TIDMSRB
For immediate release
14 June 2019
Serabi Gold plc
("Serabi" or the "Company")
AGM Statement
Serabi Gold plc (AIM:SRB, TSX:SBI), the Brazilian focused gold mining
and development company, advises that at 3:30 pm today (UK time), it
will be holding its Annual General Meeting.
The following is the text of the statement that will be made by Mr. Mike
Hodgson, the Chief Executive of the Company. Highlights of the
statement are:
-- Gold production is on budget and the Company remains on target to
achieving its full year guidance of approximately 40,000 to 44,000 ounces
of gold.
-- Exploration results generated during 2018 have been extremely exciting
with significant potential to grow the mineral resource especially in the
vicinity of the current Sao Chico ore body.
-- Initial results from a new Preliminary Economic Assessment for the
Coringa project are expected to be issued during the early part of the
third quarter of 2019 and will reflect the 37% increase in mineral
resource.
"2018 was a very satisfying year for Serabi. Our Palito/Sao Chico
Tapajos operation continued to perform extremely well, with excellent
grades, and total annual gold production exceeding that for 2017. At
Coringa, we have made very pleasing progress with the permitting of this
project and the award of a trial mining license and following the year
end, we issued a new geological resource report showing a 37 per cent
increase in the total gold resource. Across all of our tenements, the
year also saw the long overdue return of our exploration activity.
"As I commented in the Company's operational update for the first
quarter of 2019, we are continuing to maintain very good levels of gold
production from our current Tapajos operations. Gold production for both
the final quarter of 2018 and the first quarter of 2019 both exceeded
10,000 ounces, the first time we have achieved two successive 10,000
ounce quarters and, as of today, the second quarter of 2019 looks to be
at similar levels. So, as we approach the middle of the year, we
remain very much on course to achieving our full year guidance of
between 40,000 to 44,000 ounces of gold.
"Mining and development on both orebodies is continuing as planned, and
in the Sao Chico orebody, the lowest level now being developed is the
-33mRL level, which is 280 vertical metres from surface. With
underground drilling continuing at depth, the main vein has been
intersected as deep as the -100mRL level. In the Palito orebody, seven
of the 25 veins that comprise the mineral resource and reserve are now
being worked across various levels, bringing flexibility as we mine
upper levels as well as lower ones. The development of veins on upper
levels such as the Mogno, Sena and Ipe veins, has meant that we have
been able to minimize the need for any significant mine deepening during
the past 18 months.
"2018 saw a substantial increase in exploration activity. With respect
to mine-site exploration, this focused principally on step out surface
drilling campaign mostly conducted at Sao Chico. This drilling was to
test the strike extension of the Sao Chico orebody to the east and west
and was very successful. Mineralisation with mineable widths and grades
of what seems to be a continuation of the main Sao Chico orebody was
traced for approximately 300 metres to the west. Similarly drilling to
the east of the deposit intersected ore grades up to 100 metres east of
the current mine development. These two extensions will now be followed
up with closer spaced infill drilling, most probably conducted from
underground. Drilling success was, however, not limited to Sao Chico,
as surface step out drilling was also undertaken on the G3 vein at
Palito. G3 has been and remains the most significant vein at Palito and
the drilling indicates it extends with mineable widths and grades for at
least a further 300 meters to the north and 200 metres to the south of
the current mine workings.
"The gold process plant continues to perform very well, and as our
operations are currently constrained by the capacity of the plant, high
plant availability is critical. One of the main reasons we have been
able to plan for an increase in annual gold production for 2019 of
approximately 15% is as a result of plant optimisation. Part of this
planned production improvement also results from a legacy of the
start-up of gold production from the Palito ore body in 2014, when the
CIP part of the process plant had not yet become operational. This
resulted in the accumulation of a stockpile of tailings from the initial
flotation process which still contained relatively high gold grades
(3g/t and higher). In late 2018 we took delivery of a scrubbing plant
which is now allowing these flotation tails to be re-introduced directly
into the cyanidation circuit of the process plant. I am hopeful that
this will contribute production of between 3,000 - 4,000 ounces during
2019.
"Other modifications in the plant have included the construction of a
new detoxification plant, improvements to the crushing circuit and the
purchase of an ore sorting unit. The ore-sorter will separate out
crushed waste rock from crushed ore, and is equipped to sort both
optically and using X-Ray scanning. By eliminating waste material and
therefore increasing average plant throughput grade it has the effect of
lowering unit production costs, but also liberates essential plant
capacity. We will be installing, commissioning and optimising the
ore-sorter during 2019 and therefore do not expect much impact on
production this year, but look forward to the benefits in 2020.
