REG-Serabi Gold plc - First quarter update on gold operations at Palito and Sao Chico <Origin Href="QuoteRef">SRB.L</Origin>

Serabi GoldAnnouncement

20/04/2016 07:05

For immediate release 
               20 April 2016 
 
 Serabi Gold plc 
 ("Serabi" or the "Company") 
 
 First quarter update on gold operations at Palito and Sao Chico 
 
 Serabi Gold plc (AIM:SRB, TSX:SBI), the Brazilian focused gold mining and
development company, provides an operational update for the first quarter of
2016 on its wholly owned Palito and Sao Chico gold operations in the Tapajos
region of Para State, Northern Brazil.  
 
 HIGHLIGHTS 
 
 * 9,771 ounces of gold produced for the first quarter of 2016 (Q4 2015 -
7,924 ounces).   
 * Mine production totalled 37,546 tonnes. 
 *  26,752 tonnes at a grade of 11.84 grammes per tonne (g/t) of gold from
Palito. 
 *  10,794 tonnes at 9.00 g/t of gold from Sao Chico.   
 
 
 * 36,615 tonnes of ore processed through the plant for the combined mining
operations. 
 
 
 * 2,926 metres of horizontal mine development completed in the quarter with
1,901 metres completed at Palito and 1,025 metres at Sao Chico. 
 * Installation of the third ball mill is almost complete, along with the
second flotation line and enhancements in the carbon in pulp ("CIP") plant. 
The works are on schedule to be complete by the beginning of May.  A carbon
regeneration kiln is also being acquired which will assist in enhancing gold
recoveries once the kiln is operational in the second half of the year. 
 * Sao Chico now being developed on the 171mRL, 156mRL and 141mRL, with
production ore being mined from the 186mRL level. The ramp continues to be
deepened to the 126mRL, the next planned development level, and will continue
this year to the 96mRL to accommodate underground drilling of the Sao Chico
deposit extension at depth. 
 * At the end of the first quarter, the combined surface stockpiles at Palito
and Sao Chico totalled 17,000 tonnes at a grade of 5.3 g/t of gold. 
 
 
 The following link can be used to access an interview with Mike Hodgson, CEO
discussing the first quarter operational results 
 
 http://brrmedia.co.uk/event/141788?popup=true 
 
 Mike Hodgson, CEO said: 
 
 "The first quarter of 2016 has been very satisfying, building on the
Company's strong finish to 2015.  This has been the best quarter to date in
terms of both ore production from the mines and the volume of ore processed
through the plant.   
 
 "The first quarter, which coincides with the height of the rainy season, was
always going to be our most challenging as we did not have the benefit of the
plant expansion. Nonetheless we have got very close to breaking the 10,000
ounce per quarter threshold which is an excellent result and comfortably
in-line with our guidance of 37,000 ounces for the year as a whole. 
 
 "As I observed at the end of the last quarter, with Palito now very much in
regime, new sectors are being opened up and this always creates options and
flexibility, an essential part of any underground mining operation.  Mined
grades achieved for the quarter continued to be around 10 g/t of gold which
has been the case for the past two years, and serves to illustrate the focus
on quality that we employ through our selective mining approach.  
 
 "The lateral expansion of the Palito Mine, completed at the end of 2015, has
opened up the Senna and Chico da Santa sectors.  Senna especially is
returning some very encouraging mineable grades to date.  Underground diamond
drilling is being used to evaluate numerous known, but underexplored veins and
together with these two new sectors, we hope to open up numerous new mining
faces in the upper levels. These have the advantage of being in close
proximity to existing mine infrastructure and will not require any new ramp
development. 
 
 "At Sao Chico, ore development and production is now ongoing on a number of
levels notably the 186mRL, 171mRL, 156mRL and now 141mRL.  As explained last
quarter, the vein is a 1.5 metre to 4.0 metre wide alteration zone, which
itself is structurally continuous.  However, the gold grades within this
alteration zone are quite erratic and are hosted in four steeply plunging
pay-shoots.  In these pay-shoots, the grades are often truly spectacular,
very often being in excess of 100 g/t of gold.  Outside the pay-shoots the
vein is continuous but with low gold grades and as a result it is unavoidable
that, as the mine development passes between the pay- shoots, lower grade ore
has to be mined.  The central pay-shoot is the most established of these four
high grade shoots, and is some 100 metres long.  We have, and will continue
to focus in the near-term, on developing this part of the Main Vein, and are
now enjoying some consistent higher grade development ore as a result.  We
will not lose access to the other pay-shoots along strike, and these will be
developed later in the year. 
 
