Announcement of Interim Financial Results

PRESS RELEASE - 29th September 2008

SERABI MINING plc ("Serabi" or "the Company")

Announcement of Interim Financial Results for the 6 months ended 30
June 2008


Report of the Chairman and Chief Executive

Activity has been intense over the first half of 2008, with the dual
objectives of trying to optimise the mining operation at Palito and
rapidly assessing the mineral potential of Serabi's assets,
particularly over the near-mine Palito district.  However, in the
light of continuing mining problems at Palito the recent decision to
reduce, in the short term, the scale of the Company's operational
activities, whilst carrying out a review of available strategic
options, has overshadowed other events of this year.

This was not a decision taken lightly.  The production shortfalls of
the first part of 2008 and the reasons for them have been well
reported.  Production levels improved in June and July following the
arrival of the additional mining fleet towards the end of the second
quarter. Indications from management in Brazil were that this
improvement would be sustained during August and they were confident
that a successful turnaround was underway.

The results for August, however, fell significantly short of planned
levels of ounces produced, rates of mining and productivity per man
hour. This shortfall was of great concern, particularly given that
the preceding operational difficulties encountered during the first
half of 2008 had already resulted in the rate of mine development
achieved being lower than required for future production plans.  The
possibility of continuing delays in recovering mine development rates
was considered likely to compromise the ability of the mine to
achieve production and cost targets in 2009 and beyond if not dealt
with.

As reported earlier this month, in the light of these difficulties a
detailed review of operations at the Palito mine has been undertaken
by the Company's Chief Executive in conjunction with the Company's
Brazilian management.  The findings of this review were that mining
shortfalls were now arising as a result of operating problems which
were only apparent following the introduction of the new equipment,
plans and targets, namely;


  * daily production targets were not being adequately communicated
    and enforced;
  * equipment operators were not following prescribed practices,
    resulting in the inefficient use of equipment and reduced
    outputs; and
  * maintenance operations were not adequately focused on returning
    equipment to production at the earliest possible opportunity

While these issues can be resolved, it was concluded that they could
not be solved quickly.  The solutions are twofold.  First, the
introduction of a new mine management team, new experienced equipment
operators and maintenance teams is required. Second, additional
working capital is required in order to permit the Company to place
the mine into a development mode for an extended period, thus
establishing a sound footing from which to achieve future production
goals.

Cash holdings at the end of August were US$5.97 million and we have
subsequently made an initial payment of US$600,000 to cover the first
phase of redundancies at Palito.  We estimate that a further
US$600,000 will be required should the mine be placed on a care and
maintenance basis later this year.  Funding will also be required to
meet outstanding trade liabilities with suppliers in Brazil.  The
extent of this funding will be dependent on the level of any surplus
cash flow that can be achieved from the current activities and the
proceeds from the sales of surplus assets.

The ore deposits already defined at Palito continue to present the
basis for an attractive, viable mining operation.  We remain
convinced that the Palito mine retains significant value and
represents an excellent opportunity, particularly in light of the
potential for the immediate surrounding area to host additional
economic ore bodies.  Our immediate priority is therefore to
safeguard the value of the mine and the exploration assets of the
company.  In this way, whether through an injection of new working
capital or a sale in whole or in part of the exploration and mine
properties, management has the opportunity to extract future value
for shareholders.


EXPLORATION

Following the discovery of significant areas of new mineralisation
within the near-mine Palito area in 2007, Serabi has been extending
the exploration and evaluation of this district over the last year.
The results to-date have been very encouraging and can be categorised
under the headings Resources, Palito near-mine exploration and
regional exploration. In all three areas Serabi is seeing success.
During the first half of the year, Serabi has through this programme,
significantly enhanced its understanding of its exploration
properties.

At Palito a reserve estimation has been reported for the first time
together with a new estimation of the resources.  Highlights of these
new estimates are:


  * A total Measured, Indicated and Inferred resource of 599,283
    ounces of contained gold (668,228 gold equivalent ounces).

  * Total proven and probable ore reserve of 172,836 ounces of
    contained gold (187,538 gold equivalent ounces), included within
    the overall resource.

The resource was established over 25 different veins of a minimum
70cm width, located within the larger mineralised sections of the
Palito Main Zone (PMZ), the Palito West zone, Chico da Santa area and
the Ruari's Ridge zone.  The reserve and resource estimate was based
on information available up to 31 March 2008.  Subsequent drilling
and assay results are expected to contribute to a significant
increase of this estimate, having already confirmed an extension of
the main G3 ore body to the south by approximately 300 metres along
strike, whilst remaining open and with an apparent increase in
mineralised widths.

