REG-Serabi Gold plc : Strong fourth quarter production to close the year <Origin Href="QuoteRef">SRB.L</Origin>

Serabi GoldAnnouncement

18/01/2018 07:05

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For immediate release
            18 January 2018

Serabi Gold plc
("Serabi" or the "Company")

Strong fourth quarter production to close the year

Serabi Gold plc (AIM:SRB, TSX:SBI), the Brazilian focused gold mining and
development company, is pleased to report its fourth and final quarter
production of 9,337 ounces of gold at its Palito/Sao Chico high grade gold
operation in the Tapajos region of Para State, Northern Brazil. 

HIGHLIGHTS
* The acquisition of Chapleau Resources Ltd and its wholly owned 370,000 ounce
Coringa gold deposit.  
 * Commencement of an initial 8,000 metre surface drill programme at Palito in
December 2017.
* Fourth quarter production of 9,337 ounces of gold.
* Total gold production for 2017 of 37,004 ounces.   
* Mine production totalling 49,011 tonnes at 8.25 grammes per tonne ("g/t") of
gold.  
* 43,345 tonnes processed through the plant for the combined mining
operations, with an average grade of 7.27 g/t of gold.
 * 2,762 metres of horizontal mine development completed in the fourth
quarter. 
* 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.   Production is coming from levels 100mRL and 86mRL with levels
70mRL, 56mRL, 40mRL, 26mRL and 10mRL all either developed or in development,
nicely ahead of production. 
* By the end of the year, surface ore stocks were approximately 15,000 tonnes,
(September 2017: 15,000 tonnes) with an average grade of 3.0 g/t of gold,
together with approximately 40,000 tonnes of flotation tailings grading
approximately 3.0 g/t gold.
Mike Hodgson, CEO, said:

"I think it is fair to say we have enjoyed an exciting end to the year.  The
acquisition of Coringa has been the highlight of the fourth quarter, this
being an asset we had been keen to acquire for some time and one that, I feel,
will serve the Company well and bring great value over the coming years.  
Our day-to-day business is gold production, and I am also very pleased to
report a very good final quarter, with over 9,300 ounces of gold produced. 

"Overall I am delighted with the Company's performance over the second half of
the year.  Total gold production for the year of 37,000 ounces compares with
our initial guidance at the start of 2017 of 40,000 ounces.  Approximately
2,000 ounces of this shortfall arose during the second quarter from short term
operational problems, now fully resolved, commissioning new underground
fleet.  Since then, we have seen two strong quarters, with the mine running
well and the plant at capacity.  We remain mill constrained as the static
stockpile levels illustrate and the reported operational statistics for both
the third and fourth quarters could not, realistically, have been improved by
much. I am, therefore, more than happy with the recent performance and the
year end results. 

 "The fourth quarter saw mine production from both the Palito and Sao Chico
orebodies performing well. Average grades were maintained at over 8.0 g/t, and
on-going mine development is progressing as planned.  I am particularly
pleased with how the Sao Chico orebody is shaping up, with the payability of
ore development seemingly improving with depth.

 "At the Palito orebody, seven veins out of the 25 veins that comprise the
total geological resource are now in various stages of development and
production.  The Pipocas, G3, and Senna veins remain the backbone of our
sources of ore, with smaller contributions from the newly developed Jatoba,
Mogno, Zonta and G1 veins. 

"In the plant, the performance during the quarter was as good as we can
reasonably expect.  The plant is at full capacity and continues to perform
excellently.  With approximately 43,300 tonnes of run of mine ore ("ROM")
milled this represents a 7.5 per cent improvement on the same quarter in
2016.  As I have mentioned in previous reports,  the existence of a 15,000
tonne coarse ore stockpile and a further 40,000 tonnes of stockpiled flotation
tails (with an average grade of around 3g/t of gold) on surface, is both a
source of comfort and frustration.    

"During 2018, we will have in place an additional independent conveyor to feed
the flotation tails directly into the ball mills, allowing this material to be
added directly to the current dry mill feed, and increasing the tonnage of
this material that can be treated each month.  We hope this operational
improvement can be commissioned by the end of January.    

"As reported last quarter, the results of our ore sorting test-work on the
Palito ore have been excellent and we plan to introduce this to the production
flowsheet during 2018.  We mine the veins at Palito as selectively as
possible, with head grades in excess of 8.0 g/t gold as evidence of this, but
the grade of the ore feed entering the plant can be further improved using an
ore sorter without compromising ounces.  The ore sorter can eliminate
significant volumes of waste material that are unavoidably in the ore feed,
and consume plant capacity and energy.  Regrettably, with the lead time
involved, we will not see any real impact until late 2018 at best, but having
had a surface coarse-ore stockpile of between 15,000 tonnes and 25,000 tonnes
since operations commenced, one can see the operation will otherwise always be
plant constrained.    Payback of the estimated US$1.2 million cost is
expected to be less than 12 months.

