Serabi Gold plc (AIM:SRB) (TSX:SBI), the
Brazilian focused gold mining and development company, reports
record annual production of almost 40,000 ounces of gold, exceeding
guidance and provides an operational update for the fourth quarter
of 2016 on its wholly owned Palito and Sao Chico gold operations in
the Tapajos region of Para State, Northern Brazil.
HIGHLIGHTS
- Record annual full year production of 39,390 ounces of gold,
exceeding guidance and representing a 19 per cent improvement
compared with the 2015 calendar year.
- New exploration licences at Sao Chico have been acquired
immediately to the east and west of the deposit, offering excellent
opportunity to expand the deposit, with exploration already
underway.
- Gold production of 9,413 ounces for the fourth quarter of 2016
(Q3 2016 – 10,233 ounces).
- Mine production totalled 44,579 tonnes:
- 34,611 tonnes at a grade of 7.38 grammes per tonne
(“g/t”) of gold from Palito.
- 9,968 tonnes at a grade of 14.38 g/t of gold from Sao
Chico.
- 40,485 tonnes of ore processed through the plant for the
combined mining operations, at a combined grade of 7.60 g/t of
gold.
- 2,624 metres of horizontal mine development completed in the
quarter with 1,928 metres completed at Palito and 696 metres at Sao
Chico.
- During the quarter, the installation of a new carbon
regeneration kiln was completed, this is now effectively
regenerating ‘fouled’ carbon and early results suggest significant
improvement in gold recoveries.
- At Palito the development of the Senna vein is continuing, the
sublevels are being developed on 250mRL, 237mRL, 225mRL, 210mRL and
ramping down to the 180mRL. At Palito Main Zone, the main
ramp has now reached the -50mRL, where the G3 vein has been
intersected and is ready to be developed.
- At Sao Chico the main ramp has now been deepened to the 71mRL ,
some 170 vertical metres below surface.
- During the fourth quarter, a total of 2,814 metres of
underground diamond drilling was completed across both sites.
At Sao Chico, a combination of exploration and evaluation drilling,
totalling 1,267 metres was completed, mostly drilling the inferred
resource blocks below the 86mRL. At Palito, a total of 1,547
metres of mostly exploration drilling was completed, principally
drilling the inferred resource blocks on the Senna vein below the
200mRL.
- At the year end, the combined surface stockpiles at Palito and
Sao Chico totalled 21,000 tonnes of ore with an average grade of
4.0 g/t of gold.
Mike Hodgson, CEO, said:
“We are delighted to have exceeded our
production guidance with a total of 39,390 ounces of gold being
produced for the year which also represents the highest annual gold
production from Serabi’s operations in the Tapajos region.
The final three months of the year saw another steady quarter of
production of approximately 9,400 ounces of gold, to compliment the
gold production of the previous three quarters and demonstrating
the continued dependable performance of the
business.
“The mines have performed well. At
Palito the operation continues to perform steadily, although
extracted mine grade during the quarter was lower than planned as a
result of ore being ‘cemented’ in two stopes. This ore is not
lost, and is being slowly recovered, but not as fast as we had
budgeted. The production shortfall was partially compensated
by more development ore, albeit with a lower gold grade. This
resulted in a Palito head grade for the quarter of 7.4 g/t of gold,
compared to 9.5 g/t of gold for the previous quarter.
However, the benefit of this ore development is that the mine is
now generating ore from four sectors, Senna, Chico da Santa, G3 and
Pipocas with Senna playing an ever increasing role in our
production plan. Production from stoping has not commenced
there but, in 2017, we will see a significant level of ore being
produced from stoping at Senna.
“At Sao Chico, ore development and
production continued in line with our plans and grades were
excellent, returning over 14 g/t for the quarter. The main
ramp has now reached the 70mRL with the Main Vein
intersected. Development continues on the 100mRL, 86mRL and
the new 70mRL. Stoping is focused on the final blocks on the
186mRL, 156mRL and 140mRL.
“As reported last quarter, the plant saw
the introduction of the third mill during Q3. This was primarily
acquired to establish much needed contingency in the plant and to
reduce the impact of unforeseen mechanical problems, essential in a
moderately remote operation such as ours. In October and again in
December the importance of this contingency planning was
demonstrated. In both months we suffered short–term
breakdowns, and the ability to maintain throughputs rates by having
a third mill was therefore invaluable. An additional short term
benefit of three mills operating has been the increased throughput
capacity, allowing us to consume the low grade surface stock that
had built up over the past three years.