At Palito West, additional drilling has extended the strike and
plunge extent of the two main high-grade veins located there.

The helicopter-borne, electromagnetic, geophysics survey conducted
earlier in the year over a 6,000 hectare area, significantly expanded
the detailed exploration of the district.  A review of these results
identified numerous anomalies over this area.  The detailed
interpretation of these has now been undertaken, considering the
geophysics with existing geochemical and geological data. From these,
nine discrete anomalies and seven anomalous zones have been assigned
a highest priority rating.

Of the other exploration prospects within Serabi's portfolio, two in
particular are considered to have strong potential to support new,
stand alone operations, namely Rio Marupa/Castanheira and Pison.

The Rio Marupa project, which is located some 150 km south-west of
Palito and adjacent to the Company's existing Castanheira prospect,
is a highly attractive prospect, with a history of extensive
high-grade artisanal gold production, associated with large
high-grade mineralised structures.  The recent addition of this
project significantly raises the priority of this area for Serabi,
and as a result, an exploration team was recently mobilised and
drilling commenced.

Situated some 250 kilometres north-west of Palito, Pison is located
in a volcanic geological environment.  Primary exploration targets in
this district are large tonnage, low-grade, gold deposits.
Preliminary geochemical screening of this large land area has now
been completed, with the results confirming the potential for
widespread gold occurrences.

FINANCE

The reduced levels of production during the first half of the year
had a detrimental effect on the revenues of the company and have also
impacted on the unit cash costs. Although the market has seen higher
gold prices achieved during the year compared with 2007, this lower
level of production resulted in revenue against the corresponding
period in 2007 being lower by US$3.1 million and we experienced a
shortfall of US$4.2 million against our budget revenue for the
period.

The LBMA average spot price for gold during the period from January
to June was US$912.  Actual prices realised were US$918 per ounce for
concentrate sales and US$895 for gold bullion which is sold in the
domestic Brazilian market.

The Brazilian Real has continued its appreciation against all major
currencies over the last two years, strengthening against the US
dollar by some 17% in the last twelve months and by 8% compared with
the preceding six month period.  With the majority of the costs being
denominated in Brazilian Real, the dollar reported cost base of
Serabi therefore continues to be subject to escalation as a result of
this currency movement.

Cash costs in US$ terms were US$8.32 million for the six month period
compared with US$8.27 million in the corresponding six month period
in 2007.  However the lower levels of production mean that the cost
per gold equivalent ounce achieved was US$775, compared with the
figure of US$442 for the corresponding period in 2007.  Of this
variance US$90 per gold equivalent ounce is the result of exchange
movements with US$160 resulting from the lower grades and US$222 from
the lower tonnages that have been processed in the period.  In
Brazilian Real terms, operating costs for the period were down by
7%.  With the reduced volumes of mined material this was to an extent
expected, but also reflects the fact that any mining operation of
this nature has a significant fixed cost element.  Overall unit costs
per tonne milled showed an increase of 9.5% to BrR$243 per tonne
compared with average costs for 2007 of BrR$222 per tonne.

Cash holdings at the end of the period of US$9.7 million were in line
with our budget projections, the shortfall in planned revenues being
offset by the expenditure savings resulting from lower levels of mine
development, when compared with our plan, and reductions in the
levels of planned exploration expenditure.

The early part of 2008 was always projected to be a period of capital
investment both in terms of plant and equipment for the mine, mine
development and exploration activity.  The expenditure on plant and
equipment for the mining and process operations was US$3.6 million,
with a further US$1.5 million invested in mine development activities
such as deepening of the access ramps, commencement of the ramp
access towards the Palito West ore body and the cross-cuts to
establish access to the Jatoba and Cedro vein structures within the
Chico da Santa area.

On the exploration front expenditure continued to be focused on the
near mine prospects and some 65% of the total expenditure of US$3.9
million was incurred in and around the Palito area.  Of the
remainder, US$0.7 million was spent on the on-going evaluation of the
Pison tenements, and a further US$0.2 million on the recently
acquired Rio Marupa project .


