TIDMSRB
For immediate release
29 March 2018
Serabi Gold plc
("Serabi" or the "Company")
Audited Results for the year ended 31 December 2017
Serabi (AIM:SRB, TSX:SBI), the Brazilian focused gold mining and
development company, today releases its audited results for the year
ended 31 December 2017.
Key Financial Information
SUMMARY FINANCIAL STATISTICS FOR THE THREE AND TWELVE
MONTHSING 31 DECEMBER 2017
3 months to 12 months to 3 months to 12 months to
31 December 2017 31 December 2017 31 December 2016 31 December 2016
US$ US$ US$ US$
Revenue 12,224,818 48,449,868 10,472,823 52,593,751
Cost of Sales 8,407,318 32,965,498 7,077,485 32,906,426
Depreciation
and
amortisation
charges 2,919,436 10,465,283 1,832,637 8,384,738
Gross profit 898,064 5,019,087 1,562,701 11,302,587
(Loss) /
profit
before tax (1,408,368) (1,745,503) (435,552) 1,870,179
(Loss) /
profit after
tax (1,627,274) (2,397,903) 2,958,630 4,430,292
Earnings per
ordinary
share
(basic) (0.230) cents (0.343) cents 0.423 cents 0.659 cents
Average gold
price
received US$1,265 US$1,244 US$1,207 US$1,245
As at As at
31 December 2017 31 December 2016
Cash and cash
equivalents 4,093,866 4,160,923
Net assets 60,770,712 63,378,973
Cash Cost and
All-In
Sustaining
Cost
("AISC")
12 months to 12 months to
31 December 2017 31 December 2016
Gold
production
for cash
cost and
AISC
purposes 37,004 39,390
Total Cash US$799 US$770
Cost of
production
(per ounce)
Total AISC of US$1,071 US$965
production
(per ounce)
Financial Highlights
-- Cash Cost for the year of US$799 per ounce.
-- All-In Sustaining Cost for the year of US$1,071 per ounce.
-- Gross profit from operations of US$5.0 million for 2017.
-- Post tax loss of US$2.4 million reflecting lower gold production and
increased amortisation and depreciation charges resulting from exchange
variations and larger mining fleet.
-- Loss per share of 0.34 cents for 2017.
-- Cash holdings of US$4.1 million at 31 December 2017 (31 December 2016 :
US$4.2 million)
-- Average gold price of US$1,244 received on gold sales in 2017.
-- Concluding a new US$5 million loan with Sprott Resource Lending
Partnership ("Sprott").
2018 Guidance
-- Management does not anticipate a major shift in mine performance and
therefore hard rock gold production, in 2018 compared with 2017. However,
with the ability to process increased levels of stockpiled flotation
tails in 2018, management expects that gold production for 2018 will
exceed that of 2017 and be up to 40,000 ounces
Post year End Highlights
-- Additional US$3 million loan with Sprott to take total loan to US$8
million
-- Announcement of equity financing raising US$15 million through an
investment by Greenstone Resources, a new long-term supportive
shareholder.
Operational Highlights
-- The acquisition of Chapleau Resources Ltd and its wholly owned 376,000
ounce Coringa gold deposit.
-- Total gold production for 2017 of 37,004 ounces.
-- Commencement of an initial 8,000 metre surface drill programme at Palito
in December 2017.
-- Completion of new estimation of Mineral Reserves and Resources for the
Palito Mining Complex. Total Mineral Reserves estimated at 181,000 with
total Mineral Resources of 538,000 ounces.
-- Mine production totalling 168,876 tonnes at 8.92 grammes per tonne
("g/t") of gold.
-- 172,565 tonnes processed through the plant for the combined mining
operations, with an average grade of 7.11 g/t of gold.
-- 9,864 metres of horizontal mine development completed in the year.
-- Successful test work to evaluate the benefits or ore-sorting to improve
process plant efficiency.
