Audited Results for the year ended 31 December ...

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

  Audited Results for the year ended 31 December 2009 and announcement of AGM

Serabi, the AIM-traded gold exploration and production company, today releases
audited results for the year ended 31 December 2009.  It also advises that its
Annual General Meeting will be held at 9.30am on 29th June 2009 at the offices
of Farrer & Co, 66 Lincoln's Inn Fields, London WC2A 3LH.  Notice of the AGM is
set out in the Company's Annual Report which is being mailed to shareholders.

A PDF version of Serabi's Annual Report for 2009 incorporating the full audited
financial statements, will shortly be available from the Company's website -
www.serabimining.com

The following information, comprising the Chairman's Review, the Finance Review,
the Income Statement, the Group Balance Sheets, Group Statement of Changes in
Shareholders' Equity and Group Cash Flows, is extracted from these financial
statements.



CHAIRMAN'S REVIEW

I  believe that the Company has over  the past year made significant progress in
re-building  itself.  It has always been our  belief that the Tapajos region has
significant  potential.  While to date the  task of identifying and proving this
potential  has rested with a  number of junior companies,  Eldorado Gold, a well
established mid-tier Canadian gold producer, became the first major gold company
to take a significant position in the region when, earlier this month, it agreed
an all paper acquisition of TSX-V listed Brazauro Resources Corp. at a valuation
equivalent  to approximately C$122 million.  Brazauro's Tocantinzinho project is
located  some 55 kilometers to the northwest of  Palito.  This is the first real
sign  of a  major gold  company entering  the Tapajos  and thereby endorsing the
potential of this undoubted future goldfield.

In  2009, I noted that  the changed economic  environment had led to significant
new  challenges and uncertainties for all.  This  time last year the markets for
most  metals were depressed, currency markets were volatile and finance from the
capital  markets  was  very  limited  at  best.  It has therefore been a welcome
surprise  that as  of today  many metal  prices have  returned to close to their
pre-crisis  levels,  investment  has  returned  to the developing countries with
direct  consequence for their currencies and stock markets have regained much of
their  lost ground. However, despite evidence of recovery, there is still a long
road ahead.

Last  year it was clear  that companies would have  to work much harder to raise
money  and  management  would  need  to  be  more creative to source equity from
non-traditional  sources and institutional-based  investors.  The financing that
Serabi  completed  at  the  end  of  last  year reflected this and the Company's
management engaged in initiatives across Europe, the Far East and South America.
From the resulting outcome I am very pleased to welcome Greenwood Investments as
a  significant strategic investor  in Serabi and,  furthermore, that through the
accompanying  Open Offer it was also possible to enable our smaller shareholders
to participate in the financing on the same terms.

The  success of the  financing has significantly  improved the prospects for the
Company.   At the time of the Annual Report  last year we expected that the most
likely  outcome  for  Palito  remained  some  form of joint venture or disposal,
whereby  control would  have inevitably  passed to  another group  and moved the
future  potential value outside of our control.   I am therefore pleased that we
now  have the opportunity  to pursue a  disciplined strategy that  we believe is
right for the project and which if results are as we hope, should yield the best
value for shareholders.

We  have essentially returned Serabi to being an exploration company for now but
history  shows that for junior  companies this can be  where the biggest returns
can be made for shareholders.  Last year's funding now enables the management to
start  to  unlock  the  potential  value  of the considerable technical base and
exploration  results  already  established  at  Palito,  with  the  objective of
targeting  an expanded resource base of at least 1.5 million ounces, which could
then lead to the redevelopment of a larger, more robust mining operation.

Capital  markets remain, however,  mostly subdued and  very cautious towards new
equity  or debt, this being particularly reflected in the very limited number of
IPOs  on AIM.  While some  overseas capital markets are  showing signs of faster
recovery and an appetite for smaller company resource stocks, the AIM market has
suffered  a more protracted  downturn and there  continues to be limited finance
available  for the small-cap growth  companies, although sentiment has certainly
improved year-on-year.