"The successful raising of new equity in April 2018, as well as allowing
the Company to 'progress a number of capital projects and advance the
Coringa project, provided the financial base to restart exploration
which had been on hold since 2012. The highlight of the exploration
programme was the Airborne Magnetic and Electromagnetic geophysical
survey that the Company conducted over approximately 20,000 hectares of
our tenements. This has resulted in us now having the entire Jardin do
Ouro property covered by airborne surveys which, collectively, have
identified multiple anomalies with some very significant ones being
identified from the most recent survey.
"The most stand out feature is an extremely pronounced magnetic high
that runs east west across the tenements. This is a regional feature
and we see many of the electromagnetic anomalies lying on the flanks of
this magnetic high. In addition, the survey identified the smaller but
nonetheless very exciting anomaly named the 'Cinderella shear' which is
located traversing the Sao Chico mining license area in a south west to
north east trend. In the airborne survey this was highlighted as an
eight kilometre long magnetic and electromagnetic high.
"Our exploration team have now also conducted a terrestrial Induced
Polarisation ("IP") ground geophysics survey over the Cinderella shear,
and identified a very coincidental, seven kilometre long chargeability
'high' anomaly. As a result, the Cinderella shear has become an area of
significant interest to us.
"We also undertook IP surveys to the west of the Sao Chico deposit,
covering the strike projection of the mineralisation which is also an
area overlaid with significant artisanal surface workings. The results
were excellent, with the three key anomalous areas were identified. We
are now undertaking soil geochemistry sampling over these anomalies, to
hopefully provide better targeting for a surface drilling programme
which we will hope to undertake later in the year.
"The other main highlight of 2018 and the early part of this year was
the continued advancement and permitting of our Coringa project. After
a successful drilling campaign during 2018, a new NI 43-101 compliant
geological resource was published in March 2019. This work has resulted
in a 37% increase in the total geological resources which now total
approximately 500,000 ounces of gold, with an average grade of over 7
g/t. We are following this up with a new Preliminary Economic
Assessment ("PEA"), the results of which I expect to be issued during
the early part of the third quarter of 2019. During 2018 we were
awarded a Trial Mining License, and this has allowed us to prepare the
portal area in readiness to commence the decline to access the Serra ore
zone at Coringa. The Environmental Impact Study ("EIA") was also
approved by the State environmental authority, SEMAS, in the latter part
of 2018, and is a key step to the award of the Preliminary License
("LP"). However, the Brumadinho tailings dam collapse in early 2019 has
led to concerns amongst the general public regarding conventional
tailings dams and resulted in us re-considering our plans for tailings
management at Coringa. During 2018, we had already undertaken
significant studies into the cost and benefits of introducing filtering
and dry stacking of tailings at Palito. Whilst we determined that this
change in the management of tailings was not necessary at Palito, we did
accumulate significant knowledge and understanding of the technology.
As a result, we have been able to prepare a plan to replace the planned
conventional tailings facility at Coringa with the use of filtration and
dry stacking of tails thereby eradicating the need for a tailings dam
and are in the process of submitting an amendment to the Coringa EIA,
reflecting this change. We believe that this approach should alleviate
any safety concerns and expedite permitting, and I hope that we can be
in receipt of the LP before the end of 2019.
"Before leaving the subject of tailings, another use of funds from the
April 2018 capital raise included substantial remediation of our
tailings management facility (TMF) at Palito. We spent much of the year
buttressing the two main tailings ponds, under the guidance and
supervision of our certified Brazilian tailings consultant, and by
September this work was completed and approved by the authorities. We
also successfully submitted a new tailings management plan to the state
environmental agency which was accepted, which now means we have long
term tailings storage capacity until 2027.
"The gold price has clearly been favourable over recent months and
particularly when looked at in Brazilian Reals where it is at its
highest levels for many years. With the Company's cost base mostly
denominated in Reals, this is a good time to be a gold producer in
Brazil.
"With the operation in very much in regime, we are maintaining gold
grades of over7 g/t gold, and with the production form the flotation
tailings 'topping up' our monthly run of mine production, we are hoping
to build up our cash position further ahead of making the final
acquisition payment for the Coringa project due at the end of this year.
"Our near-term ambition remains to grow the business to become a 100,000
ounce per annum producer within two years. We have tremendous organic
growth potential especially around Sao Chico and if exploration success
can be turned into production ounces, this will of course greatly help
in bringing about that expansion in the quickest and most cost-effective
manner. With a 37% improvement in the recently published updated
geological resource at Coringa, we anticipate the forthcoming PEA will
report improved project economics, on the back of which we will be
actively seeking to put in place an attractive financing package for the
project. I firmly believe that with our organic growth accompanied by
permitting success at Coringa and the development of that project,
Serabi will benefit from having greater critical mass and being able to
attract wider investor support.
