1st Quarter Results - correction

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:

- Delays to new mining equipment have contributed to lower Q1
production of 4,985 oz gold equivalent

- The arrival of key mining equipment is forecast to have a material
positive impact on production during the rest of 2008 

- Implementation of a revised mine plan and optimisation of the
mining method at Palito expected to enhance productivity and mine
grades 

- New areas of high-grade mineralisation on the PMZ and adjacent
structures to contribute to production

- Geophysical survey indicates eight previously undetected large
targets

Following last year's mining problems, we look forward to a much
improved 2008. The focus is on profitable, quality production as well
as establishing a detailed understanding and quantification of the
wider ore potential in the Palito / Jardim do Ouro district. 
However, the first quarter has been very disappointing operationally.
New equipment scheduled to be delivered early in the period was
seriously delayed as the manufacturers were unable to adhere to their
production schedules.
 
This delay came at the same time that we experienced an abnormal
level of downtime with existing equipment. This limited our drilling
capability in the early part of the period and in particular our
ability to mine the higher grade stoping blocks.  The affected
equipment is now operational again and the arrival of additional
equipment will limit the future impact in the unlikely event of
similar problems.
 
After these setbacks we are now pleased to announce that this
important mining equipment has now started to arrive at site and much
improved results are now anticipated.  The first two mini-scoops and
the first drilling mini- jumbo arrived on site in April and will be
followed by a number of other key items during the rest of the second
quarter.  The introduction of this equipment and revised mining plans
are expected to lead to a significant escalation of production during
the rest of the year.

Palito - Operating Results (1)
                        2008   2007
                        Q1     Q1     Q4
Total Mined         t   57,542 55,251 56,926
(per day)               (632)  (614)  (619)
Mined Ore           t   33,022 42,217 41,148
(per day)               (363)  (469)  (447)
Milled              t   32,479 42,705 40,481
(per day)               (357)  (475)  (440)
Head Grade          g/t 4.52   6.50   5.40
Recovery            %   89.00  89.60  89.80
Gold                oz  4,217  8,044  5,989
Copper              t   85.80  125.60 110.40
Gold Equivalent (2) oz  4,985  9,301  7,069

 

 
Operations and Outlook
As discussed in the Q4 2007 Investor Update, the main goal in 2008 is
to produce some 40,000 of gold equivalent ounces at sub $400/oz AuEq
cash costs, through the following measures: 
 
-         Expanding the mining fleet with specialised narrow-vein
mining equipment
-         Improved mine planning, management systems and personnel
training

The introduction of specialised narrow-vein, "slim-size" machines
will enable mechanised mining of narrower development drifts, with
the overall aim of reducing mining widths in ore from 1.8m to an
average of 1.2m, thus greatly benefitting mined ore grades.  The
range of slim-size machines coming to Palito includes two new
drilling rigs (mini-jumbos), one for face drilling and a second for
long-hole stoping and four narrow scoops (mini-scoops) to complement
the three existing larger scoops already in operation.  Despite our
best efforts to obtain the equipment from the manufacturers as
quickly as possible, we suffered severe delays in delivery which had
a direct and adverse effect upon Q1 production.  This was further
compounded by the failure of some of the existing equipment, which
only made the delays in the delivery of new equipment harder to
tolerate.  These failures impacted primarily on activity in January
and February but with the return to operation of this equipment
during March, mine production has now improved.
 
Despite these production difficulties, considerable success was
achieved over the quarter in optimising the long-hole stoping
technique, which last year proved to be problematical.  Narrow
stoping widths of 1.2m are now being achieved and at times, where
required, even narrower.  The combination of improved long-holing and
the use of specialized narrow-vein mining equipment is forecast to
bring greater selectivity and improved grades. Planning for the year
anticipated the possibility that Q1 2008 production might be
adversely affected by these delays and we remain optimistic that the
2008 targets of approximately 40,000 oz AuEq at costs of sub $400/oz
AuEq can be met with the following key actions now in progress:
 
*          Staged delivery of additional mining fleet
*          The mining of the Ruari's Ridge oxide deposit by open pit
*          Continued refurbishment of the process plant to maximise
  its capability in preparation for latter part of 2H 2008
 
Exploration
During mid-2007, a decision was taken to escalate and focus
exploration activities on assessing the full potential of the Jardim
do Ouro (JdO) district, with the objective of turning exploration
success into production ounces as quickly as possible.  As a result,
the company increased its efforts on the near-mine area, and during
Q1 2008 over 9,000m of drilling was completed across known near-mine
prospects. 
Besides drilling activity, and as reported in January, the company
completed its most ambitious exploration activity to date by flying a
6,000 hectare, helicopter-borne electromagnetic (VTEM) geophysical
survey at the start of the year.  The results have now been received
and the initial review indicates potential for an additional eight
mineralised bodies within the Jardim do Ouro district.  Detailed
analysis of the results is ongoing but an initial drilling campaign
on selected targets is due to commence during this quarter.
With the deployment of new mining equipment, refinement of the mining
method to improve ore quality and additions to the mine management
team, we believe we are now well placed to achieve significant
production improvements during the rest of 2008.  Furthermore, it is
hoped that during the year we can significantly advance our existing
prospects and the new near-mine exploration prospects being
generated.  If successful we should be in a position to expand
geological resources and during the next twelve months make
investment decisions to increase future gold production. This will
place Serabi on a strong footing to reach its goal of becoming a well
established, emerging producer.
 

 

Graham Roberts - Chairman

Mike Hodgson - CEO

 

Enquiries

Serabi Mining plc:

 

Graham Roberts       Tel: [phone]

Chairman             Mobile: [phone]

 

Mike Hodgson         Tel: [phone]

CEO                  Mobile: [phone]

 

Clive Line           Tel: [phone]

Finance Director     Mobile: [phone]

 

Robyn Hodson         Tel: [phone]

Investor Relations 

E-mail:              [e-mail]

Website:             www.serabimining.com

Numis Securities Limited:

John Harrison          Tel: [phone]

James Black            Tel: [phone]

Farmstreet Communications:

Simon Robinson         Tel: [phone]

 

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.

Serabi has a significant exploration programme focused on the Tapajos
region, operates four surface drilling rigs and has its own assay
laboratory.

 

---END OF MESSAGE---




http://hugin.info/137617/R/1212319/251564.pdf