.  The auditor's report did not contain a statement under 
Section 498 (2) or 498 (3) of the Companies Act 2006. 
 
   Statements of Changes in Shareholders' Equity 
 
   For the three and nine month periods ended 30 September 2020 
 
 
 
 
(expressed in 
US$) 
                                         Share      Other 
                  Share      Share      option    reserves   Translation    Retained 
(unaudited)      capital     premium    reserve      (1)       reserve      Earnings    Total equity 
--------------  ---------  ----------  ---------  ---------  ------------  -----------  ------------ 
Equity 
 shareholders' 
 funds at 31 
 December 
 2018           8,882,803  21,752,430  1,363,367  4,763,819  (40,807,123)   73,154,991    69,110,287 
--------------  ---------  ----------  ---------  ---------  ------------  -----------  ------------ 
Foreign 
 currency 
 adjustments           --          --         --         --   (4,695,527)           --   (4,695,527) 
Profit for the 
 period                --          --         --         --            --    2,849,341     2,849,341 
--------------  ---------  ----------  ---------  ---------  ------------  -----------  ------------ 
Total 
 comprehensive 
 income for 
 the period            --          --         --         --   (4,695,527)    2,849,341   (1,846,186) 
 Transfer to 
  taxation 
  reserve              --          --         --  1,700,333            --  (1,700,333)            -- 
Share options 
 lapsed in 
 period                --          --  (388,321)         --            --      388,321            -- 
Share option 
 expense               --          --    196,455         --            --           --       196,455 
--------------  ---------  ----------  ---------  ---------  ------------  -----------  ------------ 
Equity 
 shareholders' 
 funds at 30 
 September 
 2019           8,882,803  21,752,430  1,171,501  6,464,152  (45,502,650)   74,692,320    67,460,556 
--------------  ---------  ----------  ---------  ---------  ------------  -----------  ------------ 
Foreign 
 currency 
 adjustments           --          --         --         --     1,223,704           --     1,223,704 
Profit for the 
 period                --          --         --         --            --      983,643       983,643 
--------------  ---------  ----------  ---------  ---------  ------------  -----------  ------------ 
Total 
 comprehensive 
 income for 
 the period            --          --         --         --     1,223,704      983,643     2,207,347 
Transfer to 
 taxation 
 reserve               --          --         --    685,122            --    (685,122)            -- 
Share options 
 lapsed in 
 period                --          --  (217,397)         --            --      217,397            -- 
Share option 
 expense               --          --     65,485         --            --           --        65,485 
--------------  ---------  ----------  ---------  ---------  ------------  -----------  ------------ 
Equity 
 shareholders' 
 funds at 31 
 December 
 2019           8,882,803  21,752,430  1,019,589  7,149,274  (44,278,946)   75,208,238    69,733,388 
--------------  ---------  ----------  ---------  ---------  ------------  -----------  ------------ 
Foreign 
 currency 
 adjustments           --          --         --         --  (18,873,162)           --  (18,873,162) 
Profit for the 
 period                --          --         --         --            --    7,828,409     7,828,409 
--------------  ---------  ----------  ---------  ---------  ------------  -----------  ------------ 
Total 
 comprehensive 
 income for 
 the period            --          --         --         --  (18,873,162)    7,828,409  (11,044,753) 
Shares issued 
 in the 
 period            22,313     153,546         --         --            --           --       175,859 
Transfer to 
 taxation 
 reserve               --          --         --  2,821,002            --  (2,821,002)            -- 
Share options 
 exercised in 
 period                --          --   (31,752)         --            --       31,752            -- 
Share options 
 lapsed in 
 period                --          --  (348,057)         --            --      348,057            -- 
Share option 
 expense               --          --    344,578         --            --           --       344,578 
--------------  ---------  ----------  ---------  ---------  ------------  -----------  ------------ 
Equity 
 shareholders' 
 funds at 30 
 September 
 2020           8,905,116  21,905,976    984,358  9,970,276  (63,152,108)   80,595,454    59,209,072 
--------------  ---------  ----------  ---------  ---------  ------------  -----------  ------------ 
 
 
   (1)            Other reserves comprise a merger reserve of US$361,461 
and a taxation reserve of US$9,608,815 (31 December 2019: merger reserve 
of US$361,461 and a taxation reserve of US$6,787,813). 
 