This  also reflects the continuing disparity in the relative valuations ascribed
to  mining  companies  listed  in  different  jurisdictions.   Recent investment
research  of the  mining sector  indicates that  UK listed exploration companies
trade  at  significantly  lower  valuations  per  ounce  of  resource than their
Canadian  and  Australian  listed  peers;  a  pattern not untypical prior to the
2004-2007 boom  on AIM.  Certainly some of  these countries were less exposed to
the  global downturn and with the improvements  in metal and oil prices on which
these  economies  have  a  greater  dependency,  investor sentiment appears more
favourable  than here in the UK.  The  requirement for management to explore new
funding sources, including overseas markets, therefore remains.


2009 was  certainly a  year of  two contrasting  halves for  Serabi, fortunately
finishing  on a  more optimistic  note. The  challenges we  faced last year were
substantial  and the credit for a successful conclusion to the year should go to
the  management team, who I  thank for their hard  work, dedication and loyalty.
 The  Company  continues  to  face  many  challenges  over  the  coming year but
thankfully now from a much improved position.

FINANCE REVIEW

Much of the past year has been one of significant uncertainty and the long term
financial position of the Group for much of the time was a cause for concern.
 It is therefore very pleasing to report that as a Group we ended 2009 in a much
stronger position than we started, thus able to exercise greater control over
our destiny.  As with any exploration company we will be dependent on raising
new capital to advance our projects and will have to exercise sound judgement
over these future capital requirements as we strive to maximise the returns for
shareholders.  As primarily an exploration company the use of our cash and
control over expenditures therefore becomes keener than ever.

We have reported an overall operating loss for the year of US$10 million,
however this result is comprised mostly of non-cash elements of US$7.7 million,
consisting primarily of depreciation and impairment charges which were adversely
impacted by significant currency appreciation.  More importantly the cash
consumed by the Group on operations during 2009, as shown in the cash flow
statements, was approximately US$1.5 million.

At Palito the operation generated a small loss at the operating level of
US$242,000.  Given the uncertainty that surrounded its future at the start of
2009, this result is a testament to the hard work and commitment shown by the
mine staff to make the oxide mining operation work.  Last year administration
expenses were reduced by some US$2 million year-on-year and of the total cost
some US$265,000 was settled through the issue of shares in lieu of contractual
obligations in order maximise cash available for the Company.

The Brazilian Real, having weakened dramatically at the end of 2008,
subsequently regained much of its lost ground last year.  Having started the
year at a rate of BrR$2.356 to the US$ it closed at BrR$1.7412, an appreciation
of 26%.  This has impacted significantly on the balance sheet of the Group and
is the prime factor behind the requirement for the Group to recognise an
impairment charge on the carrying value of the Palito Mine at the end of  the
year.  The underlying NPV of the future anticipated cash flows is estimated to
be slightly higher than was calculated at the end of 2008.  However, the book
value of the mine assets (the majority of which are denominated in Brazilian
Real) have increased by over  US$6 million year-on-year before the impairment
charge, notwithstanding any asset disposals or additional depreciation charge
for the calendar year.  This increase in the gross book value of the mine assets
in US dollar terms is entirely due to the year-on-year exchange rate movement.

The appreciation of the Real has also impacted heavily on other areas of the
balance sheet. In respect of our current assets and current liabilities, the
majority of these are also denominated in Brazilian Real (with the exception of
cash) but the dollar movements need to be viewed whilst recognising that the
underlying values in Brazilian Real are relatively unchanged.  In the early part
of 2009 we were able to negotiate settlement terms in respect of equipment that
was subject to leasing arrangements, eliminating the associated on-going
liabilities and thus assisting cash flow greatly during the year.

We have also increased the provision carried for rehabilitation and restoration
costs at Palito.  Again this is primarily driven by exchange rate movements, as
the underlying cost estimates in Brazilian Real are unchanged.  This provision
is calculated based on the present value of the future expenditures.  The
reduced interest rates in Brazil have also impacted on the discount factor used
for this calculation and therefore increased the overall dollar estimate of this
future potential liability.

The issue of new equity at the end of the year raised net proceeds for the
Company of US$4.27 million.  The total net value of shares issued was US$4.43
million the difference arising as some of the shares issued and some of the
costs associated with the share issue were non-cash transactions.