-- Palito development and production continues to focus on the four main
sectors of Senna, Pipocas, G3 and Mogno, whilst in the Sao Chico orebody,
the main ramp has now reached level 10mRL, approximately 245 vertical
metres below surface.
Mike Hodgson, CEO of Serabi commented,
I am very pleased to report another solid year for Serabi and with the
future growth that the Company now anticipates over the coming years
from the development of the Coringa gold project and resource growth and
resultant production from the Palito Mining Complex the outlook is very
exciting.
Small producers like Serabi, need to exercise strong control over their
cost base and maximise the efficiencies of their assets to protect
themselves from the economic factors that are beyond their control. To
this end it is pleasing to see that production costs have slightly
reduced year-on-year by 2.7% more than offsetting the effects of
inflation and exchange rate movements. We continue to look at ways to
improve efficiency and make our assets work harder and better, looking
to improve gold production whilst keeping costs at least static.
Gold production in 2017 was down compared with the preceding year with a
consequential impact on revenue and gross profit. However, the equipment
commissioning issue that gave rise to a slight fall in production in the
second quarter of 2017 is now well behind us, we have delivered two
subsequent quarters of solid gold production and we expect gold
production for 2018 to return to around or even slightly above that of
2016. I hope that the favourable gold price and exchange rate that we
have enjoyed during the first quarter of 2018, can continue and we will
be able to enjoy a successful year.
The benefit of the reduced levels of debt that the Company held during
2017 are reflected in a significantly lower level of finance costs and
whilst administration expenses rose year on year, these do reflect one
off costs associated with the work undertaken on the acquisition of
Chapleau Resources at the end of the year as well as the NI 43-101
technical report including the new resource and reserve estimation that
was released in December 2017.
Following the end of the year we have taken steps to improve the
financial strength of the Company. The US$15 million share subscription
by Greenstone Resources, a private equity fund dedicated to supporting
mining operations, announced in March 2018, provides the Company with
the necessary capital to advance its ambition to become a 100,000 ounce
producer in the relatively near term. This growth through a combination
of a successful development of the Coringa project and internal growth
at Palito and Sao Chico which can generate further new production can be
significantly advanced with this new injection of capital, supplemented
by the cash flow that we can generate from our existing operations.
Chairman's Statement
Serabi's core business is high grade gold production, and I am pleased
to say that 2017 was another solid year from an operational perspective.
Whilst production was marginally lower than 2016, a total of over 37,000
ounces in 2017 was more than satisfying. With both the Palito and Sao
Chico orebodies in production at planned levels, and some gold
production upside as we step up the treatment of gold bearing flotation
tails generated during the first year of production in 2014, we expect
2018 to be slightly better and return approximately 40,000 ounces of
gold production. Another highlight of the year was, of course, our
acquisition of the neighbouring Coringa gold project. Coringa has
always been an obvious acquisition for us. It is very much a Palito
look-a-like requiring the same approach, project development, mining and
processing we employ at Palito, so Serabi's management and team is well
placed to bring this project into production in the next 24 months. We
have also commenced a surface drill programme that is focussing on
evaluation of the existing discoveries in and around both the Palito and
Sao Chico orebodies. Therefore, through the combination of organic
growth and the development of Coringa, we very much hope we will be
increasing our current gold production levels of 40,000 ounces per annum
and see a significant step change in the Group's evolution.
With the announcement at the end of March of a subscription for new
shares by Greenstone Resources II LP, raising US$15 million, Serabi is
also now well-funded and able to progress its plans. Greenstone is a
well respected, specialist private equity mining fund and I am delighted
to welcome them as a long-term strategic investor in the Company and
look forward to working closely with them to unlock the full potential
of Serabi's gold projects and pursue other growth opportunities.