   Cash Flow Statement 
 
   For the three and nine month periods ended 30 September 2020 
 
 
 
 
                                                          For the three months      For the nine months 
                                                                  ended                     ended 
                                                              30 September              30 September 
                                                           2020         2019         2020         2019 
(expressed in US$)                                      (unaudited)  (unaudited)  (unaudited)  (unaudited) 
------------------------------------------------------  -----------  -----------  -----------  ----------- 
Operating activities 
Post tax (loss) / profit for period                       3,671,944    1,129,701    7,828,409    2,849,341 
Depreciation -- plant, equipment and mining properties    1,484,715    2,204,030    4,716,809    6,454,531 
Net financial expense                                       416,268      904,116      944,645    1,932,001 
Provision for impairment of inventory                            --           --           --    (500,000) 
Provision for taxation                                      712,966      370,635    2,166,581      989,859 
Share-based payments                                        182,740       65,484      399,284      196,455 
Foreign exchange (loss) / gain                             (79,732)       22,685    (125,537)    (360,116) 
Changes in working capital 
 (Increase)/decrease in inventories                          55,650    (193,156)    (733,883)    1,972,184 
 (Increase) in receivables, prepayments and accrued 
  income                                                  (997,396)      119,905  (1,997,572)    (993,117) 
 Increase/(decrease) in payables, accruals and 
  provisions                                                277,539      461,603      220,307    1,979,991 
 -----------------------------------------------------  -----------  -----------  -----------  ----------- 
Net cash inflow from operations                           5,724,694    5,085,003   13,419,043   14,521,129 
------------------------------------------------------  -----------  -----------  -----------  ----------- 
 
Investing activities 
 
Purchase of property, plant and equipment and assets 
 in construction                                          (860,020)  (1,138,120)  (2,049,973)  (2,599,412) 
Mine development expenditure                              (784,203)  (1,342,675)  (2,005,880)  (2,835,238) 
Geological exploration expenditure                        (267,338)    (290,503)  (1,352,610)  (1,087,027) 
Pre-operational project costs                             (149,457)    (433,526)    (627,097)  (1,277,048) 
Acquisition of mining project                           (2,500,000)           --  (3,500,000)           -- 
Acquisition of other property rights                      (150,789)    (196,037)    (483,302)  (1,352,112) 
Proceeds from sale of assets                                 72,188       16,741      400,047      169,822 
Interest received                                                --           --          911        2,217 
------------------------------------------------------  -----------  -----------  -----------  ----------- 
Net cash outflow on investing activities                (4,639,619)  (3,384,120)  (9,617,904)  (8,978,798) 
------------------------------------------------------  -----------  -----------  -----------  ----------- 
 
Financing activities 
Drawdown of convertible loan                                500,000           --    2,000,000           -- 
Repayment of secured loan                                        --           --  (6,983,492)           -- 
Payment of finance lease liabilities                      (203,080)    (125,804)    (249,354)    (588,025) 
Interest paid and other finance costs                       (2,753)    (117,308)    (265,751)    (421,241) 
                                                        -----------  -----------  -----------  ----------- 
Net cash (outflow) / inflow from financing activities       294,167    (243,112)  (5,498,597)  (1,009,266) 
------------------------------------------------------  -----------  -----------  -----------  ----------- 
 
Net increase / (decrease) in cash and cash equivalents    1,379,242    1,457,771  (1,697,458)    4,533,065 
Cash and cash equivalents at beginning of period          9,627,412   12,366,683   14,234,612    9,216,048 
Exchange difference on cash                                (38,596)    (384,281)  (1,569,095)    (308,940) 
------------------------------------------------------  -----------  -----------  -----------  ----------- 
Cash and cash equivalents at end of period               10,968,059   13,440,173   10,968,059   13,440,173 
------------------------------------------------------  -----------  -----------  -----------  ----------- 
 
 
 
 
   Notes 
 
   1.             Basis of Preparation 
 
   These interim condensed consolidated financial statements are for the 
three and nine month periods ended 30 September 2020. Comparative 
information has been provided for the unaudited three and nine month 
periods ended 30 September 2019 and, where applicable, the audited 
twelve month period from 1 January 2019 to 31 December 2019. 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 2019 
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 2019 and those envisaged for the financial statements for the 
year ending 31 December 2020. 
 
