TIDMSRB
Unaudited interim results for the three and nine month periods
ended 30 September 2023
Serabi (AIM:SRB, TSX:SBI), the Brazilian focused gold mining and
development company, today releases its unaudited results for the
three and nine month periods ended 30 September 2023.
A copy of the full interim statements together with commentary
can be accessed on the Company's website using the following link:
https://bit.ly/47wRleY
"This has been another excellent quarter for Serabi as we seek
to deliver consistent production and drive growth in the business"
said Clive Line, Serabi's CFO. "Strong quarter on quarter
production is supporting improving financials with EBITDA growing
to US$8.79 million and continued growth of pre tax profits. Cash
balances have grown to US$15.4 million (US$14.7 million net of cash
held under the Vale Exploration Alliance) compared to US$7.2
million as at 31 December 2022, with net cash attributable to the
Group increasing by US$2.4 million in the third quarter.
"With the very recent news of a threefold increase in mineral
reserves at the Palito Complex confirming the continued longevity
of the mine, and on-going development of Coringa being funded from
cash flow, the first nine months have been very rewarding and we
look forward with optimism."
Financial Highlights
-- Gold production for the third quarter of 8,738 ounces (2022: 8,541
ounces) for total production for the year to date of 25,262 ounces (2022:
24,021 ounces).
-- Cash held at 30 September 2023 of US$15.4 million (31 December 2022:
US$7.2 million).
-- EBITDA for the nine-month period of US$8.79 million (2022: US$5.9
million).
-- Post tax profit for the nine month period of US$4.62 million (2022: loss
US$0.9 million),
-- Profit per share of 6.10 cents compared with a loss per share of 1.15
cents for the same nine month period of 2022.
-- Net cash inflow from operations for the nine-month period (after mine
development expenditure of US$2.6 million) of US$10.7 million (2022:
US$0.01 million inflow).
-- Average gold price of US$1,940 per ounce received on gold sales during
the nine month period (2022: US$1,810).
-- Cash Cost for the nine-month period to 30 September 2023 of US$1,253 per
ounce (nine months 2022 : US$1,353 per ounce) representing an seven
percent improvement compared to the same period of 2022.
-- All-In Sustaining Cost for the nine-month period to 30 September 2023 of
US$1,553 per ounce (nine months 2022 : US$1,662 per ounce) represents a
seven percent improvement compared to the same period of 2022.
Key Financial Information
SUMMARY FINANCIAL STATISTICS
------------------------------------------------------------------------------------------------
9 months to 9 months to 3 months to 3 months to
30 September 2023 30 September 2022 30 September 2023 30 September 2022
US$ US$ US$ US$
---------------- ------------------ ------------------ ------------------ ------------------
Revenue 47,897,264 44,388,304 17,373,682 13,187,441
Cost of sales (34,405,882) (34,078,338) (13,341,448) (10,809,753)
Gross operating
profit 13,491,382 10,309,966 4,032,234 2,377,688
Administration
and share based
payments (4,702,467) (4,443,642) (1,864,200) (1,676,866)
EBITDA 8,788,915 5,866,324 2,168,034 700,822
Depreciation and
amortisation
charges (3,409,994) (4,596,838) (1,384,957) (1,673,593)
Operating profit
before finance
and tax 5,378,921 1,269,486 783,077 (972,771)
------------------ ------------------ ------------------ ------------------
Profit after tax 4,620,779 (870,520) (359,112) (2,943,459)
------------------ ------------------ ------------------ ------------------
Earnings per
ordinary share
(basic) 6.10c (1.15c) (0.47c) (3.89c)
------------------ ------------------ ------------------ ------------------
Average gold US$1,940 US$1,810 US$1,930 US$1,720
price received
(US$/oz)
------------------ ------------------ ------------------ ------------------
As at
30 September As at
2023 31 December 2022
US$ US$
(unaudited) (audited)
-------------------------- ------------- -----------------
Cash and cash equivalents 15,352,099 7,196,313
Net assets 88,032,963 81,523,603
Cash Cost and
All-In
Sustaining Cost
("AISC")
----------------
9 months to 9 months to 30 September 12 months to 31
30 September 2022 December 2022
2023
---------------- ------------- ------------------------ -----------------
Gold production 25,262 ozs 24,021 ozs 31,819 ozs
for cash cost
and AISC
purposes
------------- ------------------------ -----------------
Total Cash Cost US$1,253 US$1,353 US$1,322
of production
(per ounce)
------------- ------------------------ -----------------
Total AISC of US$1,553 US$1,662 US$1,615
production (per
ounce)
------------- ------------------------ -----------------
Overview of the financial results
An improved level of gold production in the third quarter of the
year of 8,738 ounces, a 9% increase on the first quarter and a 3%
increase on the second quarter, has resulted in total production
for the year to date of 25,262 ounces representing a 5% increase
over the same period in 2022 (2022: 24,021 ounces). As a result,
Serabi remains on track to meet its full year guidance of 33,500 to
35,000 ounces.