Over the past three years there has been very stable production from the
Palito complex, and whilst we feel the potential from both orebodies far
exceeds current production levels, the Group has remained focused on
maximising cash generation and building up the working capital of the
business. This allowed us to act quickly, when the opportunity
unexpectedly arose, to acquire the Coringa deposit in December 2017 and
the Group was able to meet the first instalment payment without needing
to secure additional funding at that time. Nevertheless, it is not lost
on the Board that fortunes of small producers like Serabi are very
closely linked to the gold price and also, in our case, the Brazilian
Real/ US Dollar exchange rate. Ultimately, more production with
stronger margins bring the improved economies associated with scale, and
this is the logic behind the acquisition of Coringa. It reinforces the
Group as very much a Brazilian focused producer and developer, and the
synergies are clear, with an established experienced management and
operational team in Brazil, we believe the Group is well placed to
repeat the successful 2013/14 development and commissioning of Palito,
at Coringa.
2017 saw some improvements in metal prices and general confidence in the
sector, and in Brazil, we enjoyed exchange rates working in our favour a
little more, particularly towards the end of the year. Brazil remains
something of an enigma for investors, with juniors struggling to deliver,
and for a country with such resource wealth, the country has been
strangely light on attracting exploration investment from both junior
and major mining companies. This, we feel, gives us great competitive
advantage. With many years of operational experience, we are well
placed to take advantage of others that find the going more challenging.
We have built sound relationships with the various governing agencies
and stakeholders, giving us further advantage. However, things seem to
be changing for the better, as we have seen a number of companies
increasing their involvement in the country over the past 12 months,
some with considerable rumoured success. This renewed appetite is
resulting in larger mining groups, looking to the junior sector for
joint venture opportunities on projects to support their own growth.
This cycle has always been the engine that drives the mining sector. It
brings renewed investor interest and support for the sector to boost
growth and new developments. We are seeing renewed interest from larger
mining groups in the land holdings of the smaller companies in the
country and keen to look at ways to work together that could accelerate
evaluation of some of our tenements This can only bode well for the
region and country as a whole.
Nevertheless the Serabi Board will continues to be prudent in its own
strategy for growth as we seek to maximise the value that we can achieve
from each dollar invested. We remain a small producer for now and will
insist that management continues to follow its proven formula and
systematic approach to exploration activity. We feel we have excellent
potential in our tenements, at Palito, Sao Chico and Coringa, so
anything outside these areas has to be substantially better to be
included in our growth strategy. Growth will always need to be balanced
with the concurrent need to continue to improve the Group's working
capital position and improve its resilience to short term market
movements that can negatively impact on cash flow and margin.
As well as the acquisition of the Coringa gold project, we commenced a
surface drill programme at Palito in late 2017. Our exploration
programme and organic growth, has effectively been on-hold since 2011 as
we focussed on the start-ups at both Palito and Sao Chico, and this has
consumed our free cash flow as well as human resources. We are
delighted these mine site discoveries, made in 2011/2012, are finally
being tested. Just as with the initial acquisition payment for Coringa,
the Group has been able to finance the initial drill from internal cash
flow. The Palito resource comprises over 26 veins clustered together
covering a strike length of up to one kilometre. However, we have now
traced some of the veins over four kilometres so the potential to grow
the resource is compelling.
It is a similar story at Sao Chico, a far more immature deposit than
Palito in terms of geological understanding, but the orebody being mine
lies within a strong regional shear zone that hosts numerous historical
artisanal mines over a five kilometre strike length. In addition,
recent geophysics work, undertaken in 2016, suggests the presence of
additional sub-parallel structures.
Management continue to actively assess other opportunities in Brazil and
the Group's track record of moving exploration projects into production
makes Serabi an attractive partner for companies with less operational
experience. We acquired Coringa during the year, as an asset level deal
that we feel represents great value. The Group has tried to acquire
this asset on other occasions in the past recognising both the potential
of the project and its synergies. The previous operators put a huge
amount of effort and investment into the project and we feel our
patience has been rewarded by acquiring it at a very attractive price.