"In December, we saw the long awaited start of a surface exploration drill
programme.  The purpose of the programme is to drill some of the many
potential vein extensions identified at Palito.  The initial programme is for
approximately 8,000 metres but I hope that over the course of the year we will
be able to undertake further drilling, including, in particular, a programme
at Sao Chico.  The Palito orebody hosts a resource that extends over a one
kilometre strike length, but sits within a trend and there are now clearly
indications that have allowed the veins and their mineralisation to be traced
over approximately four kilometres.  The continuity, grade and payability of
the ore in these veins still needs to be established, but only drilling will
determine this.  The Sao Chico orebody is completely open along strike with
very little information outside the immediate mine limits.  Again there are
strong indications that substantial strike extensions of the principal vein
and adjacent veins are waiting to be defined.

"Ultimately, we have plans that would involve a much more ambitious drilling
programme targeting up to two million ounces of total mineral resource across
the two ore-zones, with the full programme, totalling 60,000 meters, to be
completed in two phases.  This initial 8,000 metres forms part of phase one
and is a programme we can start comfortably and commit to out of operational
cash flow.  I will be providing further updates on this programme, as results
are generated, during the first quarter of 2018.  

"A concern voiced by many investors about junior gold production companies is
their ability to consistently, month after month, deliver on production. 
Serabi has now since the start of 2016 enjoyed eight quarters of regular
production and averaged over 9,500 ounces of gold per quarter over this
period, which I feel clearly demonstrates our ability to deliver consistency
and stability.     

"The acquisition of Coringa, it's permitting and development over the
forthcoming period along with successful exploration results in 2018 will, we
hope, form the basis of significant expansion of gold production for Serabi,
as we seek to establish ourselves as a significant gold producer in Brazil
with a target of an annualised production rate of 100,000 ounces within the
next two years."

Results

Total production for the fourth quarter of 2017 was 9,337 ounces of gold,
generated from the processing of 43,345 tonnes of ore at overall average
grades of 7.27 g/t of 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 49,011 tonnes
with a grade of 8.25 g/t of gold.   

At 31 December 2017, there were coarse ore stocks of approximately 15,000
tonnes of ore with an average grade of 3.0 g/t of gold, and approximately
40,000 tonnes of flotation tails with an average grade of 3.0 g/t of gold.
These stockpiles are being consumed, albeit not as quickly as forecast, and
for now the operation remains plant constrained. 

A total of 2,762 metres of horizontal development has been completed during
the quarter, of which approximately 1,410 metres was ore development.  The
balance is the ramp, cross cuts and stope preparation development. 

2018 Production 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. 

Key Operational Information

                                                                             SUMMARY PRODUCTION STATISTICS FOR THE FOUR QUARTERS TO 31 DECEMBER 2017                 
                                                           Qtr 1       Qtr 2    Qtr 3    Qtr 4   Year to Date   Qtr 1    Qtr 2    Qtr 3    Qtr 4    Total            
                                                  2017         2017     2017     2017     2017       2016        2016     2016     2016     2016            
 Horizontal development - Total  Metres                    2,251       1,855    2,996    2,762       9,864      2,925    2,941    2,649    2,694    11,209           
                                                                                                                                                                     
 Mined ore - Total               Tonnes                    36,918      41,684   41,263   49,011     168,876     37,546   33,606   43,133   44,579  158,864           
                                 Gold grade (g/t)          10.12        7.80     9.80     8.25       8.92       11.02     9.56     9.61     8.94     9.74            
                                                                                                                                                                     
 Milled ore                      Tonnes                    41,722      43,294   44,205   43,345     172,565     36,615   39,402   42,464   40,485  158,966           
                                 Gold grade (g/t)           7.62        6.29     7.28     7.27       7.11        8.58     8.17     8.08     7.60     8.11            
 Gold production ((1) (2))       Ounces                    9,861       8,148    9,657    9,337      37,004      9,771    9,896    10,310   9,413    39,390           
1. Gold production figures are subject to amendment pending final agreed
assays of the gold content of the copper/gold concentrate and gold doré that
is delivered to the refineries. 
2. Gold production totals for 2017 include treatment of 4,568 tonnes of
flotation tails  at a grade of 3.97 g/t (2016 full year : 16,716 tonnes) 
3. The table may not sum due to rounding.
This announcement is inside information for the purposes of Article 7 of
Regulation 596/2014.

The person who arranged for the release of this announcement on behalf of the
Company was Clive Line, Director.

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    
 Chris Burrows                                                     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 grammes 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