   . 
 
   Accounting standards, amendments and interpretations effective in 2020 
 
   The Group has not adopted any standards or interpretations in advance of 
the required implementation dates. 
 
   The following Accounting standard has come into effect as of 1 January 
2020 have been 
 
   IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors 
(Amendment -- Definition of Material) 
 
   The adoption of this standard has had no effect on the financial results 
of the Group. 
 
   There are a number of standards, amendments to standards, and 
interpretations which have been issued that are effective in future 
periods and which the Group has chosen not to adopt early.  None of 
these are expected to have a significant effect on the Group, in 
particular 
 
   IAS 1 Presentation of Financial Statements 
 
   IFRS 3 Business Combinations (Amendment -- Definition of a Business) 
 
   These financial statements do not constitute statutory accounts as 
defined in Section 434 of the Companies Act 2006 
 
   Going concern and availability of finance 
 
   As at 30 September 2020 the Group had cash in hand of US$10.97 million 
and net assets of US$59.21 million. 
 
   The occurrence of the Coronavirus (COVID-19) pandemic has created 
significant uncertainty for all business sectors including Serabi. 
Whilst unable to operate at expected production levels during the second 
and third quarters of 2020, the Group has nonetheless maintained its 
gold mining operations without interruption.  The levels of workforce at 
site were reduced as a pre-cautionary measure to improve social 
distancing whilst additional accommodation and other facilities could be 
put in place prior to a return to full workforce numbers.  Whilst 
production levels during the second and third quarters of 2020 have been 
below the levels that the Group had originally forecast, the weakness of 
the Brazilian Real and the increased gold price that prevailed during 
the same period, resulted in strong cash flow being generated by the 
Group.  In addition to paying off a US$6.9 million secured loan during 
2020, the Group has also made payments totalling US$5.5 million (as at 
12 November 2020) to Equinox Gold Inc. ("Equinox") for the outstanding 
sum due for the acquisition of the Coringa project. 
 
   At the current time the Directors have assumed that mining operations 
and gold production will continue at the Palito Complex at similar 
levels of production for the fourth quarter and expect that, with a 
return to a full workforce during the fourth quarter and the 
reintroduction of surface and underground drilling crews for mine 
planning purposes that production can be expected to improve during the 
early part of 2021.  There is no evidence, at this time, to suggest that 
the authorities in Brazil have any intention to try and close down or 
suspend mining activities as a result of the current Coronavirus 
pandemic.  On 20 March 2020, it was stipulated in Decree 10,282/20 that 
mineral activity was considered an essential business sector and further 
actions have subsequently been invoked to prevent any restrictive 
measures being applied to the supplies required by the mining industry 
including transportation of supplies, availability of materials required 
for processing, and the sale and transportation of the mineral products. 
 
   The Group has renegotiated the terms relating to the settlement of a 
final acquisition payment of US$12 million due to Equinox in respect of 
the purchase of Chapleau Resources Limited and its Coringa gold project 
(the "Coringa Deferred Consideration"). Under the revised arrangement 
the Group began paying monthly instalments commencing 1 May 2020 of 
US$500,000 per month, increasing to US$1 million per month from 1 August 
2020 and payable thereafter ("the "Deferral Period") until such time as 
certain conditions relating to travel into and within Brazil are lifted 
(the "Travel Restriction Conditions").  Within 6 weeks of the 
satisfaction of the Travel Restriction Conditions the remaining portion 
of the Coringa Deferred Consideration will become payable. 
 