Furthermore, we believe we have acquired an asset which has high
potential and which can be a more significant gold producer than
currently forecast. The acquisition of Coringa along with our existing
growth opportunities starts us on the path of expansion and we will
continue to pursue opportunities that will bring strong, long term
returns to our existing shareholders.
The next 12 months will bring different, new challenges to the Company.
Whilst we need to maintain production levels, we need to expand the team
to absorb and advance Coringa through permitting and into construction.
The exploration team also need to meet the expectations we have for our
internal growth. Overall, I feel the Company has enjoyed a very
successful 2017, which will form a strong platform for further success
in 2018.
On behalf of the Board of Directors I would like to extend my
appreciation to the employees and management of Serabi for a job well
done during the past year. Their hard work and determination to succeed
means your Company is well positioned to reap the benefits of the higher
gold price environment we expect during 2018 and beyond. Finally, thank
you to our shareholders, large and small, for your patience during the
last few years. I continue to believe the future is extremely bright
for Serabi
Mel Williams - Chairman
Serabi's Directors Report and Financial Statements for the year ended 31
December 2017 together the Chairman's Statement and the Management
Discussion and Analysis, are available from the Company's website -
www.serabigold.com and will be posted on SEDAR at www.sedar.com.
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
Ross Allister Tel: +44 (0)20 7418 8900
James Bavister 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.
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.
The Company will, in compliance with Canadian regulatory requirements,
post its Management Discussion and Analysis for the year ended 31
December 2017 and its Annual Information Form on SEDAR at www.sedar.com.
These documents will also available from the Company's website -
www.serabigold.com.
Annual Report
The Annual Report has been published by the Company on its website at
www.serabigold.com and printed copies are expected to be available by 15
May 2018. Additional copies will be available to the public, free of
charge, from the Company's offices at 2(nd) floor, 30 - 32 Ludgate Hill,
London, EC4M 7DR and will be available to download from the Company's
website at www.serabigold.com.
The data included in the selected annual information table below is
taken from the Company's annual audited financial statements for the
year ended 31 December 2017, which were prepared in accordance with
International Financial Reporting Standards in force at the reporting
date and their interpretations issued by the International Accounting
Standards Board ("IASB") and adopted for use within the European Union
(IFRS) and with IFRS and their interpretations issued by the IASB.
There are no material differences on application to the Group. The
consolidated financial statements have also been prepared in accordance
with those parts of the Companies Act 2006 applicable to companies
reporting under IFRS.
The audited financial statements for the year ended 31 December 2017
will be presented to shareholders for adoption at the Company's next
Annual General Meeting and filed with the Registrar of Companies.
Statement of Comprehensive Income
For the year ended 31 December 2017
Group
For the year For the year
ended 31 ended 31
December December
2017 2016
Notes US$ US$
CONTINUING OPERATIONS
Revenue 48,449,868 52,593,751
Cost of sales (32,015,498) (32,906,426)
Provision for impairment of inventory (950,000) -
Depreciation and amortisation charges (10,465,283) (8,384,738)
Gross profit 5,019,087 11,302,587
Administration expenses (5,500,275) (4,962,524)
Share-based payments (381,362) (350,899)