As part of the financing that was completed at the end of 2009, the Company
issued a small convertible loan stock instrument, which was subscribed for by
Greenwood Investments Limited, who also hold a 27.5% interest in the share
capital of the Company.  The loan is for £300,000 and further details relating
to this loan stock are set out in Note 16.  International Accounting Standard
Number 32 requires that where a company issues a financial instrument that is a
blend of debt and equity, the company is required to account for this and
allocate appropriate values to the debt and equity components.  Under the rules
of IAS32 the debt component has therefore been accounted for as a non-current
liability, whilst the equity component is accounted for as Other Reserves within
Equity Shareholders' Funds.

At the end of 2009, the Company, the Directors and some employees agreed to
cancel all of their existing share options.  This has resulted in a transfer
from the share option reserve to the profit and loss reserve of US$1.7 million.
 This represents the charge that was originally made to the profit and loss
account, as calculated in accordance with IFRS2 and using the Black Scholes
method to reflect the implied value of these options.  Under IFRS2, whilst the
original charge is recorded on the face of the profit and loss account, the
subsequent reversal on their cancellation (as opposed to exercise) must be
accounted for as a reserve movement and not as a write back to the profit and
loss.  New options were issued at the end of the year, which under IFRS2 and
using the Black Scholes method resulted in a charge of US$47,610 being recorded
in the financial statements in respect of these options.  A further charge of
US$119,813 has been recorded in these accounts in respect of options issued in
prior periods.

The company's immediate future lies in the success of our exploration activity,
which in turn will drive our need to secure the necessary capital to continue to
advance our projects towards development.  We will continue to look at all forms
of funding and are only too aware that we cannot rely upon traditional capital
markets to be available when we need them.  We also intend to continue to seek
joint venture partners where favourable terms can be negotiated and will
continue to explore the possibility of locally sourced "soft loans" in order to
minimize equity dilution for shareholders.  Our over-riding concern is to
maximise the value that we can add to our projects, whilst, with proper
consideration of the risk and proper exploration process, achieving this with
the lowest possible level of funding.  In this way we will maximise the returns
for our shareholders.

Enquiries:

Serabi Mining plc

Clive Line                                                 Tel: [phone]

Finance Director                                           Mobile: [phone]





Email:[e-mail]
<mailto:[e-mail]>

Website:  www.serabimining.com
<

http://www.serabimining.com/>



Beaumont Cornish Limited
Nominated Adviser and Broker

Roland Cornish                                             Tel: [phone]

Michael Cornish                                            Tel: [phone]



Farm Street Communications
Public Relations

Simon Robinson                                             Mobile: [phone]
[e-mail]                         Tel: [phone]
<mailto:[e-mail]>


Consolidated Income Statement
For the year ended 31 December 2009
                                                    Group
                             ---------------------------------------------------
                                For the year ended 31     For the year ended 31
                                              December                  December
                                                  2009                      2008
(expressed in US$)
--------------------------------------------------------------------------------


Revenue                                      5,512,804                16,523,577

Operating expenses                         (5,755,002)              (16,964,067)
--------------------------------------------------------------------------------
Gross loss                                   (242,198)                 (440,490)

Administration expenses                    (1,851,937)               (3,740,134)

Share-based payments                         (147.038)                 (123,498)

Write-off of past                            (495,138)               (1,174,269)
exploration costs

Increase in rehabilitation                   (346,000)                         -
provision

(Loss)/gain on asset                         (181,237)                    11,804
disposals

Impairment                                 (4,438,048)                         -

Depreciation of plant and                  (2,157,026)               (2,132,633)
equipment

Depreciation of mine asset                           -                 (997,473)
--------------------------------------------------------------------------------
Operating loss                             (9,763,622)               (8,596,693)

Foreign exchange loss                         (14,533)               (1,629,138)

Interest payable                             (215.916)               (1,219,107)

Interest receivable                              3,569                   471,283
--------------------------------------------------------------------------------
Loss before taxation                       (9,990,502)              (10,973,655)

Taxation                                             -                         -
--------------------------------------------------------------------------------
Loss for the period from
continuing operations (1)                  (9,990,502)              (10,973,655)
(2)
--------------------------------------------------------------------------------


Other comprehensive income
(net of tax)

Exchange differences on                     10,072,895              (11,303,603)
translating foreign
operations
--------------------------------------------------------------------------------
Total comprehensive income                      82,393              (22,277,258)
/ (loss) for the period (2)
--------------------------------------------------------------------------------