The cash balance at the end of September 2023 had increased to
US$15.35 million (Dec 2022: US$7.2 million). This does include
approximately US$0.60 million of funds held for the Vale
Exploration Alliance but nonetheless the net cash attributable to
the Group has increased by US$7.5 million during the first nine
months of the year.
Cash cost for the year to date is US$1,253 per ounce which
represents a small decrease compared to the half year when reported
cash costs were US$1,258 per ounce and a significant reduction
compared to the same nine month period of 2022 when a cash cost of
US$1,353 was reported. AISC for the year to date is US$1,553 per
ounce, which compares very favourably with the same nine month
period of 2022 when an AISC of US$1,662 was reported, particularly
given the levels of mine development incurred in the period,
particularly at Coringa, creating the opportunity for longer term
production growth. Capitalised mine development costs were US$2.6
million for the first nine months of 2023.
Gold sales for the first nine months of 2023 were 23,733 ounces,
with inventory levels remaining steady following the increase in
gold inventory experienced in the first quarter following the
commissioning of new tanks in the leaching circuit. Consistent with
the results for the first two quarters of 2023, amortisation costs
are lower in this quarter than previously, a consequence of the
reduced activity at Sao Chico and therefore minimal amortisation
costs associated with this project. In addition, because Coringa is
only in a trial mining phase and has not attained commercial
production, the project costs are not currently subject to
amortisation charges. In accordance with accounting regulations the
gold sales and related operating costs of Coringa are being
reflected in the Group's income statement.
On 10 May 2023, the Company announced that it had entered into
an exploration alliance with Vale SA focused on the Matilda
prospect and other large regional targets in the Tapajos region of
Para, Brazil. The current exploration activity under this alliance
is being funded in its entirety by Vale up to an initial US$5
million for the Phase 1 activities. However, Serabi is the operator
and undertaking the activity either directly or using contractors
where appropriate. Vale provides funding in advance to Serabi and
at the end of the quarter, Serabi held US$0.60 million of cash that
will be used to meet the accrued and future costs of the alliance
exploration activity. The exploration costs being incurred under
the alliance are not being capitalised but are being expensed
through the Income Statement as they are incurred. Similarly, the
funds being received from Vale are also being reported through the
Income Statement as other income.
During May 2023, the Group settled a US$5.0 million export
linked loan facility that had been advanced by Itau Bank BBA. The
Group still has a further US$5.0 million export linked facility
advanced by Santander Bank in Brazil which is due to be repaid in
February 2024 and carries a fixed interest rate of 7.97%.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK Domestic Law by virtue of the European Union (Withdrawal) Act
2018.
