Q3-2024 Production Results and Operational Highlights
Q3-2024 Production Results and Operational Highlights
Serabi Gold plc ("Serabi" or the "Company") ((AIM:SRB, TSX:SBI, OTCQX:SRBIF), the Brazilian focused gold mining and development company, is pleased to announce the Company's third quarter production results and operating highlights for FY2024 (all financial amounts are expressed in U.S. dollars unless otherwise indicated).
QUARTER HIGHLIGHTS
Highest quarterly gold production year to date of 9,489 ounces for Q3-2024.
Released results of the updated pre-economic assessment ("Updated PEA") for its currently producing Coringa Gold operation ("Coringa"), prepared by NCL Ingeniería y Construcción SpA of Santiago, Chile ("NCL"). Highlights include:
Annual production of 28,000oz in 2025, ramping up to 36,000oz per year between 2026 and 2031 with an 11-year mine life until 2034 at an average life of mine AISC of $1,241/oz;
After-tax NPV10% of $145M with average life of mine annual free cash flow of $19M using a long-term gold price of $2,100/oz.
Construction of the classification plant (crusher and ore sorter) progressing on time and budget; Commissioning trials of the crusher already ongoing. The ore sorter remains on track to being fully operational during Q4.
Cash as at 30 September 2024 was $20.0M vs cash as at 31 December 2023 of $11.6M.
Net cash balance at quarter end (after interest bearing loans and lease liabilities) of $14.0M (31 December 2023: net cash $5.0M)
The Company is reiterating FY2024 consolidated gold production guidance of 38,000, 40,000 ounces.
Mike Hodgson, CEO of Serabi, commented:
"The third quarter has been our best quarterly production year to date with close to 9,500 ounces generated. The process plant again performed admirably with another quarter recording approximately 55,000 milled tonnes (600 tonnes per day). Mine output also exceeded 58,000 tonnes.
The Coringa orebody continued to perform well with production principally now coming from levels 290m and 260m. The main Serra ramp has now reached level 165m and with development on levels 225m, 195m and 165m the mine is being developed well ahead of production. As mentioned in the past, the conversion of inferred resources into reserves at Coringa is close to 90% and therefore, the return of mineral reserves per metre developed is highly beneficial.
The classification plant being assembled at Coringa is now close to completion and remains on track to being operational during Q4. The Company plan to pre-concentrate mined ore at Coringa and truck this preconcentrated product to the Palito plant, 200km to the north, has been formally documented in the forthcoming Updated PEA. The full NI 43-101 compliant Technical Report will be issued by November 21 at the latest.
We are tracking well towards guidance, and with the classification plant progressing according to plan at Coringa, we remain very optimistic for the remainder of the year. We look forward to seeing the classification plant being operational next quarter, and hopefully what will be a great end to the year."
SUMMARY PRODUCTION STATISTICS FOR 2024 AND 2023
Qtr 1
Qtr 2
Qtr 3
YTD
Qtr 1
Qtr 2
Qtr 3
Qtr 4
Full Year
2024
2024
2024
2024
2023
2023
2023
2023
2023
Group
Gold production (1)(2)
Ounces
9,007
9,003
9,489
27,499
8,005
8,518
8,738
7,891
33,153
Mined ore
Tonnes
56,296
59,564
58,862
174,721
41,546
41,022
44,744
49,541
176,853
Gold grade (g/t)
5.31
5.06
5.48
5.28
6.49
6.94
6.64
5.22
6.28
Milled ore
Tonnes
54,521
55,192
54,579
164,292
39,004
41,116
43,092
48,988
172,201
Gold grade (g/t)
5.38
5.31
5.59
5.42
6.75
6.84
6.72
5.31
6.35
Horizontal development
Metres
3,087
3,481
3,146
9,714
2,464
2,977
2,923
3,134
11,498
(1) The table may not sum due to rounding.
(2) Production numbers are subject to change pending final assay analysis from refineries.
OPERATIONAL RESULTS
Total production for the third quarter was 9,489 ounces. Total ore mined during the quarter was 58,862 tonnes at 5.48 g/t compared to 59,564 tonnes at 5.06 g/t of gold for the second quarter of 2024.