   The Company announced on 22 January 2020 that it had entered into an 
agreement with Greenstone Resources II LP ("Greenstone") for the issue 
of and subscription by Greenstone of US$12 million of Convertible Loan 
Notes the proceeds of which would be used to satisfy the Coringa 
Deferred Consideration.  However, due to the uncertainties created by 
the impact of the Coronavirus, the Company and Greenstone agreed to 
extend the period for the satisfaction of the conditions required for 
completion of the subscription by Greenstone. On 24 April 2020 the 
Company announced that it had agreed certain amendments to the original 
agreement with Greenstone (the "Amended Subscription Deed"). 
 
   Under the Amended Subscription Deed and a further subsequent amendment 
agreed with Greenstone 
 
   (a)           the Company may, prior to the satisfaction of the Travel 
Restriction Condition only submit a subscription request in respect of 
Convertible Loan Notes in the amount of US$500,000 each month. Following 
the satisfaction of the Travel Restriction Condition, the Company may 
then issue further subscription request for amounts of not less than 
US$100,000 and not exceeding an amount equal to US$12,000,000 less the 
sum of the aggregate principal amount of all Notes outstanding at that 
time. 
 
   (b)           the Convertible Loan Notes were initially unsecured and 
subordinated to the Sprott Loan.  Following the completion of the 
repayment of the Sprott Loan on 30 June 2020, the security interests of 
Sprott have been discharged and the Company has granted to Greenstone 
the security package as originally envisaged save that a pledge of the 
shares of Chapleau Resources Limited ("CRL") will continue to be held by 
Equinox until such time as the Coringa Deferred Consideration is settled 
in full. CRL holds 100% of the shares of Chapleau Exploração 
Mineral Ltda which in turn holds the exploration licences for the 
Coringa gold project 
 
   (d)           The period during which the Company may issue an Issue 
Notice to Greenstone expires on 30 September 2021 
 
   (e)           Subject to Greenstone not having exercised its option to 
convert the amount outstanding into Conversion Shares, the Convertible 
Loan Notes are due to be repaid 16 months after the first Issue Date 
which was 30 April 2020. 
 
   The Balance Sheet of the Group shows a net current asset position of 
US$4.43 million at 30 September 2020 including the fair value of a cash 
liability (including accrued interest) of US$8.9 million in respect of 
Coringa Deferred Consideration of which a further US$2.0 million has 
been settled subsequent to the period end.  The Group plans to try to 
continue to finance this liability as much as possible from its 
operational cash flow but can also obtain additional working capital 
through the issue of the balance of the US$12 million of Convertible 
Loan Notes to Greenstone which will not be repayable until 31 August 
2021. As at the current date, US$2.0 million has been drawn down against 
the Convertible Loan Notes and US$6.5 million remains outstanding in 
respect of the Coringa Deferred Consideration. 
 
   Whilst the Directors consider that the assumptions they have used are 
reasonable and based on the information currently available to them, 
there remains significant uncertainty regarding further actions that 
have not been anticipated but which may be required or imposed and may 
impact on the ability of the Group to meet the operational plan and cash 
flow forecast. 
 
   Whilst recognising all the above uncertainties, the Directors have 
prepared the financial statements on a going concern basis.  In the 
event that additional short term funding is required, the Directors 
believe there is a reasonable prospect of the Group securing further 
funds as and when required in order that the Group can meet all 
liabilities including the Coringa Deferred Consideration as and when 
they fall due in the next 12 months.  The Directors have been successful 
in raising funding as and when required in the past and consider that 
the Group continues to have strong support from its major shareholders 
who been supportive of and provided additional funding when required on 
previous occasions. 
 
   As at the date of this report both the medium and long term impact of 
COVID-19 on the underlying operations, and the outcome of raising any 
further funds that may be required, remains uncertain and this 
represents a material uncertainty surrounding going concern.  If the 
Group fails to achieve the operational plan or to raise any additional 
necessary funds, the Group may be unable to realise its assets and 
discharge its liabilities in the normal course of business. The matters 
explained indicate that a material uncertainty exists that may cast 
significant doubt on the Group and Company's ability to continue as a 
going concern. These financial statements do not show the adjustments to 
the assets and liabilities of the Group or the Company if this was to 
occur 
 
   2.             Finance expense and income 
 
 
 