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 t +44 (0)20 7246 6830
Chief Executive m +44 (0)7799 473621
Clive Line t +44 (0)20 7246 6830
Finance Director m +44 (0)7710 151692
e contact@serabigold.com
https://www.globenewswire.com/Tracker?data=xvYlNDZqaqzAueWC6syzhWYtALPbHAinbbaxFxhf2eYzM2rNrfMpmjjdVJnncOCS28arY7ruLcwkUxHYQlAK7P6cDfCE_VgY1PqfB5KzZSs=
www.serabigold.com
BEAUMONT CORNISH Limited
Nominated Adviser & Financial Adviser
Roland Cornish / Michael Cornish t +44 (0)20 7628 3396
PEEL HUNT LLP
Joint UK Broker
Ross Allister t +44 (0)20 7418 9000
TAMESIS PARTNERS LLP
Joint UK Broker
Charlie Bendon/ Richard Greenfield t +44 (0)20 3882 2868
CAMARCO
Financial PR
Gordon Poole / Emily Hall t +44 (0)20 3757 4980
Copies of this announcement are available from the Company's
website at www.serabigold.com.
Forward-looking statements
Certain statements in this announcement are, or may be deemed to
be, forward looking statements. Forward looking statements are
identi ed 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 re ect 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.
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 35 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, recognizing 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.
Neither the Toronto Stock Exchange, nor any other securities
regulatory authority, has approved or disapproved of the contents
of this news release.
See
https://www.globenewswire.com/Tracker?data=xvYlNDZqaqzAueWC6syzhWYtALPbHAinbbaxFxhf2eZOokKMkIjZVBhNHdAjFjHmj4lqphtHDWRoTFZ2TEz0RgFLGzTVCP4PfSDbRU4Tx1E=
www.serabigold.com for more information and follow us on twitter
@Serabi_Gold
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 the unaudited
interim financial statements for the nine months to 30 September
2023.
For the three months ended For the nine months ended
30 September 30 September
2023 2022 2023 2022
(expressed in
US$) Notes (unaudited) (unaudited) (unaudited) (unaudited)
--------------- ----- ------------- ------------- ------------- ------------
CONTINUING
OPERATIONS
Revenue 17,373,682 13,187,441 47,897,264 44,388,304
Cost of sales (11,769,256) (9,808,516) (32,463,690) (33,077,101)
Provision for
state sales
taxes
receivable -- (1,001,237) -- (1,001,237)
Stock
impairment
provision -- -- (370,000) --
Depreciation
and
amortisation
charges (2,957,149) (1,673,593) (4,982,186) (4,596,838)
--------------- ----- ------------- ------------- ------------- ------------
Total cost of
sales (14,726,405) (12,483,346) (37,815,876) (38,675,176)
Gross profit 2,647,277 704,095 10,081,388 5,713,128
Administration
expenses (1,934,235) (1,654,689) (4,834,129) (4,250,706)
Share-based
payments (52,151) (65,195) (138,017) (279,117)
Gain on
disposal of
assets 122,186 43,018 269,679 86,181
--------------- ----- ------------- ------------- ------------- ------------
Operating
profit/(loss) 783,077 (972,771) 5,378,921 1,269,486
Other income --
exploration
receipts 2 1,992,344 -- 3,042,879 --
Other expenses
-- exploration
expenses 2 (1,856,520) -- (2,876,431) --
Foreign
exchange
(loss)/gain (43,421) (91,446) 56,645 47,659
Finance expense 3 (381,478) (1,710,056) (500,588) (1,776,581)
Finance income 3 199,792 115,966 703,823 268,590
--------------- ----- ------------- ------------- ------------- ------------
Profit/(loss)
before
taxation 693,794 (2,658,307) 5,805,249 (190,846)
Income tax
expense 3 (1,052,906) (285,152) (1,184,470) (679,674)
--------------- ----- ------------- ------------- ------------- ------------
(Loss)/profit
after
taxation (359,112) (2,943,459) 4,620,779 (870,520)
