TIDMSRB
For immediate release
26 July 2017
Serabi Gold plc
("Serabi" or the "Company")
Strong second quarter production consolidating mid-year position with
guidance maintained.
Serabi Gold plc (AIM:SRB, TSX:SBI), the Brazilian focused gold mining
and development company, is pleased to report second quarter production
of 8,148 ounces of gold its Palito/Sao Chico high grade gold operation
in the Tapajos region of Para State, Northern Brazil.
HIGHLIGHTS
-- Second quarter production of 8,148 ounces of gold.
-- Mine production totalled 42,075 tonnes at 7.80 grammes per tonne ("g/t")
of gold.
-- 43,905 tonnes processed through the plant for the combined mining
operations, with an average grade of 6.26 g/t of gold.
-- 1,855 metres of horizontal mine development completed in the quarter.
-- At the Palito sector, expansion of working areas continues, with
development and production now coming from eight veins from the 25
included in the geological resource. The main ramp has now reached the
-50mRL, with the G3 vein intersected, the deepest working area in the
deposit. To date grades have been very encouraging.
-- At the Sao Chico sector, the main ramp has now been deepened to the 40mRL,
approximately 200 vertical metres below surface. Production is coming
from the 140mRL and 128mRL levels with levels 116mRL, 100mRL, 86mRL,
70mRL and now 40mRL being developed, so development remains well ahead of
production.
-- By the end of the second quarter, surface ore stocks were approximately
12,000 tonnes (31 March 2017: 13,000 tonnes) with an average grade of
3.15 g/t of gold.
The following link can be used to access an interview by BRR Media with
Mike Hodgson, CEO discussing the second quarter operational results
https://www.brrmedia.co.uk/broadcasts-embed/597739289ff3a6521c9fd7ce/event/?livelink=true
Mike Hodgson, CEO, said:
"Following an excellent first quarter, when the Company produced almost
10,000 ounces of gold, we have enjoyed a satisfactory second quarter
with further production of over 8,000 ounces. With the mid-year total
standing at over 18,000 ounces, we can be very satisfied with the
production results for the year to date.
"Mine production from both the Palito and Sao Chico sectors progressed
well, although grades were a little lower than scheduled for April and
May, resulting in the second quarter gold production being lower than
that of the first quarter. The lower grades which were behind this,
were largely a result of an operational issue (as further detailed
below) in the Sao Chico sector, where planned higher grade stope
production had to be replaced by lower grade development ore.
Production improved significantly in June and the operational issue has
now been fully resolved. We therefore remain confident that full year
production guidance will be achieved. At the Palito sector, production
remained steady.
"Overall mining rates of the Sao Chico orebody were in line with
forecasts though whilst the average grade at 8.30 g/t is very reasonable,
it was below our budget and less than the 'highs' of the first quarter
where we mined ore with average grades in excess of 12 g/t. The reason
behind this decrease was quite simple. The stoping method at Sao Chico
requires the use of remote controlled loaders to muck the broken ore.
As noted in our first quarter update, stoping has only recently begun at
the Sao Chico orebody, and therefore we are still in the process of
building up our fleet. During the first quarter, we had one new loader
with a second new unit planned to arrive in June. Unfortunately the
first loader, although itself only four months old, suffered a major
mechanical problem and this impacted significantly on our stope
production during April and much of May. As a result, we had to use
development ore to provide mill feed. Ore recovered from development
mining is unavoidably more diluted and is therefore generally lower
grade. By June, with the original unit returned to full operation and
the second new unit commissioned and operating, production improved
significantly, borne out by 42 per cent of the gold production from the
Sao Chico orebody for the second quarter of 2017 being achieved in June.
With the additional development completed in the quarter, making
available additional stoping blocks, we feel confident, the second
quarter shortfall will be recovered over the remainder of the year and
we will meet our full year production guidance of 40,000 ounces.
"At the Palito orebody, over eight veins are now in various stages of
development, with production mainly coming from the Pipocas, G3, Senna
and Jatoba veins. The G3 vein has now been intersected on the -50mRL,
our lowest level in the mine, with excellent grades being encountered.
The other main vein, Pipocas, is now being developed on the 30mRL, and
it too is exhibiting some excellent long-term potential.
"In the plant, the quarterly performance was excellent, with
approximately 43,000 tonnes of run of mine ore ("ROM") milled. With
42,000 tonnes mined, the small difference was made up from the low grade
development stockpile which has shown minimal change between the end of
the first quarter and the end of this quarter. We remain mill limited,
and for this reason we have sought to reduce development rates to try to
make inroads into these surface stockpiles, though as we can see, the
mine has continued to generate sufficient ROM.