Graham Roberts                  Mike Hodgson
Chairman                              Chief Executive
29 September 2008

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THIS RELEASE

Enquiries:

Serabi Mining plc

Graham Roberts                  Tel: [phone]
Chairman                        Mobile: [phone]

Clive Line                      Tel: [phone]
Finance Director                Mobile: [phone]

Email: [e-mail]
Website:  www.serabimining.com

Numis Securities Limited
John Harrison                   Tel: [phone]
Nominated Adviser

James Black                     Tel: [phone]
Corporate Broker

Farm Street Communications
Simon Robinson                  Tel: [phone]
Public and Media Relations






CONSOLIDATED INCOME STATEMENT
                                            Group
                            For the six     For the six  For the year
                        months ended 30 months ended 30      ended 31
                              June 2008       June 2007 December 2007
(expressed in US$)          (unaudited)     (unaudited)     (audited)
Revenue                       9,887,239      13,023,940    25,099,118
Operating expenses          (9,499,132)    (10,268,037)  (19,708,212)
Profit from
operations                      388,107       2,755,903     5,390,906
Administration
expenses                    (1,635,070)     (1,552,718)   (3,446,849)
Share-based payments           (89,926)        (73,831)     (177,913)
Write-off of past                                     -
exploration costs             (502,591)                     (628,066)
Depreciation of plant
and equipment                 (983,785)       (781,733)   (1,530,243)
Depreciation of mine
asset                         (502,069)       (344,678)     (795,878)
(Loss) / profit on
ordinary activities
before interest and
other income                (3,325,334)           2,943   (1,188,043)
Foreign exchange gain         1,732,583         145,932     1,725,397
Interest payable              (385,365)       (518,798)   (1,119,116)
Interest receivable             366,874          76,201       586,969
(Loss) / profit on
ordinary activities
before taxation             (1,611,242)       (293,722)         5,207
Taxation                              -       (203,800)     (128,086)
Loss on ordinary
activities after
taxation                    (1,611,242)       (497,522)     (122,879)
Loss per ordinary
share (basic and
diluted)                        (1.29c)         (0.45c)       (0.10c)





CONSOLIDATED BALANCE SHEET
                                              Group
                            As at 30 June As at 30 June      As at 31
                                     2008          2007 December 2007
                              (unaudited)   (unaudited)     (audited)
(expressed in US$)    Notes
Non-current assets
Goodwill                        1,752,516     1,752,516     1,752,516
Development and
deferred exploration
costs                   3       6,461,865     9,666,538    13,254,658
Property, plant and
equipment               4      43,348,962    24,059,435    25,831,006
Total non-current
assets                         51,563,343    35,478,489    40,838,180
Current assets
Inventories             5       3,844,888     2,404,669     3,341,954
Trade and other
receivables                     1,169,402     1,448,417     1,903,452
Prepayments and
accrued income                  3,229,146     1,653,412     2,118,158
Cash at bank and in
hand                    6       9,681,080     1,050,644    18,629,402
Total current assets           17,924,516     6,557,142    25,992,966
Current liabilities
Trade and other
payables                        5,427,102     3,872,369     4,163,638
Accruals                           18,789       671,404        87,111
Interest bearing
liabilities                     1,493,372       661,765       839,986
Total current
liabilities                     6,939,263     5,205,538     5,090,735
Net current asets              10,985,253     1,351,604    20,902,231
Total assets less
current liabilities            62,548,596    36,830,093    61,740,411
Non-current
liabilities
Trade and other
payables                            4,733       124,794        39,896
Provisions                        845,427       710,206       920,135
Interest bearing
liabilities                       771,859       269,079       376,132
Total non-current
liabilities                     1,622,019     1,104,079     1,336,163
Net assets                     60,926,577    35,726,014    60,404,248

Equity
Called up share
capital                 7      25,285,679    19,401,597    25,285,679
Share premium reserve          33,402,649    15,383,298    33,402,649
Option reserve                  3,023,153     2,800,205     2,923,543
Translation reserve             5,533,826     3,222,686     3,499,865
Profit and loss
account                       (6,318,730)   (5,081,772)   (4,707,488)
Equity shareholders'
funds                          60,926,577    35,726,014    60,404,248


The interim financial information has not been audited and does not
constitute statutory accounts within the meaning of Section 240 of
the Companies Act 1985.  The Group statutory accounts for the year
ended 31 December 2007, prepared under IFRS as adopted in the EU,
have been filed with the Registrar of Companies.  The auditors'
report on these accounts was unqualified and did not contain a
statement under Section 237 (2) or 237 (3) of the Companies Act 1985.




CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(expressed in                                                    Profit and
US$)               Share       Share    Share option Translation    loss        Total
(unaudited)       capital     premium     reserve      reserve     account     equity
Equity
shareholders'
funds at 31
December 2006    19,338,351  15,351,674    2,818,722     382,502 (4,693,443)  33,197,806
Foreign
currency
adjustments               -           -            -   2,840,184           -   2,840,184
Loss for the
period                    -           -            -           -   (497,522)   (497,522)
Total
recognised
profit for
the period                -           -            -   2,840,184   (497,522)   2,342,662
Share option
expense                   -           -       90,676           -           -      90,676
Conversion of
options              63,246      31,624    (109,193)           -     109,193      94,870
Equity
shareholders'
funds at 30
June 2007        19,401,597  15,383,298    2,800,205   3,222,686 (5,081,772)  35,726,014
Foreign
currency                  -           -            -                       -
adjustments                                              277,179                 277,179
Profit for
the period                -           -            -           -     374,643     374,643
Total
recognised
profit for
the period                -           -            -     277,179     374,643     651,822
Share option
expense                   -           -      122,979           -           -     122,979
Issue of
ordinary                                           -           -           -
shares            5,884,593  19,419,158                                       25,303,751
Conversion of
options               (511)       (256)          359           -       (359)       (767)
Share issue
expenses                  - (1,399,551)            -           -           - (1,399,551)
Equity
shareholders'
funds at 31
December 2007    25,285,679  33,402,649    2,923,543   3,499,865 (4,707,488)  60,404,248
Foreign
currency
adjustments               -           -            -   2,033,961           -   2,033,961
Loss for the
period                    -           -            -           - (1,611,242) (1,611,242)
Total
recognised
profit for
the period                -           -            -   2,033,961 (1,611,242)     422,719
Share option
expense                   -           -       99,610           -           -      99,610
Equity
shareholders'
funds at 30
June 2008        25,285,679  33,402,649    3,023,153   5,533,826 (6,318,730)  60,926,577





CONSOLIDATED CASH FLOW STATEMENT

                            For the six     For the six  For the year
                        months ended 30 months ended 30      ended 31
                              June 2008       June 2007 December 2007
(expressed in US$)          (unaudited)     (unaudited)     (audited)
Cash outflows from
operating activities
Operating (loss) /          (3,325,334)           2,943   (1,188,043)
profit
Depreciation - plant,         1,485,854       1,126,411     2,326,121
equipment and mining
properties
Option costs                     89,926          73,831       177,913
Write-off of past               502,591               -       628,066
exploration costs
Interest paid                 (385,365)       (518,798)   (1,119,116)
Foreign exchange                366,215       (199,216)     (968,729)
Changes in working
capital
(Increase) / decrease         (151,299)         284,674     (348,915)
in inventories
(Increase) in                  (32,621)       (119,824)     (691,942)
receivables,
prepayments & accrued
income
Increase / (decrease)           597,667       (259,780)     (795,730)
in payables &
accruals
Net cash flow from            (852,366)         390,241   (1,980,375)
operations

Investing activities
Purchase of tangible        (3,669,452)       (673,779)   (1,155,963)
fixed assets
Exploration and             (3,875,826)     (2,410,359)   (6,017,472)
development
expenditure
Interest received               366,874          76,201       586,969
Net cash outflow on         (7,178,404)     (3,007,937)   (6,586,466)
investing activities

Financing activities
Issue of ordinary                     -               -    25,303,751
share capital
Capital element of            (725,808)       (322,452)     (702,689)
finance lease
payments
Conversion of options                 -          94,870        94,103
Payment of share                      -               -   (1,399,551)
issue costs
Net cash (outflow) /          (725,808)       (227,582)    23,295,614
inflow from financing
activities

Net (decrease) /            (8,756,578)     (2,845,278)    14,728,773
increase in cash and
cash equivalents
Cash & cash                  18,529,795       3,791,202     3,791,202
equivalents at
beginning of period
Exchange difference            (92,137)          56,398         9,820
on cash
Cash & cash                   9,681,080       1,002,322    18,529,795
equivalents at end of
period




Notes to the Interim Financial Statements
1.   Basis of preparation
These interim accounts are for the six month period ended 30 June
2008. Comparative information has been provided for the unaudited six
month period to 30 June 2007 and the audited twelve month period from
1 January to 31 December 2007.