Gain on disposal of fixed asset 170,591 34,742
Operating (loss) / profit (691,959) 6,023,906
Foreign exchange loss (214,488) (236,619)
Finance expense (839,191) (3,917,681)
Finance income 135 573
(Loss) / profit before taxation (1,745,503) 1,870,179
Income tax (expense) / benefit (652,400) 2,560,113
(Loss) / profit for the period from continuing
operations(1) (2,397,903) 4,430,292
Other comprehensive income (net of tax)
Items that may be reclassified subsequently to profit
or loss
Exchange differences on translating foreign operations (591,720) 8,618,687
Total comprehensive profit / (loss) for the period(1) (2,989,623) 13,048,979
(Loss) / profit per ordinary share (basic) 4 (0.34c) 0.66c
(Loss) / profit per ordinary share (diluted) 4 (0.34c) 0.61c
(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 31 December 2017
Group
2017 2016
US$ US$
Non-current assets
Deferred exploration costs 23,898,819 9,990,789
Property, plant and equipment 48,980,381 45,396,140
Taxes receivable 1,474,062 -
Deferred taxation 2,939,634 3,253,630
Total non-current assets 77,292,896 58,640,559
Current assets
Inventories 6,934,438 8,110,373
Trade and other receivables 1,277,142 1,233,049
Prepayments 3,237,412 3,696,550
Cash and cash equivalents 4,093,866 4,160,923
Total current assets 15,542,858 17,200,895
Current liabilities
Trade and other payables 5,347,964 4,722,139
Interest-bearing liabilities 2,845,712 2,964,057
Acquisition payments outstanding 5,000,000 -
Derivative financial liabilities 709,255 -
Accruals 614,198 635,446
Total current liabilities 14,517,129 8,321,642
Net current assets 1,025,729 8,879,253
Total assets less current liabilities 78,318,625 67,519,812
Non-current liabilities
Trade and other payables 2,753,409 2,211,078
Provisions 2,047,131 1,851,963
Acquisition payments outstanding 9,997,961 -
Interest-bearing liabilities 2,749,412 77,798
Total non-current liabilities 17,547,913 4,140,839
Net assets 60,770,712 63,378,973
Equity
Share capital 5,540,960 5,540,960
Share premium reserve 1,722,222 1,722,222
Option reserve 1,425,024 1,338,652
Other reserves 4,015,369 3,051,862
Translation reserve (31,199,568) (30,607,848)
Retained surplus 79,266,705 82,333,125
Equity shareholders' funds attributable to owners
of the parent 60,770,712 63,378,973
Statements of Changes in Shareholders' Equity
For the year ended 31 December 2017
Share Share Share option Other Translation (Accumulated losses) Total
Group capital premium reserve reserves reserve / retained surplus equity
US$ US$ US$ US$ US$ US$ US$
Equity
shareholders'
funds at 31
December
2015 5,263,182 - 2,747,415 450,262 (39,226,535) 77,549,321 46,783,645
Foreign
currency
adjustments - - - - 8,618,687 - 8,618,687
Profit for
year 4,430,292 4,430,292
Total
comprehensive
loss for the
year - - - - 8,618,687 4,430,292 13,048,979
Transfer to
taxation
reserve - - - 2,690,401 - (2,690,401) -
Release of
fair value
provision on
convertible
loan - - - - - 1,195,450 1,195,450
Warrants
lapsed - - - (88,801) - 88,801 -
Shares issued
in period 277,778 1,722,222 - - - - 2,000,000
Share options
lapsed in
period - - (1,759,662) - - 1,759,662 -
Share option
expense - - 350,899 - - - 350,899
Equity
shareholders'
funds at 31
December
2016 5,540,960 1,722,222 1,338,652 3,051,862 (30,607,848) 82,333,125 63,378,973
Foreign
currency
adjustments - - - - (591,720) - (591,720)
Loss for year - - - - - (2,397,903) (2,397,903)
Total
comprehensive
income for
the year - - - - (591,720) (2,397,903) (2,989,623)
Transfer to
taxation
reserve - - - 963,507 - (963,507) -
Share options
lapsed in
period - - (294,990) - - 294,990 -
Share option
expense - - 381,362 - - - 381,3620
Equity
shareholders'
funds at 31
December
2017 5,540,960 1,722,222 1,425,024 4,015,369 (31,199,568) 79,266,705 60,770,712
Other reserves comprise a merger reserve of US$361,461 and a taxation
reserve of US$3,653,908 (2016: merger reserve of US$361,461 and taxation
reserve of US$2,690,401).