--------------- ----- ------------- ------------- ------------- ------------
Other
comprehensive
income (net of
tax)
Exchange
differences on
translating
foreign
operations (2,952,047) (1,827,939) 1,751,104 158,834
--------------- ----- ------------- ------------- ------------- ------------
Total
comprehensive
(loss)/profit
for the
period((1) (3,311,159) (4,771,398) 6,371,883 (711,686)
--------------- ----- ------------- ------------- ------------- ------------
(Loss)/profit
per ordinary
share (basic) 5 (0.47c) (3.89c) 6.10c (1.15c)
--------------- ----- ------------- ------------- ------------- ------------
(Loss)/profit
per ordinary
share
(diluted) 5 (0.47c) (3.89c) 6.10c (1.15c)
--------------- ----- ------------- ------------- ------------- ------------
(1) The Group has no non-controlling interest and all profits are attributable to the equity holders of the Parent Company
Balance Sheet as at 30 September 2023
As at As at As at
(expressed in 30 September 2023 30 September 2022 31 December 2022
US$) Notes (unaudited) (unaudited) (audited)
-------------- ------ ------------------ ------------------ -----------------
Non-current
assets
Deferred exploration
costs 19,775,603 12,236,052 18,621,180
Property, plant and
equipment 49,107,705 54,088,968 48,482,519
Right of use assets 5,214,315 5,134,677 5,374,042
Deferred taxes 1,520,710 914,859 3,446,032
Taxes receivable 3,891,201 3,173,123 1,545,684
----------------------- ------------------ ------------------ -----------------
Total non-current
assets 79,509,534 75,547,679 77,469,457
----------------------- ------------------ ------------------ -----------------
Current assets
Inventories 9,819,171 8,316,685 8,706,351
Trade and other
receivables 1,579,886 2,133,787 5,291,924
Derivative
financial
assets 197,864 -- --
Prepayments and accrued
income 1,750,470 1,871,869 1,572,149
Cash and cash
equivalents 15,352,099 10,177,647 7,196,313
----------------------- ------------------ ------------------ -----------------
Total current assets 28,699,490 22,499,988 22,766,737
----------------------- ------------------ ------------------ -----------------
Current
liabilities
Trade and other
payables 7,798,873 5,576,575 5,830,872
Interest bearing
liabilities 6,211,791 5,855,425 6,111,126
Accruals 593,435 431,126 461,857
------------------ ------------------ -----------------
Total current
liabilities 14,604,099 11,863,126 12,403,855
----------------------- ------------------ ------------------ -----------------
Net current assets 14,095,391 10,636,862 10,362,882
----------------------- ------------------ ------------------ -----------------
Total assets less
current liabilities 93,604,925 86,184,541 87,832,339
----------------------- ------------------ ------------------ -----------------
Non-current
liabilities
Trade and other
payables 3,884,102 463,323 3,800,886
Interest bearing
liabilities 304,262 1,200,297 837,293
Deferred tax liability 130,967 628,231 480,922
Long term
state tax -- 1,762,766 --
Provisions 1,252,631 2,676,992 1,190,175
-----------------
Total non-current
liabilities 5,571,962 6,731,609 6,309,276
----------------------- ------------------ ------------------ -----------------
Net assets 88,032,963 79,452,932 81,523,063
----------------------- ------------------ ------------------ -----------------
Equity
Share capital 11,213,618 11,213,618 11,213,618
Share premium reserve 36,158,068 36,158,068 36,158,068
Option reserve 116,246 1,354,465 1,324,558
Other reserves 16,167,780 14,463,647 14,459,255
Translation reserve (64,525,667) (68,489,336) (66,276,771)