  "As reported last quarter, the plant is being further expanded to allow the
processing of significant surface ore stockpiles.  The stockpiles have been
accumulated as a result of the overall limitations in the capacity of the gold
processing plant.  The planned improvements are all expected to be completed
and operational by 1 May 2016, as originally scheduled.  Following their
completion we anticipate that plant processing capacity could be increased
from the current levels of throughput of 380-400 tonnes per day (tpd) to over
500 tpd.  This will be in excess of mine production levels, allowing the
stockpiles to be depleted and, importantly for the longer term, also creating
surplus capacity to catch up any lost production caused by unplanned
stoppages." 
 
 Results 
 
 Total production for the first quarter of 2016 was 9,771 ounces (1) 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 first quarter came from the processing of 36,615
tonnes of hard rock ROM ore from the Palito and Sao Chico Mines with an
average grade of 8.58 g/t of gold.  The total mined ore for the same period
was 35,610 tonnes with an average grade of 9.52 g/t of gold.  In addition to
the ROM ore, an additional 4,699 tonnes of flotation tailings with a grade of
2.90 g/t of gold was processed through the cyanidation plant. 
 
 At 31 March 2016, there were coarse ore stocks of approximately 17,000 tonnes
with an average grade of 5.3 g/t of gold, and approximately 31,000 tonnes of
flotation tails with an average grade of 2.5 g/t of gold. The current plant
expansion, scheduled for completion by 1 May 2016 this year, is expected to
provide sufficient incremental capacity to process most of this stockpiled
material during the remainder of 2016.      
 
 Approximately 1,900 metres of horizontal development has been completed
during the quarter at the Palito Mine, of which 1,064 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 1,025 metres of horizontal development was
completed, of which 447 metres represented ore development, with much of the
balance being ramp development and cross cuts reflecting the on-going
deepening of the mine.     
 
 The Sao Chico Mine returned its best quarterly results to date, with over
8,800 tonnes of ore, at a grade of 9.61 g/t of gold, being extracted.  Most
of this ore is being generated from development mining, and this will remain
the case until the second half of the year.  
 
 2016 Guidance 
 
 The Company expects to produce 28,000 ounces of gold during 2016 from the
processing of Palito ROM and the Palito stockpiles.  With the Sao Chico Mine
now under development, the Company also anticipates production of 9,000 ounces
of gold from ore mined at Sao Chico, and as a result, remains confident of
achieving its production forecast of 37,000 ounces of gold for the year with
an All-In Sustaining Cost of between US$840 to US$870 per ounce. 
 
   SUMMARY PRODUCTION STATISTICS FOR THE QUARTER ENDED 31 MARCH 2016 (Palito & Sao Chico)                      
                                                                         Quarter 1 2016    Quarter 1 2015   
  Horizontal development - Palito       Metres                                  1,900             1,825       
  Horizontal development - Sao Chico    Metres                                  1,025              n/a        
  Horizontal development - Total        Metres                                  2,925             1,825       
                                                                                                          
  Mined ore - Palito                    Tonnes                                 26,752            32,504       
                                       Gold grade (g/t)                        11.84             10.51       
  Mined ore - Sao Chico                 Tonnes                                 10,794              n/a        
                                       Gold grade (g/t)                        9.00               n/a        
  Mined ore - Total                     Tonnes                                 37,546            32,504       
                                       Gold grade (g/t)                        11.02             10.51       
                                                                                                          
  Milled ore                            Tonnes                                 36,615            30,384       
                                       Gold grade (g/t)                        8.58              8.52        
                                                                                                          
  Gold production (1) (2)               Ounces                                  9,771             7,389       
 
 2 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. 4 Gold production totals
for 2016 include treatment of 4,699 tonnes of flotation tails 
 
 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 9000     
  Ross Allister                                                       Tel: +44 (0)20 7418 9000     
                                                                                                 
  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 OMX Corporate Solutions on behalf
of NASDAQ OMX 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 
 HUG#2004919