The accounts for the period have been prepared in accordance with the
policies which the Group will adopt for its annual accounts, except
as explained in note1(ii), notably:

(i)     Going Concern - the accounts have been prepared on a going
concern basis uncertainty in respect of which is set out below.  On
17 September 2008 the Group announced that the Board had implemented
a strategic review relating to its on-going involvement in the Palito
Mine.  This announcement was taken following the decision of
management of the Group's subsidiary company Serabi Mineraçao
Limitada;
*           to make reductions in the local work-force to reduce
  costs in the light of continued production issues;
*           to limit mining operations in the short term and;
*           to consider placing the Palito mine into a state of care
  and maintenance
As part of this strategic review the Directors are exploring a number
of options including the raising of additional capital which would
permit the company to continue mining operations and/or exploration,
the introduction of joint venture partners for the Palito mining
operations and other exploration activities, and the outright sale of
the Palito mine and other exploration assets.  All of these
activities are at early stages.
The Directors consider that there will be surplus working capital
available to the Group after completion of the re-structuring
programme.  However the Board will need to severely restrict ongoing
activities of the Group to enable it to meet its commitments over the
next twelve months within this level of available working capital.
 Additional funding will be required during this period to undertake
activities that will allow the Group to continue to develop its
exploration assets.  This funding may be realised by the issue of new
shares or through sales of assets but there is no guarantee that such
funding can be realised.

(ii)    Impairment - at this time the Directors consider that whilst,
as a result of their strategic review and their discussions with
other parties, it may be necessary to make a provision in respect of
the carrying value of the Palito Mine in the financial statements,
they have insufficient information available to them, particularly
related to alternative development and mining plans, at this time to
estimate with any certainty the level, if any, of such impairment.
Accordingly the carrying value of the Palito mine and the related
plant and equipment is shown at full cost less accumulated charges
for depreciation, depletion and amortisation.

(iii)   inventories are valued at the lower of cost and net
realisable value;

(iv)   property, plant and equipment is depreciated over its useful
life;

(v)   the Group commenced commercial production at the Palito mine
effective 1 October 2006.  Prior to this date all revenues and
operating costs were capitalised as part of the development costs of
the mine.  Effective from 1 October 2006 the accumulated development
costs of the mine were re-classified as Mining Property costs and
such cost is being amortised over the anticipated life of the mine on
a unit of production basis;
(vi)   revenues are recognised only at the time of sale. Any unsold
production and in particular concentrate is held as inventory and
valued at production cost until sold.

2.   Taxation
Taxation represents a provision for corporate taxes due on taxable
profits arising in Brazil.  No deferred tax asset arising from
carried forward losses incurred outside of Brazil has been recognised
in the financial statements because of uncertainty as to the time
period over which this asset may be recovered.


3. Exploration and development costs
                                        30 June 2008 31 December 2007
                                         (unaudited)        (audited)
Cost
Opening balance                           13,254,658        6,454,074
Exploration and development
expenditure                                3,875,826        6,017,472
Write-off of past
exploration costs                          (502,591)        (628,066)
Exchange                                     765,135        1,411,178
Transfer to tangible assets
(mining property)                       (10,931,163)                -
Balance at end of period                   6,461,865       13,254,658




4. Property, plant and
equipment
                                        30 June 2008 31 December 2007
                                         (unaudited)        (audited)
Cost
Balance at beginning of
period                                    31,325,246       24,685,071
Additions                                  5,049,420        2,013,657
Transfer from intangible
assets                                    10,931,163                -
Exchange                                   3,705,775        4,628,649
Disposals                                          -          (2,131)
Balance at end of period                  51,011,604       31,325,246

Depreciation
Balance at beginning of
period                                   (5,494,240)      (2,481,365)
Charge for period                        (1,564,899)      (2,326,121)
Exchange                                   (603,503)        (687,855)
Eliminated on sale of asset                        -            1,101
Balance at end of period                 (7,662,642)      (5,494,240)
Net book value at 30 June
2008                                      43,348,962       25,831,006





5. Inventories
                                                          31 December
                                30 June 2008 30 June 2007        2007
                                 (unaudited)  (unaudited)   (audited)
Bullion and work in
progress                           1,464,835      693,023     948,437
Consumables                        2,380,053    1,711,646   2,393,517
Inventories                        3,844,888    2,404,669   3,341,954




6. Cash and cash
equivalents
                                                          31 December
                                30 June 2008 30 June 2007        2007
                                 (unaudited)  (unaudited)   (audited)
Cash at bank and in
hand                               9,681,080    1,050,644  18,629,402
Bank overdraft                             -     (48,322)    (99,607)
Cash and cash
equivalents                        9,681,080    1,002,322  18,529,795




7. Share
capital
                                              31 December 31 December
                    30 June 2008 30 June 2008        2007        2007
                     (unaudited)  (unaudited)   (audited)   (audited)
Called up
capital                   Number            $      Number           $
Balance at
beginning
of period            140,139,065   25,285,679 110,751,608  19,338,351
Issue of                       -            -
shares for
cash                                           29,069,768   5,884,593
Exercise of                    -            -
options                                           317,689      62,735
Balance at
end of
period               140,139,065   25,285,679 140,139,065  25,285,679

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