Cash Flow Statements
For the year ended 31 December 2017
Group
For the For the
year ended year ended
31 December 31 December
2017 2016
US$ US$
Cash outflows from operating activities
Operating profit / (loss) (2,397,903) 4,430,292
Net financial expense 1,053,544 4,153,727
Depreciation - plant, equipment and mining properties 10,465,283 8,384,738
Provision for impairment of inventory 950,000 -
Other provisions 156,404 -
Taxation (benefit) / expense 652,400 (2,560,113)
Share-based payments 381,362 350,899
Interest paid (747,072) (2,049,900)
Foreign exchange (178,753) (1,045,460)
Finance charges - (37,500)
Changes in working capital
(Increase) / decrease in inventories (287,898) 153,314
(Increase) / decrease in receivables, prepayments
and accrued income (1,968,858) 4,177,110
Increase / (decrease) in payables, accruals and provisions 165,249 195,845
Increase / (decrease) in short term intercompany
payables - -
Net cash flow from operations 8,243,758 16,152,952
Investing activities
Acquisition of subsidiary net of cash acquired (4,994,665) -
Purchase of property, plant, equipment and projects
in construction (2,144,753) (3,042,043)
Mine development expenditure (4,362,192) (2,366,486)
Geological exploration expenditure (2,487) (525,444)
Proceeds from sale of assets 214,566 34,742
Interest received and other finance income 135 573
Net cash outflow on investing activities (11,289,396) (5,898,658)
Financing activities
Convertible loan received and subsequent conversion
to ordinary shares - 2,000,000
Draw-down of short-term loan facility 3,628,511 -
Repayment of short term secured loan - (3,111,111)
Receipt from repayment of intercompany loan - -
Payment of finance lease liabilities (644,340) (755,858)
Receipts for short term trade finance - 15,146,817
Repayment of short term trade finance - (21,384,139)
Net cash (outflow) / inflow from financing activities 2,984,171 (8,104,291)
Net (decrease) / increase in cash and cash equivalents (61,467) 2,150,003
Cash and cash equivalents at beginning of period 4,160,923 2,191,759
Exchange difference on cash (5,590) (180,839)
Cash and cash equivalents at end of period 4,093,866 4,160,923
Notes
1. General Information
The financial information set out above for the years ended 31 December
2017 and 31 December 2016 does not constitute statutory accounts as
defined in Section 434 of the Companies Act 2006,,but is derived from
those accounts. 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. A copy of
the statutory accounts for 2016 has been delivered to the Registrar of
Companies and those for 2017 will be delivered to the Registrar of
Companies following approval by shareholders at the Annual General
Meeting. The full audited financial statements for the years end 31
December 2017 and 31 December 2016 comply with IFRS.
2. Auditor's Opinion
The auditor has issued an unqualified opinion in respect of the
financial statements for both 2016 and 2017 which do not contain any
statements under the Companies Act 2006, Section 498(2) or Section
498(3).
3. Basis of Preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") in force at the
reporting date and their interpretations issued by the International
Accounting Standards Board ("IASB") as adopted for use within the
European Union and with IFRS and their interpretations issued by the
IASB. The consolidated financial statements have also been prepared in
accordance with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS.
At the date of authorisation of the financial statements, the following
standards and relevant interpretations, which have not been applied in
these financial statements, were in issue but not yet effective (and
some of which were pending endorsement by the EU):
lFRS 9 Financial Instruments
lFRS 15 Revenue from Contracts
IFRS 16 Leases
The only standard that is anticipated to be significant or relevant to
the Group is IFRS 9 "Financial Instruments". The new standard will
replace existing accounting standards. It is applicable to financial
assets and liabilities and will introduce changes to existing accounting
concerning classification, measurement and impairment (introducing an
expected loss method).
IFRS 15 'Revenue from Contracts with Customers' is not expected to have
a material impact on the Group at this stage of the Group's operations.
IFRS 16 will require the recognition of an asset and liability with
respect to the material operating lease commitments that the group have.
Management are currently considering the impact that this will have on
the financial statements.
The revenue contracts held by the Group usually contain a single
performance criteria that is satisfied at a point in time. The Group
will adopt the above standards at the time stipulated by that standard.
