Serabi Gold PLC (LON: SRB, TSX: SBI) the United Kingdom domiciled gold exploration and mining company had the eventful year in 2019. The Company achieved a major milestone by producing more than 40,000 ounces of gold, completed a new and exciting PEA on its Coringa gold project and also achieved some excellent results from further exploration activity it undertook around the Sao Chico orebody at its Palito Mining Complex, which is now being followed up with a surface drilling programme. The initial results have been very encouraging, as the Company intersected ore grades of 21.03 g/ton and 15.39 g/ton form holes 19-SCUD-219 & 248 respectively, ore grades of 16.61 g/ton and 27.35 g/ton from holes 19-SC-143 & 142 respectively, and ore grades of 34.42 g/ton and 114.49 g/ton from holes 19-SCUD-284 & 19-SCUD-274 respectively. Further results like this could significantly enhance the Company's resource base and bring about significant value addition for investors.
The Company on 10 February 2020 announced an important update on the public hearing of its Coringa project, which is required as part of the process in the award of the initial Licençia Previa which is required as part of the authorization before full scale construction of the mine and infrastructure can be started. It also updated investors about the commissioning work being undertaken on its new ore sorter installed at the Palito Complex.
- The public hearing on the Palito Gold complex took place on 06 February 2020 at Novo Progresso, in the Para state of Brazil.
- The meeting was attended by nearly 600 people from various government departments and the general public. The Company believes that having visited the site, the officials and the general public have formed a positive view of the Company and the prospects of the Project.
- The Company believes that SEMAS, the state environmental authority for the state of Para would now be making a positive recommendation to COEMA, the State Environmental Council for the state of Para, the legislative body that will give final approval for the award of the Licençia Previa. The Company expects COEMA will take approximately two months to arrive at a decision before granting Licençia Previa.
- Post the Licençia Previa; the company will apply for an Installation Licence which will be granted after approval of the final plant and site design approval. Subject to financings it will then be able to start full devilment and construction.
- During January 2020, the Company announced that it had conditionally raised US$12 million, by issuing Convertible Loan Notes to Greenstone Resources II LP. The proceeds will be used partly to progress the development of the Coringa project, partly for the settlement of the final acquisition payment for the Coringa project, repayment of loans to Sprott Resource Lending Partnership and the rest for Company's working capital needs.
- The development of the project, which is currently estimated to have the potential to produce 38,000 ounces of gold per year, would nearly double the production capacity of the Company when fully commissioned.
- The company expects the initial commencement of production from the Coringa gold project to happen during the fourth quarter next year.
- Commissioning and trials of the ore sorter are underway on the Palito Complex site since 8 January 2020 with the representatives from Comex, the manufacturer of the ore sorter, being present at the site. The ore sorter will significantly enhance the Company's ability to sort through lower quality grades of ore and bring down its cost of production.
- The company believes that through the addition of the ore sorting machine, it will be able to achieve 50,000 ounces of annualized production a significant improvement from its current 40,000 ounces of annualized production.
- Previous year in the fourth quarter, the Company produced 10,223 ounces of gold, which collectively with the combined production of previous three quarters of the year adds up to a production of 40,101 ounces, culminating in total annual gold production to be within guidance given for the year, and a seven per cent improvement over 2018. For the year 2020, the Company has given a guidance in range of 45k – 46k oz.
- The Company at the end of January 2020 is in a good financial position and is funded well to smoothly conduct its operations both at the Palito Mining Complex and the Coringa gold project.
Stock Performance at The London Stock Exchange
(Source – Thomson Reuters)
On 11 February 2020, while writing this report, the shares of the Company were hovering on the London Stock Exchange at a price of GBX 86.50.
During the past 52 weeks, the shares of the company have touched a 52-week high of GBX 92.80, while touching a 52-week low of GBX 24.00 at the London stock exchange.
On 11 February 2020, the Company had a total market capitalisation of around £50.72 million on the Exchange. During the last one month, the shares of the company have generated a return of +12.6651 per cent and on a year to date basis a return of +36.0648 per cent.
The Company is expecting this year to be another eventful year. The ore sorter is expected to help the company ramp up its production volumes to at least 45,000 ounces of Gold at the Palito Mining Complex for the year 2020. The exploration activity at the Sao Chico orebody will continue, and the company expects to report more good news flow as results are received through the year.
On the Coringa gold project, the company expects to complete the licensing procedure by the fourth quarter of 2020, post which it will start the construction activity, which should take between nine to twelve months to complete. The company, in addition to its own funds may also have to look for a further round of debt raising exercise during the next two years to finance the construction at the Coringa gold project site. The company expects that the Coringa gold project will help the company achieve its target of 100,000 ounces of gold production per annum
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