Retained surplus 88,902,918 84,752,470 84,644,335
----------------------- ------------------ ------------------ -----------------
Equity shareholders'
funds 88,032,963 79,452,932 81,523,063
----------------------- ------------------ ------------------ -----------------
Statements of Changes in Shareholders' Equity
For the nine month period ended 30 September 2023
(expressed in US$)
Share Other
Share Share option reserves Translation Retained Total
(unaudited) capital premium reserve (1) reserve Earnings equity
------------------------------------------- ---------- ---------- ----------- ---------- ------------ ----------- ----------
Equity shareholders' funds at 31 December
2021 11,213,618 36,158,068 1,075,348 13,694,731 (68,648,170) 86,391,906 79,885,501
------------------------------------------- ---------- ---------- ----------- ---------- ------------ ----------- ----------
Foreign currency adjustments -- -- -- -- 158,834 -- 158,834
Profit for the period -- -- -- -- -- (870,520) (870,520)
------------------------------------------- ---------- ---------- ----------- ---------- ------------ ----------- ----------
Total comprehensive income for the period -- -- -- -- 158,834 (870,520) (711,686)
Transfer to taxation reserve -- -- -- 768,916 -- (768,916) --
Share incentives expense -- -- 279,117 -- -- -- 279,117
------------------------------------------- ---------- ---------- ----------- ---------- ------------ ----------- ----------
Equity shareholders' funds at 30 September
2022 11,213,618 36,158,068 1,354,465 14,463,647 (68,489,336) 84,752,470 79,452,932
------------------------------------------- ---------- ---------- ----------- ---------- ------------ ----------- ----------
Foreign currency adjustments -- -- -- -- 2,212,565 -- 2,212,565
Profit for the period -- -- -- -- -- (112,527) (112,527)
------------------------------------------- ---------- ---------- ----------- ---------- ------------ ----------- ----------
Total comprehensive income for the period -- -- -- -- 2,212,565 (112,527) 2,100,038
Transfer to taxation reserve -- -- -- (4,392) -- 4,392 --
Share incentives expense -- -- (29,907) -- -- -- (29,907)
------------------------------------------- ---------- ---------- ----------- ---------- ------------ ----------- ----------
Equity shareholders' funds at 31 December
2022 11,213,618 36,158,068 1,324,558 14,459,255 (66,276,771) 84,644,335 81,523,063
------------------------------------------- ---------- ---------- ----------- ---------- ------------ ----------- ----------
Foreign currency adjustments -- -- -- -- 1,751,104 -- 1,751,104
Profit for the period -- -- -- -- -- 4,620,779 4,620,779
------------------------------------------- ---------- ---------- ----------- ---------- ------------ ----------- ----------
Total comprehensive income for the period -- -- -- -- 1,751,104 4,620,779 6,371,883
Transfer to taxation reserve -- -- -- 1,708,525 -- (1,708,525) --
Share incentives lapsed -- -- (1,346,329) -- -- 1,346,329 --
Share incentives expense -- -- 138,017 -- -- -- 138,017
------------------------------------------- ---------- ---------- ----------- ---------- ------------ ----------- ----------
Equity shareholders' funds at 30 September
2023 11,213,618 36,158,068 116,246 16,167,780 (64,525,667) 88,902,918 88,032,963
------------------------------------------- ---------- ---------- ----------- ---------- ------------ ----------- ----------
(1) Other reserves comprise a merger reserve of US$361,461 and a taxation reserve of US$15,806,319 (31 December 2022: merger reserve of US$361,461 and a taxation reserve of US$14,097,794).
