TIDMSRB
For immediate release
14 January 2021
Serabi Gold plc
("Serabi" or the "Company")
Serabi delivers improving gold production for the fourth 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 fourth quarter operational and development activities in the
Tapajos region of Para State, Northern Brazil.
A PDF Version of this release including all images can be accessed using
the following link -
https://www.globenewswire.com/Tracker?data=IOhhTv5cX3ameX_T_AnbEAerciPUWOFrph1jdJWBhJCqThrjtx3zw5hg5bvJmNlGGT2Wr5pYvv8bPKn8qG9VMIGA7GpZMM7SerOnYda40Fo=
https://bit.ly/38GD9Em
OPERATIONAL and DEVELOPMENT HIGHLIGHTS
-- Fourth quarter gold production of 7,254 ounces, a small improvement on
the third quarter and resulting in an annual total of 32,003 ounces.
-- Production for December 2020 exceeded 3,000 ounces, the best monthly
result since the end of April 2020.
-- Total ore mined during the quarter of 46,275 tonnes at 5.24 grams per
tonne ("g/t") of gold.
-- 43,440 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 5.27 g/t of gold, an improvement of 9% compared with Q3.
-- 3,353 metres of horizontal development completed during the quarter, the
highest since operations commenced, and a 10% increase on the previous
quarter. Over 12,200 metres were developed during the year.
-- Mine site and regional exploration activities resumed in the fourth
quarter. A 32,000 metres drill programme is planned for 2021 with
activity underway at the recently acquired Sao Domingos exploration
tenement, immediately to the west of Sao Chico as well as Palito.
-- Geophysical surveys commenced and remain ongoing at the Company's Calico
prospect.
-- The much-anticipated award of the Licença Prévia (LP) for the
Company's Coringa Gold project, was issued by the state environmental
agency ("SEMAS") on 8 October 2020
FINANCIAL AND CORPORATE HIGHLIGHTS
-- Cash totalled US$8.1 million at the end of December 2020 (including the
initial outstanding proceeds from a December gold sale of US$1.5
million).
-- US$3.0 million paid in the quarter to Equinox Gold Corp ("Equinox") under
the staged payment plan for the Coringa gold project. Further US$1.0
million paid on 1 January 2021 following which US$4.5 million remains
outstanding. Which is planned to have been settled in full during the
second quarter of 2021.
-- No funds drawn down in the quarter from the convertible loan arrangements
with Greenstone Resources II LP ("Greenstone") and a total of only US$2.0
million had been drawn down at the end of December 2020.
2021 PRODUCTION GUIDANCE
-- With the need to re-establish optionality in the operations by opening up
additional mine faces during the early part of 2021, the Company
anticipates that production for 2021 from the current Palito Complex
operations will be between 33,000 and 36,000 ounces with production in
2022 then increasing to approximately 45,000 ounces.
Mike Hodgson has provided interviews to BRR Media and Crux
BRR Media
-https://www.brrmedia.co.uk/broadcasts-embed/600065a659cf24171a328438/copied-from-5ee24bc35e278421d06982fe/?popup=true
Crux Investors - https://youtu.be/jtItFjCUNL4
Key Operational Information
SUMMARY PRODUCTION STATISTICS FOR 2020 AND FOR 2019
Qtr 1 Qtr 2 Qtr 3 Qtr 4 YTD Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total
------------ -------
2020 2020 2020 2020 2020 2019 2019 2019 2019 2019
------------ ------- ------ ------ ------ ------ ------- ------ ------ ------ ------ -------
Gold
production
(1) (2) Ounces 9,020 8,504 7,224 7,254 32,003 10,164 9,527 10,187 10,233 40,101
Mined ore --
Total Tonnes 42,036 43,519 44,097 46,275 175,928 42,609 44,784 44,757 44,092 176,243
Gold grade (g/t) 6.54 5.85 4.84 5.24 5.59 7.47 6.72 7.14 6.69 7.00
Milled ore Tonnes 40,465 44,235 46,135 43,440 174,276 43,451 43,711 45,378 44,794 177,335
Gold grade (g/t) 6.66 5.91 4.75 5.27 5.62 7.69 6.72 6.84 6.81 7.02
Horizontal
development
-- Total Metres 2,878 3,004 3,037 3,353 12,272 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 39,207 tonnes of
flotation tails at a grade of 3.21g/t (2019: 29,976 tonnes @ 4.52g/t).
3. The table may not sum due to rounding.
Mike Hodgson, CEO, commented:
"It goes without saying that 2020 has presented unique challenges, so in
that context producing 7,254 ounces in the final quarter to bring annual
gold production for the year to over 32,000 ounces was a success.