 
                                                          3 months ended      3 months ended      9 months ended 
                                                         30 September 2020   30 September 2019   30 September 2020          9 months ended 
                                                            (unaudited)         (unaudited)         (unaudited)      30 September 2019 (unaudited) 
                                                               US$                 US$                 US$                       US$ 
Interest expense on secured loan                                        --           (173,637)           (203,127)                       (474,177) 
Interest expense on convertible loan                              (33,899)                  --            (72,806)                              -- 
Interest expense on mineral property acquisition 
 liability                                                       (239,071)                  --           (823,361)                              -- 
Unwinding of discount on mineral property acquisition 
 liability                                                                           (280,344)                  --                       (812,615) 
Expense in respect of non-substantial modification               (155,237)            (39,900)           (390,274)                        (53,212) 
Amortisation of arrangement fee for convertible loan              (56,250)                  --            (93,750)                              -- 
Loss on revaluation of derivatives                                      --           (241,122)                  --                       (531,910) 
                                                                 (484,457)           (735,003)         (1,583,318)                     (1,871,914) 
Gain in respect of non-substantial modification                         --                  --             724,438                         172,912 
Gain on revaluation of derivatives                                  16,547                  --              12,356                              -- 
Interest income                                                         --                  --                 911                           2,217 
                                                        ------------------  ------------------  ------------------  ------------------------------ 
Net finance expense                                              (467,910)           (735,003)           (845,613)                     (1,696,785) 
                                                        ------------------  ------------------  ------------------  ------------------------------ 
 
 
   3.             Taxation 
 
   The Group has recognised a deferred tax asset to the extent that the 
Group has reasonable certainty as to the level and timing of future 
profits that might be generated and against which the asset may be 
recovered.  The Group has released the amount of US$794,044 as a 
deferred tax charge during the nine month period to 30 September 2020. 
 
   The Group has also incurred a tax charge in Brazil for the nine month 
period of US$1,372,535. 
 
   4.             Earnings per Share 
 
 
 
 
                    3 months ended      3 months ended      9 months ended      9 months ended 
                   30 September 2020   30 September 2019   30 September 2020   30 September 2019 
                      (unaudited)         (unaudited)         (unaudited)         (unaudited) 
----------------  ------------------  ------------------  ------------------  ------------------ 
Profit 
 attributable to 
 ordinary 
 shareholders 
 (US$)                     3,671,944           1,129,701           7,828,409           2,849,341 
----------------  ------------------  ------------------  ------------------  ------------------ 
Weighted average 
 ordinary shares 
 in issue                 58,981,290          58,909,551          58,946,229          58,909,551 
Basic profit per 
share (US 
cents)                         6.23c               1.92c              13.28c               4.84c 
----------------  ------------------  ------------------  ------------------  ------------------ 
Diluted ordinary 
 shares in issue 
 (1)                      63,362,694          60,997,145          63,327,628          60,997,145 
Diluted profit                 5.80c               1.85c              12.36c               4.67c 
 per share (US 
 cents) 
----------------  ------------------  ------------------  ------------------  ------------------ 
 
 
   (1) Based on 2,345,088 options vested and exercisable as at 30 September 
2020 and 2,036,316 shares that could be issued pursuant to any exercise 
of conversion rights attaching to the Convertible Loan Notes as at 30 
September 2020 (30 September 2019: 2,087,594 options) 
 
   4.             Post balance sheet events 
 
   Subsequent to the end of the quarter, there has been no item, 
transaction or event of a material or unusual nature likely, in the 
opinion of the Directors of the Company to affect significantly the 
continuing operation of the entity, the results of these operations, or 
the state of affairs of the entity in future financial periods. 
 
   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. 
 
   Assay Results 
 
   The assay results reported within this release include those provided by 
the Company's own on-site laboratory facilities at Palito which may not 
have 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. 
 
   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 
 
 
   -- Q3 2020 Financial Report 
      https://ml-eu.globenewswire.com/Resource/Download/37586146-062a-48a8-88ac-d768198b9220 
 
 
 
 
 
 
 

(END) Dow Jones Newswires

November 13, 2020 02:00 ET (07:00 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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