Half-yearly report

SERABI MINING plc ("Serabi" or "the Company)
        Interim Results for the six months ended 30 June 2007


Highlights

*          Completion of £12.5 million placing provides strengthened
  foundation for resource and production growth
*          Exploration success points to wider potential and basis
  for short-term production expansion
*          First half production of 18,718 ounces gold equivalent
  represents a 6% year-on-year improvement
*          Mining volumes and plant throughput are at record levels
*          Further improvements to mining and mill productivity are
  anticipated during the remainder of 2007
*          Changes to mining methods introduced with noticeable
  benefits anticipated at the end of the year
*          Management changes reflect the Company's changing status
  to a producer with significant exploration    opportunities
*          Operating profits being generated by the Palito mine.
  EBITDA for the six months of US$1.1 million
      (2006 - calendar year loss of US$0.8 million)

Report of the Chairman and Chief Executive

Having achieved commercial production at the Palito gold mine last
October, the first half of 2007 has brought with it a number of
important successes that highlight the company's future potential and
at the same time a number of new challenges.  Taken together, Serabi
has established a strong platform and is now ready to move forward to
the next stage, which is intended to position the company for
significant growth.

Exploration and Development
Without doubt the exploration success we have previously reported at
Jardim do Ouro over the Ruari's Ridge, Chico da Santa and Palito West
prospects, is one of the highlights of the period and provides
tangible evidence of the wider potential of the Jardim do Ouro
district.  We are confident that as we step further away from the
Palito Main Zone, we will continue to discover new prospects of
similar character which can serve as satellite mining operations for
a central plant and a basis for resource and production growth.

With this objective in mind, we successfully completed the placing of
new ordinary shares in July to raise gross proceeds of US$25
million.  Combined with cash flow from current operations, the funds
will in part allow us to evaluate in detail the Ruari's Ridge, Palito
West and Chico da Santa prospects.  We would anticipate that a
successful evaluation will enable Serabi to introduce production from
these prospects into our planning for 2008, leading to an annualised
production rate of some 60,000 ounces gold equivalent during the
year. .

At the same time we are significantly stepping up our exploration
programme across the wider Jardim do Ouro district and Tapajos
region, in order to identify and evaluate the extent of other targets
that we believe exist in this area.  Following from the success of
ground electromagnetic surveys ("EM") in identifying mineralised
areas at Chico da Santa and Palito South areas, the first stage of
this programme will be to carry out in October a helicopter borne EM
survey covering over 5,000 hectares of the Jardim do Ouro area.  The
characteristics of Palito mineralisation are such that the EM survey
highlights potential 'hotspots'.  Combined with information obtained
from other exploration work, the results are expected rapidly to
produce a number of targets for drilling.  We are confident that such
an approach should have a high rate of success in locating the
sulphide mineralisation which is associated with the gold occurrences
at Jardim do Ouro.

Meanwhile, evaluation work continues apace at the Ruari's Ridge,
Palito West and Chico da Santa prospects.  We are very encouraged in
particular by the strike extension that has recently been identified
on the Palito West prospect, together with the high-grade
intersections that the detailed drilling programme is producing.
Additionally, we note that some of the mineralised structures of the
Chico da Santa prospect are located closer to the Palito Main Zone
mining operation than had been previously thought.  If this is
substantiated  by further drilling, then it is likely that we will be
able to access the Chico da Santa ore veins for production by the
rapid development of a cross-cut drive from the existing Palito mine,
thus avoiding the need for a more costly decline access solely for
the exploitation of this area.

Operations
In recent months underground mining has been adapted to a
'cut-and-fill' method.  Whilst production results for the first half
of the year exceeded those for the same period last year, it has been
disappointing that the long-hole stope mining method introduced at
the end of 2006 has not yielded the productivity improvements that
were anticipated.  We have not abandoned this method and continue to
look at solutions that will allow us to deliver the ore quantities at
the desired feed grade to the plant using this technique.  In the
meantime, 'cut and fill' enables more selective ore extraction and
reduces the unplanned dilution that occurred with long-hole mining.
The economic benefit of the higher stoping grade that can be achieved
by the more precise cut-and-fill technique substantially offsets this
slower and slightly more costly option.

In anticipation of the need for equipment for the development of
Ruari's Ridge, Palito West and Chico da Santa, and the lead times
involved, orders have recently been placed for key additional
underground equipment.  This includes the introduction of narrow
scooptrams, which we expect will result in a significant improvement
of the feed grade achieved from development drives by reducing the
levels of dilution by waste rock still further.  The plant is as a
consequence of lower dilution able to produce the same level of gold
whilst treating less ore and in so doing free up plant capacity and
reduce plant operating costs.  Current lead times for delivery
indicate that this equipment should be on site towards the end of
2007 with the resultant benefits becoming evident early in 2008.   In
the meantime the mine plan for the last quarter of 2007 does include
a higher ratio of stoping ore to development than we have seen to
date and at this stage we project full year production to show a
small increase on 2006 levels.

The plant continues to function well with recoveries in excess of
90%.  In anticipation of changes required to meet the increased level
of production in 2008, we are considering the installation of
additional CIP capacity.  At current production levels, studies
indicate that this would increase total recovery by at least 2%,
generating a capital pay-back within six months.