Loss per ordinary share                        (6.16c)                   (7.83c)
(basic and diluted)
--------------------------------------------------------------------------------

(1) All revenue and expenses arise from continuing operations
(2) The Group has no minority interests and all income/(losses) are attributable
to the equity holders of the Parent Company

Balance Sheets
As at 31 December 2009
                                                         Group
                                            ------------------------------
 (expressed in US$)                                   2009           2008
--------------------------------------------------------------------------

--------------------------------------------------------------------------


 Non-current assets

 Goodwill                                                -      1,752,516

 Development and deferred exploration costs      6,880,038      5,351,921

 Property, plant and equipment                  35,327,788     31,620,364

 Investments in subsidiaries                             -              -

 Other receivables                                       -              -
--------------------------------------------------------------------------
 Total non-current assets                       42,207,826     38,724,801
--------------------------------------------------------------------------
 Current assets

 Inventories                                     1,259,764        931,413

 Trade and other receivables                       275,538        992,698

 Prepayments                                     1,413,158      1,401,627

 Cash at bank and in hand                        4,081,882      1,538,956
--------------------------------------------------------------------------
 Total current assets                            7,030,342      4,864,694
--------------------------------------------------------------------------
 Current liabilities

 Trade and other payables                        4,170,712      3,197,543

 Accruals                                          122,269        136,762

 Interest bearing liabilities                       80,499      1,046,936
--------------------------------------------------------------------------
 Total current liabilities                       4,373,480      4,381,241
--------------------------------------------------------------------------
 Net current assets                              2,656,862        483,453
--------------------------------------------------------------------------
 Total assets less current liabilities          44,864,688     39,208,254
--------------------------------------------------------------------------
 Non-current liabilities

 Trade and other payables                           68,873         25,467

 Provisions                                      1,374,200        735,905

 Interest bearing liabilities                      216,898        182,340
--------------------------------------------------------------------------
 Total non-current liabilities                   1,659,971        943,712
--------------------------------------------------------------------------
 Net assets                                     43,204,717     38,264,542
--------------------------------------------------------------------------


 Equity

 Called up share capital                        26,848,814     25,285,679

 Share premium reserve                          36,268,991     33,402,649

 Option reserve                                  1,523,444      3,061,095

 Other reserves                                    260,882              -

 Translation reserve                             2,269,157    (7,803,738)

 Profit and loss account                      (23,966,571)   (15,681,143)
--------------------------------------------------------------------------
 Equity shareholders' funds                     43,204,717     38,264,542
--------------------------------------------------------------------------






Statements of Changes in Shareholders' Equity
For the year ended 31 December 2009

                                          Share
(expressed in      Share      Share      option           Translation
US$)             Capital    premium     reserve    Other      reserve  Accumulated
Group                                           reserves                    Losses Total equity
-----------------------------------------------------------------------------------------------


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            -          -           -        - (11,303,603)            - (11,303,603)

Loss for year          -          -           -        -            - (10,973,655) (10,973,655)
-----------------------------------------------------------------------------------------------
Total
comprehensive
income for
the year               -          -           -        - (11,303,603) (10,973,655) (22,277,258)

Share option
expense                -          -     137,552        -            -            -      137,552
-----------------------------------------------------------------------------------------------
Equity
shareholders'
funds at 31
December 2008 25,285,679 33,402,649   3,061,095        -  (7,803,738) (15,681,143)   38,264,542
-----------------------------------------------------------------------------------------------
Foreign
currency
adjustments            -          -           -        -   10,072,895            -   10,072,895

Loss for year          -          -           -        -            -  (9,990,502)  (9,990,502)
-----------------------------------------------------------------------------------------------
Total
comprehensive
income for
the year               -          -           -        -   10,072,895  (9,990,502)       82,393

Issue of new
ordinary
shares         1,563,135  3,129,079           -        -            -            -    4,692,214

Costs
associated
with issue of
new ordinary
shares                 -  (262,737)           -        -            -            -    (262,737)

Equity
portion of
convertible
loan stock             -          -           -  260,882            -            -      260,882

Cancellation
of share
options                -          - (1,705,074)        -            -    1,705,074            -

