TIDMSRB
For immediate release
14 October 2019
Serabi Gold plc
("Serabi" or the "Company")
Serabi reports highest quarterly production for 2019
Serabi Gold plc (AIM: SRB, TSX: SBI), the Brazilian focused gold mining
and development company, is pleased to provide the results and a review
of its third quarter operational and development activities in the
Tapajos region of Para State, Northern Brazil.
A full version of this news release in PDF format which includes images
can be accessed using the following link
https://www.globenewswire.com/Tracker?data=0zh63Q7AONxurtDohqI7frP4fEeIt_h8Z2h0ccSZV_dOlnqV-z6fphdNsq6w0xKEjWBQPx4-mZlAtVz25zR9zjMjY_tLpZAhA3f3s-3kUA4=
https://bit.ly/35wpxYw
OPERATIONAL and DEVELOPMENT HIGHLIGHTS
-- Third quarter gold production of 10,187 ounces of gold, resulting in
total production for the year to date of approximately 30,000 ounces, an
eleven per cent improvement over the same period in 2018.
-- Total ore mined for the quarter of 44,757 tonnes at 7.14 grams per tonne
("g/t") of gold.
-- 45,378 tonnes of run of mine ("ROM") ore were processed through the plant
from the combined Palito and Sao Chico orebodies, with an average grade
of 6.84 g/t of gold.
-- 2,433 metres of horizontal development completed during the quarter.
-- The Company anticipates full year production for 2019 will be between
40,000 and 41,000 ounces.
-- Completion of the Company's Preliminary Economic Assessment ("PEA") on
the Coringa Gold Project in September, demonstrating strong positive
economics.
Key Operational Information
SUMMARY PRODUCTION STATISTICS TO DATE FOR 2019 AND
FOR 2018
Qtr 1 Qtr 2 Qtr 3 Total Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total
------------ -------
2019 2019 2019 2019 2018 2018 2018 2018 2018
------------ ------- ------ ------ ------ ------- ------ ------ ------ ------ -------
Gold
production
(1) (2) Ounces 10,164 9,527 10,187 29,878 9,188 9,563 8,101 10,256 37,108
Mined ore --
Total Tonnes 42,609 44,784 44,757 132,151 39,669 36,071 42,725 44,257 162,722
Gold grade (g/t) 7.47 6.72 7.14 7.10 7.49 8.12 6.23 7.45 7.29
Milled ore Tonnes 43,451 43,711 45,378 132,540 43,145 38,155 41,405 45,548 168,253
Gold grade (g/t) 7.69 6.72 6.84 7.08 7.04 7.71 6.11 7.39 7.06
Horizontal
development
-- Total Metres 1,868 2,419 2,433 9,139 2,353 2,744 2,814 2,460 10,371
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 2019 include treatment of 20,554 tonnes of
flotation tails at a grade of 4.13 g/t (2018 full year: 16,466 tonnes at
3.71g/t)
3. The table may not sum due to rounding.
Mike Hodgson, CEO, commented:
"We are delighted to report our third quarter production of 10,187
ounces of gold, which is another excellent performance and as a result
the Company is very well placed to exceed 40,000 ounces of gold
production for 2019 and significantly improve on the 2018 gold
production of 37,108 ounces.
"Mining and plant throughput rates and grades showed modest improvements
compared to the second quarter. As reported last quarter, being plant
constrained, we focus strongly on the quality of the ore feed and
maximising plant availability. As a result, the plant has now processed
132,540 tonnes year to date, which represents an eight per cent
improvement over the same nine month period in 2018. The processing
circuit for treatment of stockpiled gold bearing flotation tailings
continued to perform well, and for the last five months processing rates
have averaged over 100 tonnes per day with a total of 20,554 tonnes of
an average grade of 4.13 g/t of gold having been processed during the
year to date. With a considerable stock of this tailings material
remaining, we expect to continue processing these stockpiles to
supplement run of mine gold production beyond the year end.
"The quarter also saw the much anticipated delivery of our ore sorter.
The accompanying infrastructure is close to completion and we hope to
start commissioning before the year end and with the expected benefits
starting to be seen in the early part of 2020. Its introduction will
provide benefit by creating much needed space in the process plant in
turn allowing for more flexibility to improve maintenance scheduling
whilst also, through the liberation of process capacity, providing the
opportunity to increase gold production in 2020.
"Development and production from the Palito orebody followed the same
pattern as the second quarter, with development focusing on the veins of
Pipocas, Mogno and Ipe veins. The latter two veins are narrower than
most Palito veins but exhibit at times exceptionally high grades. We
are mining these veins on the 144mRL and above, some 200 vertical metres
above the deepest levels in the mine, and therefore can continue to
provide run of mine without any requirement for further deepening of the
mine.
"At the Sao Chico orebody, development continues on the deepest level,
-48mRL, with lateral development being undertaken to the west in the
upper level of +186mRL. During the quarter we contracted a surface
drilling contractor to undertake step out drilling east and west of the
Sao Chico orebody to follow up on the results of the last drilling
campaign undertaken during 2018. The intention of this new campaign is
to drill the immediate strike extensions beyond the current mine limits,
with subsequent step outs. After this initial work, the rigs will be
assigned to test the near-minesite geophysical anomalies of Abelha,
Besouro, Cicada and Cinderella, all of which lie within a 10 kilometre
radius of Sao Chico.