SERABI GOLD PLC
Condensed Consolidated Cash Flow Statements
For the three months For the nine months
ended ended
30 September 30 September
2023 2022 2023 2022
(expressed in US$) (unaudited) (unaudited) (unaudited) (unaudited)
------------------------------------------------------ ----------- ----------- ----------- -----------
Post tax (loss)/profit for period (359,112) (2,943,459) 4,620,779 (870,520)
Depreciation -- plant, equipment and mining properties 2,957,149 1,673,593 4,982,186 4,596,838
Provision for inventory impairment -- -- 370,000 --
Increase in provision for long term taxes receivable -- 1,001,237 -- 1,001,237
Gain on asset disposals (122,186) (43,018) (269,679) (86,181)
Net financial expense 225,107 1,685,536 (259,880) 1,460,332
Provision for taxation 1,052,906 285,152 1,184,470 679,674
Share-based payments 52,151 65,195 138,017 279,117
Taxation paid (415,722) 1,479 (811,612) (129,983)
Interest paid (22,900) (34,659) (408,714) (86,497)
Foreign exchange (loss) / gain (45,098) 93,501 (117,170) (62,406)
Changes in working capital
(Increase)/decrease in inventories (696,001) (731,322) (696,782) (1,126,128)
(Increase)/decrease in receivables, prepayments and
accrued income (1,477) 1,018,749 2,763,565 (2,893,573)
Increase/(decrease) in payables, accruals and
provisions 1,550,835 562,581 1,798,796 222,587
----------------------------------------------------- ----------- ----------- ----------- -----------
Net cash inflow from operations 4,175,652 2,634,565 13,293,976 2,984,497
------------------------------------------------------ ----------- ----------- ----------- -----------
Investing activities
Purchase of property, plant and equipment and assets
in construction (706,419) (917,558) (1,686,505) (3,408,060)
Mine development expenditure (1,274,305) (1,029,512) (2,613,395) (2,878,974)
Geological exploration expenditure (101,611) (68,519) (459,035) (761,499)
Pre-operational project costs -- -- -- (2,266,252)
Proceeds from sale of assets 123,408 38,198 314,923 102,960
Interest received 101,574 103,095 181,373 103,095
------------------------------------------------------ ----------- ----------- ----------- -----------
Net cash outflow on investing activities (1,857,353) (1,874,296) (4,262,639) (9,108,730)
------------------------------------------------------ ----------- ----------- ----------- -----------
Financing activities
Receipt of short-term loan -- -- 5,000,000 4,868,170
Repayment of short-term loan -- -- (5,096,397) --
Payment of finance lease liabilities (295,583) (244,201) (906,565) (746,426)
Net cash (outflow) / inflow from financing activities (295,583) (244,201) (1,002,962) 4,121,744
------------------------------------------------------ ----------- ----------- ----------- -----------
Net increase / (decrease) in cash and cash equivalents 2,022,716 516,068 8,028,375 (2,002,489)
Cash and cash equivalents at beginning of period 13,285,447 9,819,882 7,196,313 12,217,751
Exchange difference on cash 43,936 (158,303) 127,411 (37,615)
------------------------------------------------------ ----------- ----------- ----------- -----------
Cash and cash equivalents at end of period 15,352,099 10,177,647 15,352,099 10,177,647
------------------------------------------------------ ----------- ----------- ----------- -----------
Notes
1. Basis of preparation
These interim condensed consolidated financial statements are
for the three and nine-month periods ended 30 September 2023.
Comparative information has been provided for the unaudited three
and nine-month periods ended 30 September 2022 and, where
applicable, the audited twelve month period from 1 January 2022 to
31 December 2022. These condensed consolidated financial statements
do not include all the disclosures that would otherwise be required
in a complete set of financial statements and should be read in
conjunction with the 2022 annual report.
The Directors have reviewed the principal risks and
uncertainties facing the Group and have concluded that those facing
the Group for the remaining three months of the current financial
year are unchanged from the risks set out in the 2022 Annual Report
and Accounts. In reaching this conclusion, the Directors considered
changes in the internal and external environment during the
intervening period which could threaten the Group's business model,
future performance, liquidity, solvency or reputation. Details of
these principal risks and how they are being managed are set out on
pages 25 to 32 of the 2022 Annual Report and Accounts.
The condensed consolidated financial statements for the periods
have been prepared in accordance with International Accounting
Standard 34 "Interim Financial Reporting" and the accounting
policies are consistent with those of the annual financial
statements for the year ended 31 December 2022 and those envisaged
for the financial statements for the year ending 31 December
2023.