Share option
expense                -          -     167,423        -            -            -      167,423
-----------------------------------------------------------------------------------------------
Equity
shareholders'
funds at 31
December 2009 26,848,814 36,268,991   1,523,444  260,882    2,269,157 (23,966,571)   43,204,717
-----------------------------------------------------------------------------------------------




Cash Flow Statements
For the year ended 31 December 2009
                                                     Group
                               -------------------------------------------------
                                 For the year ended 31    For the year ended 31
                                               December                 December
                                                   2009                     2008
(expressed in US$)


--------------------------------------------------------------------------------
Cash outflows from operating
activities

Operating loss                              (9,763,622)              (8,596,693)

Depreciation - plant, equipment
and mining properties                         2,157,026                3,130,106

Impairment charges                            4,343,048                        -

Increase in rehabilitation
provision                                       346,000                        -

Loss on sale of assets                          181,237                        -

Option costs                                    167,423                  123,498

Share based payment expense                     334,897                        -

Write-off of past exploration
costs                                           495,138                1,174,269

Interest paid                                 (215,916)              (1,219,107)

Foreign exchange                              (650,272)              (1,496,018)

Changes in working capital

Decrease/(increase) in
inventories                                         452                2,024,099

Decrease/(increase) in
receivables, prepayments and
accrued income                                1,179,755                1,049,230

Decrease/increase in payables,
accruals and provisions                        (96,684)                    3,019
--------------------------------------------------------------------------------
Net cash flow from operations               (1,521,428)              (3,807,597)
--------------------------------------------------------------------------------
Investing activities

Proceeds of sale of fixed
assets                                        1,220,691                   23,393

Purchase of property, plant and
equipment                                      (74,578)              (5,608,449)

Exploration and development
expenditure                                   (620,490)              (5,248,892)

Capital and loan investments in
subsidiaries                                          -                        -

Interest received                                 3,569                  471,283
--------------------------------------------------------------------------------
Net cash outflow on investing
activities                                      529,192             (10,362,665)
--------------------------------------------------------------------------------
Financing activities

Issue of ordinary share capital               4,266,740                        -

Capital element of finance
lease payments                                1,178,381              (1,402,482)

Issue of convertible loan stock                 477,780                        -

Payment of share issue costs                  (172,250)                        -
--------------------------------------------------------------------------------
Net cash (outflow)/inflow from
financing activities                          3,393,889              (1,402,482)
--------------------------------------------------------------------------------
Net increase/(decrease) in cash
and cash equivalents                          2,401,653             (15,572,744)

Cash and cash equivalents at
beginning of period                           1,538,956               18,529,795

Exchange difference on cash                     141,273              (1,418,095)
--------------------------------------------------------------------------------
Cash and cash equivalents at
end of period                                 4,081,882                1,538,956
--------------------------------------------------------------------------------





Notes

1.General Information
The financial information set out above for the years ended 31 December 2009 and
31 December  2008 does not constitute  statutory accounts as  defined in Section
434 of  the Companies Act  2006, but is derived  from those accounts. Whilst the
financial  information  included  in  this  announcement  has  been  compiled in
accordance  with  International  Financial  Reporting  Standards  ("IFRS")  this
announcement  itself does not contain sufficient financial information to comply
with  IFRS. A copy of the statutory  accounts for 2008 has been delivered to the
Registrar  of Companies and those for 2009 are being posted to shareholders. The
full  audited  financial  statements  contained  within  its  Annual  Report and
Accounts 2008 do comply with IFRS.

2.Auditors Opinion
The auditors have issued an unqualified opinion in respect of the financial
statements which does not contain any statements under the Companies Act 2006,
Section 498(2) or Section 498(3).  The Auditors have raised an Emphasis of
Matter in relation to Going Concern as follows:
"In forming our opinion on the financial statements, which is not qualified, we
have considered the adequacy of the disclosure made in note 1(a) to the
financial statements concerning the group and the company's ability to continue
as a going concern. The Company is pursuing plans to raise further finance
through a number of routes in order to meet its working capital requirements and
is currently progressing these however none of these have yet been completed.
This along with other matters explained in note 1(a) to the financial
statements, indicate the existence of a material uncertainty which may cast
significant doubt about the group and company's ability to continue as a going
concern. The financial statements do not include the adjustments that would
result if the group and company were unable to continue as a going concern."