Importantly with over 3,000 ounces being generated in December alone,
our best month's production since April, I think we can see the benefits
of a return to normality and can look forward to 2021 with great
optimism. Whilst we did forecast higher gold production for 2020,
pre-pandemic, I believe all things considered, the overall result given
the challenges faced has been an excellent outcome. The gold not
produced during 2020, has not been lost. It still remains in the ground
and will therefore be produced in the future and with the continued
strength of the gold price may generate better revenues.
"As I reported last quarter, South America saw the first wave of the
pandemic peaking in the third quarter and into the fourth quarter with
several mining operations across the continent facing significant
challenges. I believe a combination of our location, locking down the
camps and initiating mass testing early in the pandemic really helped us
maintain operations, whilst minimising the health risk to our staff.
Our preventative actions have been critical and has allowed us to
restore the on-site personnel numbers to pre-pandemic levels during the
fourth quarter. Furthermore, I am pleased to say we have been
COVID-free since September.
"During the second and third quarters mining activities had to be
reduced in order to lower the numbers of personnel at site, this
resulted in lower mine output, which barely met plant capacity and
surface stockpiles were consequently rundown. This reduction in mine
output unfortunately diminished the benefit we had planned from our ore
sorter. Nevertheless, when put to use, the performance of the ore
sorter has been remarkable. Over the year, it has processed over 23,000
tonnes of feed at an average grade of 2.03 g/t Au. The sorter discarded
approximately 20,600 tonnes of low-grade material (0.6g/t of gold)
leaving a high-grade product of 2,818 tonnes at 12 g/t of gold. The
discarded 20,600 tonnes would have previously been processed through the
plant, consuming precious plant capacity. With a post crushing plant
process cost of approximately $35/tonne, and excluding tailings process
costs, it is clear the sorter has already made a significant
contribution to its initial cost, albeit with its restricted use. With
development rates climbing and a ramp up in mining activity during the
first half of 2021, we hope to see the real benefits from the ore-sorter
during the second half of 2021 that had originally been expected in
2020.
"As mentioned, mining rates have improved during this final quarter and
over the coming months this will improve optionality and with that, a
continued improvement in production grades. The Ipe, Mogno and Pipocas
veins continued to contribute the majority of the production tonnage
from the Palito orebody. In the Sao Chico orebody, levels -48mRL and
-63mRL, the deepest levels were worked, with increased levels of mining
from the Julia vein on levels 116mRL and 130mRL. The increase in mining
activity has also resulted in a very welcome improvement in development
rates. The fourth quarter saw the highest horizontal development rates
since operations commenced and was the third consecutive quarter where
rates exceeded 3,000 metres per month. These improved development rates
have come about with improved fleet availability and utilisation, but
principally the introduction of a third underground shift.
"The fourth quarter has also seen the welcome return of exploration
activities, with work focusing in three locations namely, the Palito and
Sao Chico mine sites, and the newly acquired Sao Domingos prospect with
three rigs arriving late in the quarter.
"The first rig was deployed to Sao Chico to pick up the drilling of the
'Western' extension of the Sao Chico orebody and the initial results to
date have been very encouraging.
Use the link below to access Figure 1 - Plan view of Sao Chico and
geophysical anomalies to the west showing selected drilling results --
https://www.globenewswire.com/Tracker?data=IOhhTv5cX3ameX_T_AnbEEPNMsYFopYENMd17lPMzZqOAMkkUE9ILuN1-wjWv5DqXZjW6GpyW8ptI5ljoWWsZYUzmTiibO1mr8HnX4Vbnww=
https://bit.ly/2XElKFV
"The second rig has been deployed at the newly acquired Sao
Domingos/Fofoca exploration tenement, which lies immediately to the west
of Sao Chico. The Sao Domingo tenement is rich in multiple artisanal
workings, past and present and where some exceptionally high-grade ore
has been mined. Our initial exploration activities are centred upon some
of these artisanal workings. Two stand out prospects, Toucano and
Atacadao, typify this and are of particular interest. Toucano is a
series of artisanal open pits covering a strike length of some 600
metres, which is reported to have produced exceptional grades, some of
which have been mined within a 20-metre-wide mineralised zone to depths
of 40 metres. At Atacadao, a 11-hole drill programme was completed in
2006, testing the mineralisation under the artisanal workings. The
results of this modest programme intersected high grade gold
mineralisation ranging from 3 to 60g/t gold at an average true width of
between 0.2 to 0.8 metres.
Use the link below to access Figure 2 - map showing expanded Jardim do
Ouro tenement holdings including new tenements acquired --
https://bit.ly/3oEUCT4
"A third rig has recently commenced drilling strike extensions beyond
the mine limits of the Palito orebody.
