4th Quarter Investor Update Announcement
PRESS RELEASE - 25th January 2008
SERABI MINING plc ("Serabi" or "the Company")
4th Quarter Investor Update Announcement
Serabi Mining plc (AIM:SRB) announces that it has today issued a 4th
Quarter Investor Update for the quarter ended 31st December 2007.
The full text of the quarterly update is available from the Serabi
offices at 30 - 32 Ludgate Hill, London, EC4M 7DR or from the
website: www.serabimining.com
The company has highlighted in its update the following matters:
* 2007 production 33,963 gold equivalent ounces
* Production expected to rise to between 40,000 and 45,000 gold
equivalent ounces in 2008 Imminent commissioning of new mining
equipment and revised mine plans point to a much improved
operating outlook
* Advanced evaluation of new discoveries may provide additional,
near-term production opportunities
* Significant escalation of exploration at Palito & Jardim do Ouro
delivers impressive results across a number of fronts
* Serabi directly benefitting from strong metal prices as an
unhedged producer
+--------------------------------------------------------------------------+
| Palito - Operating Results (1) |
|--------------------------------------------------------------------------|
| | | 2007 | 2006 |
|------------+-----+---------------------------------------------+---------|
| | | Q1 | Q2 | Q3 | Q4 | YE | YE |
|------------+-----+--------+--------+--------+--------+---------+---------|
| Total | | 55,251 | 61,567 | 56,903 | 56,926 | 230,647 | 151,239 |
| Mined | t | (614) | (677) | (619) | (619) | (632) | (414) |
| (per day) | | | | | | | |
|------------+-----+--------+--------+--------+--------+---------+---------|
| Mined Ore | t | 42,217 | 50,058 | 45,754 | 41,148 | 179,177 | 132,089 |
| (per day) | | (469) | (550) | (497) | (447) | (491) | (362) |
|------------+-----+--------+--------+--------+--------+---------+---------|
| Milled | t | 42,705 | 45,245 | 45,054 | 40,481 | 173,485 | 117,618 |
| (per day) | | (475) | (497) | (490) | (440) | (475) | (322) |
|------------+-----+--------+--------+--------+--------+---------+---------|
| Head Grade | g/t | 6.5 | 6.0 | 5.4 | 5.4 | 5.8 | 9.4 |
|------------+-----+--------+--------+--------+--------+---------+---------|
| Recovery | % | 89.6 | 91.1 | 90.0 | 89.8 | 90.1 | 91.4 |
|------------+-----+--------+--------+--------+--------+---------+---------|
| Gold | oz | 8,044 | 7,888 | 7,021 | 5,989 | 28,982 | 32,498 |
|------------+-----+--------+--------+--------+--------+---------+---------|
| Copper | t | 125.6 | 127.0 | 96.2 | 110.4 | 459.2 | 568.9 |
|------------+-----+--------+--------+--------+--------+---------+---------|
| Gold | | | | | | | |
| Equivalent | oz | 9,301 | 9,417 | 8,176 | 7,069 | 33,963 | 39,197 |
| (2) | | | | | | | |
+--------------------------------------------------------------------------+
MANAGEMENT REVIEW
Following a difficult year at Palito in 2007, management's principal
focus for the year ahead is to put in place plans to deliver:
(i) reliable, sustainable and profitable production; and
(ii) establish a detailed understanding of and quantify the wider ore
potential in the Palito / Jardim do Ouro district.
This will be used to determine future expansion potential and support
longer-term planning.
As a basis for achieving the company's goals, we have recruited an
experienced local management team based in Brazil who will greatly
assist with the challenges of underground mining and related
management. This team is already in place to provide a solid
foundation for the delivery of our plans.