“Approximately 2,800 metres of diamond
drilling was completed across the Palito and Sao Chico Mines during
the quarter. The drilling at both sites was a combination of
exploration and evaluation drill holes. At Palito, activities
were principally focused on drilling the inferred resource blocks
that lie down-dip below the current development levels in the Senna
and Pipocas veins, whilst at Sao Chico, drilling focused upon the
Main Vein below the lowest current development level at the 70mRL
down to the -50mRL. At Senna, the results were generally
good, showing strong down-dip continuity in thickness and
grade. Whilst this sector does not share quite the same high
grades as seen in the Palito Main Zone, the structure appears to be
geometrically regular, which benefits mining, and intersected
grades are in the 6.0 g/t to 9.0 g/t range over widths generally in
excess of one metre. At Sao Chico, a total of 1,300
metres of down dip-drilling also gave satisfying results. In each
case the Main Vein was intersected, confirming the strong
structural continuity with a good range of grades being
reported.
“The quarter saw surface exploration
recommence at Sao Chico. As reported last quarter, we
acquired the exploration license to the west and south of the Sao
Chico Mine last year, and we are very keen to test the potential
continuation of the Sao Chico Main Vein into these areas.
During the quarter, we commenced a surface Induced Polarization
(”IP”) programme to the west and south, and although poor weather
caused the work to be suspended it is expected that it will restart
during the second quarter of 2017. The purpose of the
programme is to use IP to trace the trend of the Main Vein, which
has sufficient sulphides to provide a clear conductivity anomaly,
which in turn, will be targeted in a subsequent drill
programme.
“Since commencing operations in 2014,
Serabi has shown steady, modest growth, and whilst this past year
we have had to face some pretty strong economic headwinds in terms
of gold price and the strengthening of the Brazilian Real,
operationally we have had a terrific year. With both mines
operating well, drilling ongoing and exploration recommencing, I
look forward to providing regular updates in a year where we hope
to see improving margins.”
Results
Total production for the fourth quarter of 2016
was 9,413 ounces of gold, generated from the processing of the run
of mine (“ROM”) ore from the Palito and Sao Chico Mines, combined
with the Palito surface coarse ore and the stockpiled flotation
tailings accumulated from Palito mine production in 2014.
Gold production for the fourth quarter came from
the processing of 40,485 tonnes of hard rock ROM ore from the
Palito and Sao Chico Mines with an average grade of 7.60 g/t of
gold. The total mined ore for the same period was 44,579
tonnes with an average grade of 8.95 g/t of gold. In addition
to the ROM ore, a further 3,039 tonnes of flotation tailings with a
grade of 3.82 g/t of gold was processed through the cyanidation
plant.
At 31st December 2016, there were coarse ore
stocks of approximately 21,000 tonnes with an average grade of 4.0
g/t of gold, and approximately 22,000 tonnes of flotation tails
with an average grade of 2.5 g/t of gold. Despite the plant
expansion to three ball mills during the third quarter, the easy
and rapid ore development of the Senna vein, particularly due to
its proximity to surface, has meant increasing stock levels during
this quarter.
A total of 1,928 metres of horizontal
development has been completed during the quarter at the Palito
Mine, of which 1,172 metres is represented by ore development, with
the balance being on the development of ramps, cross cuts and stope
preparation. At the Sao Chico Mine a total of 696 metres of
horizontal development was completed, of which 266 metres
represents ore development, with much of the balance being ramp
development and cross cuts reflecting the on-going deepening of the
mine.
2017 Guidance
With 39,390 ounces of gold produced for 2016,
the Company feels confident it can forecast expected production for
2017 of 40,000 ounces at an AISC of between $950 and $975 per
ounce, which is in line with the cost guidance of 2016.
The 2017 guidance of 40,000 ounces is an eight
per cent improvement on Serabi’s initial guidance for 2016 which
was 37,000 ounces. Management hope that, with the production
efficiencies and improvements that can be implemented in 2017,
Serabi will again be able to improve on its production guidance, as
it did in 2016, where the Company exceeded its initial guidance by
6.5 per cent to produce 39,390 ounces.
|
|
Quarter 1 |
Quarter 2 |
Quarter 3 |
Quarter 4 |
Total |
Total |
2016 |
2016 |
2016 |
2016 |
2016 |
2015 |
Horizontal development
– Palito |
Metres |
1,900 |
1,910 |
1,607 |
1,928 |
7,345 |
6,800 |
Horizontal development
– Sao Chico |
Metres |
1,025 |
1,031 |
1,042 |
696 |
3,794 |
2,800 |
Horizontal development
– Total |
Metres |
2,925 |
2,941 |
2,649 |
2,694 |
11,209 |
9,600 |
|
|
|
|
|
|
|
|
Mined ore – Palito |
Tonnes |
26,752 |
25,198 |
31,916 |
34,611 |
118,477 |
111,751 |
|
Gold grade (g/t) |
11.84 |
10.48 |
9.52 |
7.38 |
9.62 |
10.05 |
Mined ore – Sao
Chico |
Tonnes |
10,794 |
8,408 |
11,217 |
9,968 |
40,387 |
24,096 |
|
Gold grade (g/t) |
9.00 |
6.81 |
9.88 |
14.38 |
10.12 |
8.66 |
Mined ore – Total |
Tonnes |
37,546 |
33,606 |
43,133 |
44,579 |
158,864 |
135,847 |
|
Gold grade (g/t) |
11.02 |
9.56 |
9.61 |
8.94 |
9.74 |
9.8 |
|
|
|
|
|
|
|
|
Milled ore |
Tonnes |
36,615 |
39,402 |
42,464 |
40,485 |
158,966 |
130,299 |
|
Gold grade (g/t) |
8.58 |
8.17 |
8.08 |
7.60 |
8.11 |
8.43 |
(1) Gold production figures are subject to amendment pending
final agreed assays of the gold content of the copper/gold
concentrate and the gold bullion when smelting and refining
processes are completed.