The Group does not at this time anticipate voluntary early adoption of
any of the standards.
Going concern and availability of finance
On 23 March 2018 the Company entered into a Subscription Agreement with
Greenstone resources II LP ("Greenstone"), Greenstone has conditionally
agreed to subscribe ("the Subscription") for 297,759,419 New Ordinary
Shares ("the Subscription Shares") at a price of 3.6 pence per share
(the "Subscription Price"). The New Ordinary Shares to be issued
pursuant to the Subscription will rank pari passu with the existing
Ordinary Shares. Application will be made to the London Stock Exchange
for the Subscription Shares to be admitted to trading on AIM
("Admission") and listed for trading on the TSX. Completion of the
Subscription and Admission is expected to take place at 8:00 a.m. on or
around 12 April 2018.
The Directors anticipate the Group now has access to sufficient funding
for its immediate projected needs. The Group expects to have sufficient
cash flow from its forecast production to finance its on-going
operational requirements, to repay its secured loan facilities and to
fund planned exploration and development activity on its other gold
properties. However additional funding will be required to bring the
newly acquired Coringa gold project into production including the final
acquisition payment. The secured loan facility is repayable by 30 June
2020 and at 31 December 2017, the amount outstanding under this facility
was US$4.48 million (2016: US$1.37 million).
The Directors consider that the Group's operations are performing at the
levels that they anticipate but the Group remains a small-scale gold
producer. Any unplanned interruption or reduction in gold production,
unforeseen reductions in the gold price or appreciation of the Brazilian
currency, could adversely affect the level of free cash flow that the
Group can generate on a monthly basis. Nonetheless with the proceeds to
be received from the Subscription, the Directors consider that they will
nonetheless be able to meet its financial obligations as they fall due.
On this basis, the Directors have therefore concluded that it is
appropriate to prepare the financial statements on a going concern
basis.
4. Earnings per Share
For the year
ended 31 For the year ended 31
December 2017 December 2016
(Loss) / profit attributable to ordinary shareholders
(US$) (2,397,903) 4,430,292
Weighted average ordinary shares in issue 698,701,772 672,502,757
Basic (loss) / profit per share (US cents) (0.343) 0.659
Diluted ordinary shares in issue 698,701,772(1) 722,412,757(2)
Diluted (loss) / profit per share (US cents) (0.343) 0.613
1. As the effect of dilution is to reduce the loss per share, the diluted
loss per share is considered to be the same as the basic loss per share.
2. Assumes exercise of all options and warrants outstanding as of that date.
5. Post balance sheet events
On 22 January 2018, the Group increased its loan with Sprott by US$3
million ("The New Loan") and at the same time extended the final
repayment period on its existing US$5 million loan (The Existing Loan")
with Sprott by six months from 31 December 2019 to 30 June 2020. The
New Loan may be repaid, at the Company's request and with the agreement
of Sprott (the "Extension Option") in equal monthly instalments
commencing 30 September 2018 with a final payment due 22 months later on
30 June 2020. If the Extension Option is not exercised the New Loan must
be repaid in full on 30 September 2018. Notwithstanding the above, both
the New Loan and the Existing Loan may be repaid by Serabi in full
without penalty at any time.
On 23 March 2018 the Company entered into a Subscription Agreement with
Greenstone resources II LP ("Greenstone"), Greenstone has conditionally
agreed to subscribe ("the Subscription") for 297,759,419 New Ordinary
Shares ("the Subscription Shares") at a price of 3.6 pence per share
(the "Subscription Price"). The New Ordinary Shares to be issued
pursuant to the Subscription will rank pari passu with the existing
Ordinary Shares. Application will be made to the London Stock Exchange
for the Subscription Shares to be admitted to trading on AIM
("Admission") and listed for trading on the TSX. Completion of the
Subscription and Admission is expected to take place at 8:00 a.m. on or
around 12 April 2018.
With these exceptions 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.
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
March 29, 2018 02:00 ET (06:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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