"Before closing I would like to acknowledge, again, the support, long
term loyalty and commitment of our major shareholders, Fratelli
Investments and Greenstone Resources. Finally, I would like to thank
our other new and existing shareholders, along with our management team
and our workforce in Brazil."
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 9000
James Bavister Tel: +44 (0)20 7418 9000
GLOSSARY OF TERMS
The following is a glossary of technical terms:
Note: Mineral resources and reserves were estimated in conformity with
the widely accepted CIM Estimation of Mineral Resource and Mineral
Reserves Best Practices Guidelines (the "Guidelines") and are reported
in accordance with the Canadian Securities Administrators' National
Instrument 43-101" and the definitions applicable to individual
categories of reserves and resources are set out in the Guidelines. The
Glossary below includes only a summary of these definitions and readers
can access the full definitions at
https://www.globenewswire.com/Tracker?data=TpAYuLB-l8dtdDQlI0eASHWCChaUDzEylP90lHm82q14c1dnerpIljsZDLLFh_I67MJXBFH7ajOE5xIceVErLbiJ2yP5SEcFUkmp9o_KBW8FCVHIGOZQeq-zOp5J-n_OHY8_RqSsoCPg9v6bywuv--eyMff7cpWTBti_UidddKlaKqgd9lfWRDDb93FSNOL2UUY6vFjpJm179UP4h0HLdQ==
http://web.cim.org/standards/menupage.cfm?sections=177&menu=178.
"Au" means gold.
"CIM" means Canadian Institute of Mining, Metallurgy and Petroleum.
"development" - excavations used to establish access to the mineralised
rock and other workings.
"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.
"Indicated Mineral Resource" is that part of a Mineral Resource for
which quantity, grade or quality, densities, shape and physical
characteristics can be estimated with a level of confidence sufficient
to allow the appropriate application of technical and economic
parameters, to support mine planning and evaluation of the economic
viability of the deposit. The estimate is based on detailed and reliable
exploration and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings and
drill holes that are spaced closely enough for geological and grade
continuity to be reasonably assumed.
"Inferred Mineral Resource" is that part of a Mineral Resource for which
quantity and grade or quality can be estimated on the basis of
geological evidence and limited sampling and reasonably assumed, but not
verified, geological and grade continuity. The estimate is based on
limited information and sampling gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings and drill
holes.
"Measured Mineral Resource" is that part of a Mineral Resource for which
quantity, grade or quality, densities, shape, and physical
characteristics are so well established that they can be estimated with
confidence sufficient to allow the appropriate application of technical
and economic parameters, to support production planning and evaluation
of the economic viability of the deposit. The estimate is based on
detailed and reliable exploration, sampling and testing information
gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are spaced closely enough
to confirm both geological and grade continuity.
"Mineral Resource" is a concentration or occurrence of diamonds, natural
solid inorganic material, or natural solid fossilized organic material
including base and precious metals, coal, and industrial minerals in or
on the Earth's crust in such form and quantity and of such a grade or
quality that it has reasonable prospects for economic extraction. The
location, quantity, grade, geological characteristics and continuity of
a Mineral Resource are known, estimated or interpreted from specific
geological evidence and knowledge.
"Mineral Reserve" is the economically mineable part of a Measured or
Indicated Mineral Resource demonstrated by at least a Preliminary
Feasibility Study. This Study must include adequate information on
mining, processing, metallurgical, economic and other relevant factors
that demonstrate, at the time of reporting, that economic extraction can
be justified. A Mineral Reserve includes diluting materials and
allowances for losses that may occur when the material is mined.
"Probable Mineral Reserve" is the economically mineable part of an
Indicated and, in some circumstances, a Measured Mineral Resource
demonstrated by at least a Preliminary Feasibility Study. This Study
must include adequate information on mining, processing, metallurgical,
economic, and other relevant factors that demonstrate, at the time of
reporting, that economic extraction can be justified.
"Proven Mineral Reserve" is the economically mineable part of a Measured
Mineral Resource. A Proven Mineral Reserve implies a high degree of
confidence in the Modifying Factors.
"t" means tonnes
"Vein" is a generic term to describe an occurrence of mineralised rock
within an area of non-mineralised rock.
(END) Dow Jones Newswires
June 14, 2019 10:00 ET (14:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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