Operations and Outlook
The principal operating goals for this year are:
* To achieve sustainable, optimum economic production
* Contain gross, real operating costs in local currency (BR$)
* Achieve a unit operating cost per gold equivalent ounce of less
than US$400 (based on US$ / Brazilian Real 1.75)
* Improve reliability of results through improved planning,
development of management systems and personnel training
Central to improving operating results at the Palito mine is the
introduction of mini-scoops, which will enable us to reduce mine
development widths and thus improve the grades delivered to the
plant. The first two mini-scoops are expected to be operational by
the end of the first quarter, with another two scheduled for delivery
during the second quarter. Additional equipment being added to the
mining fleet includes new jumbos and mine trucks.
Meanwhile, considerable work has also been carried out to optimise
mining techniques at Palito in the future. It has been concluded
that an adaptation of the long-hole stoping method, with reduced
stoping heights, will produce best results. The combination of
revised long-holing and the use of mini-scoops for mine development
will bring greater selectivity and best grade success. A robust mine
plan based on exploitation of seven lodes, compared with only three
last year indicates production for 2008 will rise to between 40,000
and 45,000 gold equivalent ounces.
In addition, there are a number of mining opportunities under review
at Palito not incorporated into the current 2008 plan. These
opportunities could impact positively on the future production
outlook:
* Production from new sulphide ore sources at Jatoba, Chico da
Santa and Ruari's Ridge
* Development of ancillary ore sources associated with main
structures and / or encountered during development
* Development of local oxide deposits e.g. Ruari's Ridge
Exploration
Various exploration and evaluation programmes that were initiated
during the second half of 2007 have been successful and the results
are promising; the most exciting results being the identification of
high-grade mineralisation at Palito West along with a new series of
veins lying between the PMZ and the Chico da Santa structures
north-east of the PMZ operation. Further drilling and development of
both of these areas is planned for 2008. In addition, deep drilling
of the northern PMZ is well advanced with the objective of extending
resources at depth.
Potentially, the most significant exploration activity by the company
to date was the 6,000 hectare helicopter-borne EM survey concluded in
January. The results from this programme are expected to have a
significant impact on the exploration programme in identifying future
ore potential of the area once the results have been interpreted. We
hope to provide an initial report on the outcome of the survey before
the end of the first quarter. Based on the success of ground-based
EM surveys in identifying a number of mineralised targets at Palito
last year, the use of Heli-EM (covering a much wider area) is likely
to provide a major breakthrough in this area of the Tapajos, rapidly
unlocking areas with good potential close to the established
operations but where access might hinder conventional initial
evaluation programmes.
With these initiatives and opportunities we believe the outcome for
2008 will show a significant operating improvement on 2007, with good
exploration prospects set to place Serabi in a strong position for
future growth.
Graham Roberts - Chairman
Mike Hodgson - CEO
Enquiries
Please note that Serabi Mining plc is currently moving offices and
has temporary telephone numbers in place:
Telephone: 020 7936 9040
Fax: 020 7936 9100
Serabi Mining plc
Graham Roberts 020 7936 9040
Chairman Mobile: 07768 902475
Mike Hodgson 020 7936 9040
CEO Mobile: 07799 473621
Clive Line 020 7936 9040
Finance Director Mobile: 07710 151692
Robyn Hodson 020 7936 9040
Investor Relations
E-mail: contact@serabimining.com
Website: www.serabimining.com
Numis Securities Limited
John Harrison Tel: 020 7260 1000
James Black Tel: 020 7260 1000
Notes to Editors
The Tapajos region of northern Brazil encompasses an area of
approximately 100,000 km², primarily situated in south-west Para
State. It has a significant history of alluvial gold production with
estimated gold production of some 30 million ounces having being
recovered, primarily from artisanal workings.
Present in the Tapajos since 1999, Serabi has established the only
'hard rock' mine in the region to date at its Palito gold mine, which
produced 39,197 ounces of gold equivalent in 2006 and achieved
commercial production at Palito in October 2006
Serabi has a significant exploration programme focused on the Tapajos
region, owns and operates four surface drilling rigs and has its own
assay laboratory.
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