"As I reported last quarter, during the latter half of 2016 the Company
reported that, following the extension of its exploration license
holdings around the Sao Chico orebody, it had recommenced surface
exploration, with an IP geophysical survey. The results revealed two
excellent anomalies 600 metres to the north and 300 metres to the south
of the current mining operations, which, from a geophysical perspective,
look even stronger than the orebody being mined. These anomalies appear
to possess a geometry consistent with the known orebody and the
potential for parallel mineralisation. These targets are just beyond
the capability of the underground drill rigs we have, hence we have not
been able to recommence the programme as planned and will now pursue
this during the second half of the year.
"Exploration and evaluation drilling underground continued with
approximately 2,000 metres of diamond drilling completed. This drilling
is focusing on drilling into inferred resources of the down dip
extension of the Main Vein in the Sao Chico orebody as well as the
inferred resource in the Senna, Pipocas and G3 veins in the Palito
sector.
"Following the excellent first quarter, this second quarter has been
satisfying given the issues that we faced in April and early May, and I
am pleased to say the improvement in the latter part of May and an
excellent June has got things back on track for the year as a whole.
This improvement has continued in July which to date has also been a
very good month, so we look forward to a good third quarter. With the
dry season upon us, we also hope to see our exploration efforts stepped
up during the second half of the year."
Results
Total production for the second quarter of 2017 was 8,148 ounces of gold,
generated from the processing of the ROM ore from the Palito and Sao
Chico sectors, combined with the Palito surface coarse ore and the
stockpiled flotation tailings accumulated from Palito mine production in
2014.
Gold production for the second quarter came from the processing of
43,905 tonnes of ore at overall combined grades of 6.26 g/t gold, which
was sourced from mined ore from the Palito and Sao Chico orebodies,
supplemented with lower grade surface stockpiled ROM and flotation
tailings. Mined tonnage for the quarter totalled 42,075 tonnes with a
grade of 7.80 g/t of gold.
At 30 June 2017, there were coarse ore stocks of approximately 12,000
tonnes with an average grade of 3.15 g/t of gold, and approximately
35,000 tonnes of flotation tails with an average grade of 2.50 g/t of
gold. This stock is being consumed, albeit not as quickly as forecast,
and for now the operation remains plant constrained.
A total of 1,855 metres of horizontal development has been completed
during the quarter, of which approximately 950 metres was ore
development. The balance is the ramp, cross cuts and stope preparation
development.
2017 Guidance
The Company forecast 40,000 ounces of gold production for the year, with
an AISC of between $950 and $975 per ounce, broadly in line with the
cost guidance of 2016. Gold production for the first half remains
broadly in line with the Company's forecast.
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 despite the operational challenges faced in April and May,
production efficiencies and improvements will allow Serabi to meet its
production guidance.
Quarter Quarter
1 2 Total H1 H2 Total Total
2017 2017 2017 2016 2016 2016 2015
Horizontal
development
- Palito Metres 1,669 1,393 3,062 3,810 3,605 7,345 6,800
Horizontal
development
- Sao
Chico Metres 582 462 1,044 2,056 1,738 3,794 2,800
Horizontal
development
- Total Metres 2,251 1,855 4,106 5,866 5,343 11,209 9,600
Mined ore -
Palito Tonnes 26,093 27,890 53,983 51,950 66,527 118,477 111,751
Gold grade (g/t) 9.07 7.55 8.29 11.18 8.41 9.62 10.05
Mined ore -
Sao Chico Tonnes 10,825 14,185 25,010 19,202 21,185 40,387 24,096
Gold grade (g/t) 12.64 8.30 10.18 8.04 12.00 10.12 8.66
Mined ore -
Total Tonnes 36,918 42,075 78,993 71,152 87,712 158,864 135,847
Gold grade (g/t) 10.12 7.80 8.89 10.33 9.27 9.74 9.8
Milled ore Tonnes 46,663 43,905 90,568 76,017 82,949 158,966 130,299
Gold grade (g/t) 7.09 6.26 6.69 8.37 7.85 8.11 8.43
Gold
production Ounces 9,861 8,148 18,009 19,667 19,723 39,390 32,629
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 2017 include treatment of 4,042 tonnes of
flotation tails (2016 full year: 16,716 tonnes)
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 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
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 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 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.
ENDS
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Serabi Gold plc via Globenewswire
http://www.serabigold.com
(END) Dow Jones Newswires
July 26, 2017 02:00 ET (06:00 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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