"Regional exploration has also been restarted, with geochemical and
geophysical works focusing on Calico and Juca prospects to the south of
Palito.
"I look forward to updating the market with all these recent exploration
activities in the next weeks.
Use the link below to access Figure 3 - Regional plan showing Jardim do
Ouro tenement and contours of copper and gold soil anomalies identified
by geochemical sampling --
https://www.globenewswire.com/Tracker?data=IOhhTv5cX3ameX_T_AnbEAfPFMb485jlr2PkmkK6SHu_Zn9PbpHlb7eirVyJSQEyFlzHbmjAMHYIiOFLCcgLLql_VZd0OShFHZ9M5SWlXSg=
https://bit.ly/3oVG9Cc
"Finally, the permitting of Coringa received a significant boost during
the fourth quarter with the much-anticipated award of the Licença
Prévia which was formally issued by the state environmental agency
("SEMAS") on 8 October 2020. Progress is now continuing as we work with
our environmental consultants and legal counsel to secure the
Installation License (LI), which is the permit required to begin
construction. We are pleased to report that the Federal Agency for
Indigenous Communities FUNAI have confirmed their full support for the
project and just before the year end, the Federal Agency for Land Use,
INCRA, entered into final discussions to officially agree the change of
land use to mineral exploitation. We are now therefore very optimistic
we will be in a position to start up the development of Coringa later
this year.
"During the quarter, the Company has settled a further US$3.0 million of
the remaining purchase consideration for Coringa and with a further
US$1.0 million paid on 1 January 2020, the remaining portion of the
original acquisition price still to be paid is US$4.5 million plus
interest, so I anticipate that we will have settled this liability in
full during the second quarter of 2021. We have not drawn down any
further money under the convertible loan arrangements with Greenstone
during the quarter and at the current time the total value of the
convertible loan outstanding remains at US$2.0 million.
"The final shipment of concentrate for the year, and the second shipment
for the quarter, took place in the last days of the December, and the
initial proceeds of US$1.5 million from this sale were received in the
first days of January 2021. Including this receipt, the cash position
at the end of December on a like for like basis was US$8.1 million.
Sales of physical gold during the third quarter were approximately 1,000
ounces greater than production levels reflecting normal stock movements
and so it was always expected that this would affect the level of gold
physically sold in the fourth quarter with a consequent impact on cash.
In addition, to restarting exploration activity in the period with the
additional costs this involves compared to prior quarters, the fourth
quarter is the period when 13(th) salary payments are made, creating an
additional call on cash resources."
Production Results
Total production for the final quarter of 2020 was 7,254 ounces of gold,
generated from the processing of 43,440 tonnes of ore with an overall
average grade of 5.27 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 9,092 tonnes of surface stockpiled
flotation tailings grading approximately 3.0 g/t gold. Mined tonnage
for the quarter totalled 46,275 tonnes with a grade of 5.24 g/t of gold.
As reported last quarter, the lower mine and processed grades have been
a combination of fewer faces underground, generating lower volumes. The
fourth quarter did however see processed grades improve by 9% compared
with the third quarter. Total production for the year was 32,003 ounces
of gold.
On 31 December 2020, there were coarse ore stocks of approximately 3,800
tonnes of ore with an average grade of 4.2 g/t of gold, and an estimated
stockpile of 4,500 wet tonnes of flotation tails with an estimated
average grade of 1.50 g/t of gold. These stockpiles continue to be
consumed slowly and used as a 'top-up' to ROM ore to keep the plant
full. The stockpile of flotation tailings is sufficient to continue to
process this material at current rates for the early part of 2021.
A total of 3,353 metres of horizontal development has been completed
during the quarter, of which 1,510 metres was ore development. The
balance is the ramp, cross cuts and stope preparation development.
2021 Production Guidance
As discussed above, the impact of CV-19 pandemic has resulted in reduced
levels of production during 2020 compared with the originally forecast
levels. Whilst the numbers of personnel at site have returned to
pre-pandemic levels, as previously reported mining activities were
simplified during the second and third quarters to reflect the lower
numbers of staff able to be at site which has reduced the number of
faces that are active at both deposits. Additional crews are being
recruited to provide a short-term boost to mining activity and recover
the optionality that has previously existed, but it may be six months
before the benefits start to fully flow through into production. With
this background the Company anticipates that production for 2021 from
the current Palito Complex operations will be between 33,000 and 36,000
ounces with production in 2022 then increasing to approximately 45,000
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
-- Q4 2020 Operational Report
https://ml-eu.globenewswire.com/Resource/Download/7e632198-3182-4a9c-8b79-4813883255e9
(END) Dow Jones Newswires
January 15, 2021 02:00 ET (07:00 GMT)
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