Accounting standards, amendments and interpretations effective
in 2023
The Group has not adopted any standards or interpretations in
advance of the required implementation dates.
The following Accounting standards came into effect as of 1
January 2023
IFRS 17 Insurance Contracts, including Amendments 1 January 2023
to IFRS 17
Classification of Liabilities as Current or Non-current 1 January 2023
(Amendments to IAS 1) and Classification of Liabilities
as Current or Non-current -- Deferral of Effective
Date
There is no material impact on the financial statements from the
adoption of these new accounting standards or amendments to
accounting standards,
Certain new accounting standards and interpretations have been
published that are not mandatory for the current period and have
not been early adopted. These standards are not expected to have a
material impact on the Company's current or future reporting
periods.
These financial statements do not constitute statutory accounts
as defined in Section 434 of the Companies Act 2006.
(i) Going concern
At 30 September 2023 the Group held cash of US$15.35 million
which represents an increase of US$8.16 million compared to 31
December 2022. This increase includes the receipt of a US$5.0
million loan, from Santander Bank in Brazil, on 22 February 2023.
The proceeds raised from the loan are being used for working
capital and also provided the Group with adequate liquidity to
repay an existing US$5 million facility on 12
May 2023. The net debt position (cash less interest bearing liabilities including leases) has improved from a negative net debt position of US$0.25 million at 31 December 2022 to a negative net debt position of US$8.84 million at 30 September 2023.
Management prepares, for Board review, regular updates of its
operational plans and cash flow forecasts based on their best
judgement of the expected operational performance of the Group and
using economic assumptions that the Directors consider are
reasonable in the current global economic climate. The most recent
plans assume that during 2023 the Group will continue gold
production from its Palito Complex operation as well as increase
production from the Coringa mine and will be able to increase gold
production to exceed the levels of 2022.
The Directors will, however, continue to limit the Group's
discretionary expenditures including the continued development of
Coringa which, on a longer term basis, may require additional
external sources of finance to be secured.
The Directors have concluded that, based on the current
operational projections, it remains appropriate to adopt the going
concern basis of accounting in the preparation of these interim
unaudited financial statements. The Directors acknowledge that the
Group remains subject to operational and economic risks and any
unplanned interruption or reduction in gold production or
unforeseen changes in economic assumptions may adversely affect the
level of free cash flow that the Group can generate on a monthly
basis and its ability to secure further finance as and when
required The Directors consider that the Group will be able to
secure the necessary external finance for the development of its
Coringa project but that the timing of this may be dependent on the
receipt of further permits and licences. The Directors believe that
all the necessary permits and licenses will be awarded when all
current information requests of the relevant authorities have been
met.
2. Other Income and Expenses
Under its copper exploration alliance with Vale announced on 10
May 2023, the related exploration activities being undertaken by
the Group under the management of a working committee (comprising
representatives from Vale and Serabi), are being funded in their
entirety by Vale up to a value of US$5 million during Phase 1 of
the programme. The Group at this time has no certainty that the
exploration for copper deposits will result in a project that is
commercially viable recognising that exploration and development of
copper deposits is not the core activity of the Group, there is a
significant cost involved in developing new copper deposits and it
is unlikely that without the financial support of Vale that the
Group would independently seek to develop a copper project in
preference to any of its existing gold projects and
discoveries.
As a result, it is recognising both the funding received from
Vale and the related exploration expenditures through its income
statement. As this is not the principal business activity of the
Group these receipts and expenditures are classified as other
income and other expenses.