(2) Gold production totals for 2016 include treatment of 16,716
tonnes of flotation tails.
This announcement is inside information for the
purposes of Article 7 of Regulation 596/2014.
Enquiries:
Serabi Gold plc |
|
Michael Hodgson |
Tel:
+44 (0)20 7246 6830 |
Chief
Executive |
Mobile: +44 (0)7799 473621 |
|
|
Clive
Line |
Tel:
+44 (0)20 7246 6830 |
Finance Director |
Mobile: +44 (0)7710 151692 |
|
|
Email: contact@serabigold.com |
|
Website: www.serabigold.com |
|
|
|
Beaumont Cornish LimitedNominated Adviser and Financial
Adviser |
|
Roland Cornish |
Tel:
+44 (0)20 7628 3396 |
Michael Cornish |
Tel:
+44 (0)20 7628 3396 |
|
|
Peel
Hunt LLPUK Broker |
|
Matthew Armitt |
Tel:
+44 (0)20 7418 8900 |
Ross
Allister |
Tel:
+44 (0)20 7418 8900 |
|
|
Blytheweigh Public Relations |
|
Tim
Blythe |
Tel:
+44 (0)20 7138 3204 |
Camilla Horsfall |
Tel:
+44 (0)20 7138 3224 |
Copies of this announcement are available from
the Company's website at www.serabigold.com.
Neither the Toronto Stock Exchange, nor any
other securities regulatory authority, has approved or disapproved
of the contents of this announcement.
GLOSSARY OF TERMS
The following is a glossary of technical
terms:
“Au” means gold.
“assay” in economic geology, means to
analyze the proportions of metal in a rock or overburden sample; to
test an ore or mineral for composition, purity, weight or other
properties of commercial interest.
“development” - excavations used to
establish access to the mineralised rock and other workings
“DNPM” is the Departamento Nacional de Produção
Mineral.
“grade” is the concentration of mineral within
the host rock typically quoted as grams per tonne (g/t), parts per
million (ppm) or parts per billion (ppb).
“g/t” means grams per tonne.
“granodiorite” is an igneous intrusive rock
similar to granite.
“igneous” is a rock that has solidified from
molten material or magma.
“Intrusive” is a body of igneous rock that
invades older rocks.
“on-lode development” - Development that is
undertaken in and following the direction of the Vein
“mRL” – depth in metres measured relative
to a fixed point – in the case of Palito and Sao Chico this is
sea-level. The mine entrance at Palito is at 250mRL.
“saprolite” is a weathered or decomposed
clay‐rich rock.
“stoping blocks” – a discrete area of
mineralised rock established for planning and scheduling purposes
that will be mined using one of the various stoping
methods.
“vein” is a generic term to describe an
occurrence of mineralised rock within an area of non-mineralised
rock.
Qualified Persons StatementThe
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
StatementsCertain statements in this announcement are, or
may be deemed to be, forward looking statements. Forward looking
statements are identified by their use of terms and phrases such as
‘‘believe’’, ‘‘could’’, “should” ‘‘envisage’’, ‘‘estimate’’,
‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘will’’ or the negative of those,
variations or comparable expressions, including references to
assumptions. These forward looking statements are not based on
historical facts but rather on the Directors’ current expectations
and assumptions regarding the Company’s future growth, results of
operations, performance, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, business prospects and opportunities. Such
forward looking statements reflect the Directors’ current beliefs
and assumptions and are based on information currently available to
the Directors. A number of factors could cause actual results to
differ materially from the results discussed in the forward looking
statements including risks associated with vulnerability to general
economic and business conditions, competition, environmental and
other regulatory changes, actions by governmental authorities, the
availability of capital markets, reliance on key personnel,
uninsured and underinsured losses and other factors, many of which
are beyond the control of the Company. Although any forward looking
statements contained in this announcement are based upon what the
Directors believe to be reasonable assumptions, the Company cannot
assure investors that actual results will be consistent with such
forward looking statements.
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