The  auditors  issued  an  unqualified  report  in respect of the 2008 Financial
Statements  but raised  an Emphasis  of Matter  in relation  to Going Concern as
follows:
"In forming our opinion, which is not qualified, we have considered the adequacy
of the disclosure made in note 1(a) to the financial statements concerning the
Company's and the Group's ability to continue as a going concern. The group
incurred a net loss of £10,973,655 during the year ended 31 December 2008 and
the ability of the Company's Brazilian subsidiary to continue operations is
dependent on continuing to manage its existing liabilities and maintaining
current production levels, pending either the receipt of new funding or a sale
of the business by the Company. These conditions, along with the other matters
explained in note 1(a) to the financial statements, indicate the existence of a
material uncertainty which may cast significant doubt about the Company's and
the Group's ability to continue as a going concern. The financial statements do
not include the adjustments that would result if the Company and the Group was
unable to continue as a going concern."

NB  : The reference  to note 1(a) in  the above is  a reference to  the Basis of
Preparation  note  contained  within  the  Financial  Statements  from which the
extracts reproduced below referring to Going Concern and Impairment are taken

3.Basis of preparation
The  financial information has been prepared  in accordance with the recognition
and   measurement   criteria  of  International  Financial  Reporting  Standards
("IFRSs")  and with IFRSs as adopted for use in the European Union. Attention is
drawn  to  the  detailed  disclosures  made  in the audited Financial Statements
regarding  the Basis of Preparation and  in particular the following disclosures
extracted  directly from  the audited  Financial Statements  in respect of Going
Concern and Impairment.

"Going Concern
Following a review of the Company's financial position and its budgets and
plans, the Directors have concluded that sufficient financial resources will be
available to meet the Company's current and foreseeable working capital
requirements, this being a period of not less than twelve months from the date
of signing these financial statements. On this basis, they consider it
appropriate to prepare the financial statements on the going concern basis. The
Company is pursuing plans under which it is seeking to secure additional funding
through a number of routes including a plan to secure a loan from
Superintendencia do Desenvolvimento da Amazonia ("SUDAM") a government body
responsible for assisting business development in the Amazon region of Brazil.
 Although not all of these potential sources of funding are guaranteed and in
particular the potential loan from SUDAM remains subject to certain conditions
which the Group may not be able to fulfill, the Directors are confident that
additional equity or loan funding will be available as required and that there
remains sufficient flexibility to in plans to be able to restrict future
expenditure if needed.


Impairment
The Directors have undertaken a review of the carrying value of the mining and
exploration assets of the Group, and considered the implications of the
operational difficulties experienced and the current operational status of
Palito. Following this review they have assessed the value of the existing
assets on the basis of value in use involving a future recommencement of
underground mining operations which is dependent on the ability of the Group to
raise future finance and to operate the mine in line with the mine plan that
forms the basis of the value in use calculation. The carrying values of assets
have not been adjusted to reflect a failure to raise sufficient funds, only
maintaining the current levels of operation or that if a sale transaction were
undertaken the proceeds may not realise the value as stated in the accounts."


4.Earnings per share

The calculation of the basic loss per share of 6.16 cents per share is based on
the loss attributable to ordinary shareholders of $9,990,502 and on the weighted
average number of ordinary shares of 162,309,378 in issue during the period.


5.Development and Deferred Exploration costs
                                               31 December 2009 31 December 2008

                                                              $                $
--------------------------------------------------------------------------------
Cost

Opening balance                                       5,351,921       13,254,658

Exploration and development expenditure                 640,875        5,248,892

Write-off of past exploration costs                   (495,138)      (1,174,269)

Exchange                                              1,570,728      (1,617,946)

Transfer to tangible assets (plant and                (188,348)     (10,359,414)
equipment)
--------------------------------------------------------------------------------
Total as at end of period                             6,880,038        5,351,921
--------------------------------------------------------------------------------

The  value  of  these  investments  is  dependent  on the development of mineral
deposits.