3. Finance Costs
3 months 9 months
3 months ended ended 9 months ended ended
30 September 2023 30 September 2022 30 September 2023 30 September 2022
(unaudited) (unaudited2 (unaudited3 (unaudited
US$ US$ US$ US$
Loss on
revaluations of
hedging
derivatives (226,883) -- -- --
Interest expense
on short term
loan (106,197) (79,272) (349,515) (133,131)
Interest expense
on short term
trade loan (24,267) (22,838) (66,158) (35,504)
Interest and
fines on state
sales tax -- (1,503,742) -- (1,503,742)
Interest on
finance leases (24,131) (104,204) (84,915) (104,204)
Total finance
expense (381,478) (1,710,056) (500,588) (1,776,581)
Gain on
revaluation of
warrants -- 12,871 -- 165,495
Gain on
revaluation of
hedging
derivatives -- -- 385,512 --
Realised gain on
hedging
derivatives 98,217 -- 136,938 --
Interest income 101,575 103,095 181,373 103,095
------------------ ------------------ ------------------ ------------------
Total finance
income 199,792 115,966 703,823 268,590
------------------ ------------------ ------------------ ------------------
Net finance
(expense)/income (181,686) (1,594,090) 203,235 (1,507,991)
------------------ ------------------ ------------------ ------------------
4. Taxation
The Group has recognised a deferred tax asset to the extent that
the Group has reasonable certainty as to the level and timing of
future profits that might be generated and against which the asset
may be recovered. The Group has recognised the amount of deferred
tax income of US$23,113 (nine months to 30 September 2022 deferred
tax charge of -- US$92,612).
The Group has also incurred a tax charge on profits in Brazil
for the nine month period of US$1,207,583 (nine months to 30
September 2022 - US$587,062)
5. Earnings per share
3 months ended 30 September 2023 3 months ended 30 September 2022 9 months ended 30 September 2023 9 months ended 30 September 2022
(unaudited) (unaudited) (unaudited) (unaudited)
------------------------------------------------------ -------------------------------- -------------------------------- -------------------------------- --------------------------------
(Loss) / profit attributable to ordinary shareholders
(US$) (359,112) (2,943,459) 4,620,779 (870,520)
------------------------------------------------------ -------------------------------- -------------------------------- -------------------------------- --------------------------------
Weighted average ordinary shares in issue 75,734,551 75,734,551 75,734,551 75,734,551
Basic (loss)/profit per share (US cents) (0.47c) (3.89c) 6.10c (1.15c)
------------------------------------------------------ -------------------------------- -------------------------------- -------------------------------- --------------------------------
Diluted ordinary shares in issue (1) 75,734,551 81,488,078 75,734,551 81,488,078
Diluted (loss)/profit per share (US cents) (0.47c)((2) (3.89c)((2) 6.10c (1.15c)((2)
------------------------------------------------------ -------------------------------- -------------------------------- -------------------------------- --------------------------------
(1) There were no share options outstanding at 30 September 2023 (30 September 2022: 1,750,000 options vested and exercisable as at 30 September 2022). At 30 September 2023 there were 2,075,400 Conditional Share Awards in issue under the Serabi 2020 Restricted Share Plan (the "2020 Plan") (with 459,800 Conditional Share Awards issued in 2020 and a further 1,615,600 Conditional Share Awards issued during the third quarter of 2023. The underlying shares to be issued pursuant to these Conditional Share Awards can only be issued at the end of the stipulated vesting period and also only if certain performance conditions have been met. During the period the Company announced that 404,700 Conditional Share Awards which had been issued in 2020 had lapsed as the performance conditions had not been achieved. The vesting period for the remaining 2,075,400 Conditional Share Awards has not yet been completed. Accordingly, none of the Conditional Share Awards that may be issued in the future have been included in the calculation of diluted earnings per share.
(2) As a loss was recorded for the period the effect of dilution would be to reduce the loss per share. Accordingly the diluted loss per share is considered to be the same as the undiluted loss per share.
6. Post balance sheet events
Subsequent to the end of the period, 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.
(END) Dow Jones Newswires
November 30, 2023 02:00 ET (07:00 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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