Please click on the link below to access an image of the near-minesite
geophysical anomalies around Sao Chico
https://www.globenewswire.com/Tracker?data=0zh63Q7AONxurtDohqI7flz_BcgqvBan-8z-Z7PXOW7vh16yMTzDUrqY5nReorcF_dIKevCA3nD_C2YyqQQNJhbrsT1gm0PAu-HGCS3-nsE=
https://bit.ly/2IN2sXP
"We are very excited about the prospectivity of these anomalies. They
each exhibit geophysical signatures substantially better than anything
else we have encountered around the Sao Chico deposit, and all have been
the subject of significant artisanal mining activity, suggesting that
the conductive body that we have identified has good potential to be
gold bearing.
"The most significant news of the quarter was the release of the results
of the Preliminary Economic Assessment ("PEA") at Coringa. The
highlights of the study are reproduced below, but in summary the results
were very positive, indicating annual gold production, after an initial
ramp-up period, averaging approximately 38,000 ounces per annum, a mine
life of approximately nine years, average gold grades of 8.3 g/t, an
AISC of approximately US$852 per ounces and an initial capex estimate of
US$25 million. The costs and capital each include a 20 per cent
contingency, so I feel confident that we can improve on these cost
estimates.
"We are continuing to work very hard on the outstanding permitting
requirements. The amended Environmental Impact Assessment (EIA) for
Coringa, revised to replace the original plan for a conventional
tailings management facility with dry tailings technology (a filtration
plant allowing for the dry stacking of tails), was submitted to the
authorities two weeks ago. It was our decision to make this
resubmission as the original EIA had already been approved by the state
environmental agency, SEMAS, in late 2018. Whilst we are now awaiting
approval from SEMAS again, they have welcomed our decision to revise the
tailings management solution and we expect swift approval of the
amendment. This will allow us to proceed with the necessary public
hearings and we hope to be in receipt of the Preliminary Licence
("Licencia Previa") by the year end, or early in the first quarter of
2020 at worst.
"With 30,000 ounces of gold produced for the year to date, the Company
is well on course to achieving its best ever annual level of production.
With mine production in good order and the additional ounces the
tailings treatment is now bringing, I fully expect a good final quarter.
Gold prices remain strong, and even stronger in Brazilian Reals.
Following the issuing of a positive PEA and the resubmission of the EIA,
we now hope we can progress Coringa permitting rapidly and see real
progress on the ground at site next year. I look forward to reporting
further positive news in the coming months."
Production Results
Total production for the third quarter of 2019 was 10,187 ounces of gold,
generated from the processing of 45,378 tonnes of ore at overall average
grades of 6.84 g/t of gold. This processed ore was sourced from hard
rock mined ore from the Palito and Sao Chico orebodies, supplemented by
the processing of 9,662 tonnes of surface stockpiled flotation tailings
grading approximately 3.97 g/t gold. Mined tonnage for the quarter
totalled 44,757 tonnes with a grade of 7.14 g/t of gold.
On 30 September 2019, there were coarse ore stocks of approximately
2,600 tonnes of ore with an average grade of 8.50 g/t of gold, and
significant stockpile of flotation tails with an estimated average grade
of 3.00 g/t of gold. These stockpiles are being slowly consumed, used as
a 'top-up' to mined ROM to keep the plant full. The stockpile of
flotation tailings is considered to be sufficient to continue to process
this material at current rates for a significant part of 2020.
A total of 2,433 metres of horizontal development has been completed
during the quarter, of which 967 metres was ore development. The
balance is the ramp, cross cuts and stope preparation development.
2019 Production Guidance
The Company anticipates full year production for 2019 will be between
40,000 and 41,000 ounces.
Coringa PEA
The summary economic results of the Coringa PEA, as previously announced
on 6 September 2019, are reproduced below (without adjustment):
BASE CASE
Gold Price (per ounce) Units $1,275 $1,350 $1,450
Pre tax NPV (5%) US$m $55.7 $71.3 $92.2
Pre tax NPV (10%) US$m $37.2 $49.4 $65.8
Post tax NPV (5%) US$m $47.3 $61.3 $79.6
Post tax NPV (10%) US$m $30.7 $41.7 $56.1
Post tax IRR % 31% 37% 46%
Project after tax cash flow US$m $71.6 $90.1 $114.0
Average annual free cash flow US$m $11.5 $13.7 $16.6
Average gross revenue US$m 43.4 46.0 49.4
-- The Base Case project payback is estimated to occur within 2.25
years of first gold production;
-- Average Life of Mine ("LOM") All-In Sustaining Cost ("AISC") of
US$852(1) per ounce including royalties and refining costs using the
Base Case gold price;
-- Average gold grade of 8.34 g/t gold producing a total gold
production of 288,000 ounces;
-- Typical annual production once the project is in full operation
averages 38,000 ounces per year(2) ;
-- Initial capital requirement of US$24.7 million prior to
sustained positive cash-flow;
-- Sustaining capital expenditures of US$9.2 million to be funded
from project cash-flow;
-- Indicated mineral resource inventory of 125,000 ounces of gold,
supported by a further Inferred Resources of 178,000 ounces of gold from
a total geological resource of 195,000 indicated ounces of gold and
346,000 inferred ounces of gold, to be produced by underground open
stoping using a cut-off grade of 6.00 g/t gold;
-- Total Life of Mine of approximately 9 years;
-- The Base Case includes a 20 per cent contingency on both
operating and capital costs;
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: mailto:contact@serabigold.com
contact@serabigold.com
--------------------------------------------------
Website: http://www.serabigold.com
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
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 analyse 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.
"scrubber" -- a machine for cleaning ore and removing impurities such as
clays, coatings or other deleterious materials.
"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 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.
ENDS
Attachment
-- Q3 2019 Operational Update PDF version
https://ml-eu.globenewswire.com/Resource/Download/89decf90-5363-44de-b408-dc2c4c7f6b9b
(END) Dow Jones Newswires
October 14, 2019 02:00 ET (06:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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