6.Tangible Assets
                             Land and
                            buildings                     Plant and
                                                          equipment
                            - at cost  Mine Asset         - at cost        Total

                                    $           $                 $            $
--------------------------------------------------------------------------------
Cost

Balance at 31
December 2008               2,052,278  24,077,127        12,165,687   38,295,092

Additions                           -     209,000            74,578      283,578

Transfer from
development and
deferred
exploration costs                   -           -           188,348      188,348

Exchange                    1,856,322   7,047,290         2,660,937   11,564,549

Disposals                           -           -       (1,764,676)  (1,764,676)
--------------------------------------------------------------------------------
At 31 December 2009         3,908,600  31,333,417        13,324,874   48,566,891
--------------------------------------------------------------------------------
Depreciation

Balance at 31
December 2008             (1,227,098) (1,699,137)       (3,748,493)  (6,674,728)

Charge for period           (494,401)           -       (1,662,625)  (2,157,026)

Impairment charge            (86,130) (2,037,683)         (466,719)  (2,590,532)

Exchange                    (824,774)   (500,561)       (1,055,558)  (2,380,893)

Eliminated on sale
of asset                            -           -           564,076      564,076
--------------------------------------------------------------------------------
At 31 December 2009       (2,632,403) (4,237,381)       (6,369,319) (13,239,103)
--------------------------------------------------------------------------------
                            1,276,197  27,096,036         6,955,555   35,327,788
--------------------------------------------------------------------------------
Net book value at
31 December 2008              825,180  22,377,990         8,417,194   31,620,264
--------------------------------------------------------------------------------

Included  in Plant and equipment, are  assets acquired under finance leases with
net book value of US$237,272 (200:US$1,197,619).  The associated liabilities are
secured by the lessor's title to the leased assets.


7.Impairment
The Directors have considered each of the Group's exploration and development
assets on a project-by-project basis. It has considered three general cash
generating units for the purpose of this assessment. These are:



<li>the Palito mine itself including the pre-operating cost, exploration
expenditures on establishing the current declared reserve and resource base,
land and buildings and plant and machinery associated with the mining operations



<li>exploration expenditures on areas within the Palito environs but which have
not yet been exploited and do not form part of the current declared reserves and
resources; and



<li>exploration expenditures on other tenements.



Following this review and making estimates of the value in use, the Directors
have concluded that an impairment charge against the carrying value of the
assets of the Group relating to the Palito mine is required.  The Directors have
concluded that the estimated value in use is US$35,287,719 compared with the
carrying value of the assets of the cash generating group of US$39,630,767.



In accordance with IAS 36 - Impairment of Assets, any impairment must first be
applied against any goodwill allocated to the unit that is impaired and
thereafter allocated to the other assets of the unit pro-rata on the basis of
the carrying amount of each asset in the unit.



The carrying value for the Group of the Palito cash generating unit comprises:

                          Carrying Value Impairment provsion      Carrying value
                       before impairment                        after impairment

                                     US$                 US$                 US$
--------------------------------------------------------------------------------
Goodwill                       1,752,516           1,752,516                   -

Mining Property               29,133,719           2,037,683          27,096,036

Land and Buildings             1,362,327              86,130           1,276,197

Plant and Equipment            7,422,274             466,719           6,915,486
--------------------------------------------------------------------------------
                              39,670,836           4,343,048          35,287,719
--------------------------------------------------------------------------------

No impairment provision has been made in respect of any of the other cash
generating units.





8.Inventories

                                31 December 2009   31 December

                                               $          2008

                                                             $
---------------------------------------------------------------
 Bullion and work in progress                  -       100,821

 Consumables                           1,259,764       830,592
---------------------------------------------------------------
                                       1,259,764       931,413
---------------------------------------------------------------



9.Cash and cash equivalents
                            31 December 2009   31 December 2008

                                           $                  $
                          --------------------------------------
 Cash at bank and in hand          4,081,882          1,538,956

 Bank overdrafts                           -                  -
                          --------------------------------------
 Net cash holdings                 4,081,882          1,538,956
                          --------------------------------------






Annual Report
The  Annual Report is being posted to shareholders on 3rd June 2009.  Additional
copies  will be  available to  the public,  free of  charge, from  the Company's
offices  at  2nd floor,  30 -  32 Ludgate  Hill,  London,  EC4M  7DR and  may be
downloaded     from     the     Company's     website     atwww.serabimining.com
<

http://www.serabimining.com/>.



[HUG#1419373]