The Palito orebody continued to perform satisfactorily with good mine outputs, but not at forecast grades. The problems highlighted in the previous quarterly report cited the need to bulk mine the Chica da Santa sector where selective mining had originally been planned. This resulted in lower than budgeted grades due to unavoidable dilution. As the Company ramps up the development of Coringa, several crews have been redeployed and, as a result, development and production levels at Palito have decreased slightly. A return to mined grades of 6.00g/t is forecast with the opening of the Barichello sector which will contribute a significant volume of production for 2025.
The process plant performance has been exceptional with another approximately 55,000 tonnes milled during the quarter equivalent to 600 tonnes per day, this has been an exceptional effort, brought about by exceptional crushing performance and better preventative maintenance programmes which have dramatically reduced mill downtime. We have now had a consistent nine months of throughput at these new record levels.
The Palito Complex process plant treated 54,579 tonnes of ROM ore during the quarter, with an average grade of 5.59 g/t of gold, compared with 55,192 tonnes at 5.31 g/t in the second quarter of 2024.
A total of 3,146 metres of horizontal development has been completed for the quarter of which, 1,957 metres was ore development. The balance is the ramp, crosscuts and stope preparation development.
The Coringa orebody continues to perform very well, with mined grades averaging 6.44 g/t for the quarter. Production is focused on the uppermost levels 320m, 290m and 260m, with development now complete or very nearly on levels 225m and 195m. The newest level 165m is now under development as the main ramp continues to advance towards level 130m. Coringa has 2½ fully developed levels ahead of stoping.
UPDATED CORINGA PEA RESULTS (October 7, 2024 News Release)
Highlights:
Annual production is estimated at 28,000oz in 2025, and then averages 36,000oz per year between 2026 and 2031 with an 11-year mine life until 2034
Average Life of Mine ("LOM") All-In Sustaining Cost ("AISC") of $1,241/oz including royalties and refining costs using the Base Case gold price.
The updated Mineral Resource Inventory at Coringa, upon which the Updated PEA is based were as follows:
Measured & Indicated Resources (M&I) 795kt @ 7.03g/t gold (179koz contained);
Inferred Resources 1,454kt @ 5.81g/t gold (271koz contained);
Mine plan utilises 145koz M&I and 241koz Inferred which equates to 81% of the total M&I resource inventory and 89% of the inferred resource.
Average LOM gold grades from the mine of 5.38 g/t, which are increased to 8.50 g/t after ore sorting, producing a total gold production of 363koz.
Under the Base Case scenario, the operation underscores robust economics:
Post-tax NPV10% of $145M;
Average annual free cash flow of $19M;
Sustaining Life of Mine ("LOM") capital expenditures of $87M to be funded from project cash-flow;
Mining is by underground shrinkage stoping using a cut-off grade of 3.16 g/t gold. Resource widths and grades within the Updated PEA mine plan have been further diluted to 1 metre minimum mining widths.
An interview with Mike Hodgson by Crux Investor discussing the PEA can be accessed here: https://youtu.be/gnWhxMMfMB8
An interview with Mike Hodgson by BRR Media discussing the PEA can be accessed here: https://brrmedia.news/Coringa_PEA
The Updated PEA was completed by NCL Ingeniería y Construcción SpA ("NCL") of Santiago, Chile, Serabi's independent engineering consultant.
The full NI 43-101 compliant Technical Report, supporting the economic results and including the updated mineral resource statement is being prepared by NCL and is required to be published with 45 days, with an expected release no later than November 21, 2024. A further news release will be made when it becomes available with copies available on the Company's website and on SEDAR+.
Table 1, Summary of Updated PEA Results (in Millions)
Gold Price (per ounce)
$1,950
BASE CASE$2,100
$2,280
SPOT$2,600
Pre-tax NPV5%
$193
$230
$275
$356
Pre-tax NPV10%
$151
$181
$217
$281
Post-tax NPV5%
$159
$184
$214
$267
Post-tax NPV10%
$125
$145
$169
$211
Project Post-tax Cash Flow
$210
$242
$281
$350
Avg. Annual Free Cash Flow
$16
$19
$22
$27
Avg. Gross Revenue
$52
$56
$61
$69
Table 2, Coringa Updated PEA - Base Case Metrics