Finance
In reviewing the financial statements for the period it is necessary
to bear in mind that the comparative full year 2006 figures comprise
Revenue, Operating Expenses and Depreciation of the Mine Asset for a
3 month (fourth quarter) period whilst the remaining expenses are for
the full 12 month period.  This reflects the commencement of
Commercial Production at the end of September 2006 and the concurrent
cessation of the policy of capitalisation of costs and revenues
associated with the mining operations up to that date.  This
principal has been discussed in more detail in the 2006 Annual
Report.

The company is generating operating profits from the Palito mine,
with EBITDA for the six months of US$1.1 million, against a loss for
the 2006 calendar year of US$0.8 million.  Higher unit costs than the
preceding period are related to the already reported lower
production, rather than an escalating cost base. As is expanded on
below, at a head-line level we believe the financial results for the
first 6 months of 2007 do not reflect the long-term outlook or the
continuing efficiency drives that are being implemented.

Operating cash costs for Q4 2006 before accounting for copper and
silver credits was BrR$ 10.1 million compared with an average
quarterly cost in the first half of 2007 of BrR$ 10.2 million.
Notwithstanding the obvious effect of lower gold production resulting
from reported lower feed grades, two other factors have also
influenced our current unit costs of production.  In line with
industry standards costs per ounce are calculated after deducting
by-product credits from the base operating costs.  In Q4 2006 we
produced 224.6 tonnes of copper and generated a by-product credit of
$1.75 million.  For the first half of 2007 copper credits were $1.7
million, based on production of 252.6 tonnes.  Secondly, the
continued appreciation of the Brazilian Real has increased our US$
denominated costs by 6.3% against Q4 2006.

In the short term, plans to increase feed grades are expected to
deliver direct bottom line improvements.  If we are able to maintain
current ore volumes at higher grades there will be minimal effect on
the cost base, which is primarily linked to volumes processed and not
grade.  Our reported Q4 2006 cost per ounce gold equivalent was
US$252.  On a like-for-like basis (exchange and by-product credits)
the figure would have been $344 per ounce gold equivalent.  Given
that our production for the first six months was below plan and
averaged 80% of the Q4 2006 levels the cash cost of $442 per ounce
whilst disappointing does not reflect a long-term trend and we expect
to see direct improvement with better grade and thus production.  The
average cash costs over the six month period were significantly
influenced by low gold production in the first two months of the year
and since March we have seen improvements with cash costs averaging
$370 per ounce over the last four months.  The short-fall in
production in the early part of the year also placed short term
pressure on cash flow during this six month period and required the
Company to enter into some short term arrangements in Brazil with a
consequent impact on interest charges in the period.  These
arrangements have been eliminated and we would expect a significant
reduction in this cost in the second half of the year.

The potential to develop new areas within Chico da Santa, Palito West
and Ruari's Ridge will increase flexibility further and generate
economies of scale as mined volumes increase through 2008.  In the
meantime we are, given current prices and our balance sheet strength,
in a strong financial position to achieve our medium term objectives.

Personnel
Finally, shareholders were recently made aware of significant
management changes that took place at the end of August.  We would
like to reiterate our gratitude to Bill Clough and Sergio Aquino, the
co-founders of the Company, for their efforts and commitment in
bringing Serabi to where it is today.  As Serabi enters the next
stage in its development, we are pleased that both Bill and Sergio
will remain closely involved with Serabi as both shareholders and
executives.  This continued contribution is highly valued and we take
this opportunity to express sincere thanks to them both.

Mike Hodgson, our new Chief Executive, and Wanderlan Almeida, our new
Managing Director of Serabi Mineracao, are two individuals with
almost 50 years of operational experience between them, which bodes
well for Serabi being able to meet its production growth plans.


Graham Roberts                  Mike Hodgson
Chairman                              Chief Executive
19 September 2007


Consolidated Income Statement


                                      For the     For the
                                   six months  six months     For the
                                        ended       ended  year ended
                                      30 June     30 June 31 December
                                         2007        2006        2006
(Expressed in US$)                (unaudited) (unaudited)   (audited)
Revenue                            13,023,940               7,256,136
Operating expenses               (10,268,037)             (4,846,122)
Profit from operations              2,755,903               2,410,014
Administration expenses           (1,552,718) (1,320,150) (2,860,522)
Share-based payments                 (73,831)   (331,338)   (331,338)
Depreciation of plant and           (781,733)   (572,364) (1,426,004)
equipment
Depreciation of mine asset          (344,678)               (232,097)
Profit / (Loss) on ordinary             2,943 (2,223,852) (2,439,947)
activities before interest and
other income
Foreign exchange gain                 145,932     582,390     449,857
Interest payable                    (518,798)   (116,992)   (339,328)
Interest receivable                    76,201      48,531     120,649
Loss on ordinary activities         (293,722) (1,709,923) (2,208,769)
before taxation
Taxation                            (203,800)
Loss on ordinary activities         (497,522) (1,709,923) (2,208,769)
after taxation
Loss per ordinary share (basic        (0.45c)     (1.61c)     (2.04c)
and diluted)



Consolidated Balance Sheet




                                                    As at       As at
                                     As at   30 June 2006 31 December
                              30 June 2007 (unaudited and        2006
(expressed in US$)      Notes  (unaudited)      restated)   (audited)
Non-current assets
Goodwill                         1,752,516      1,752,516   1,752,516
Development and             3    9,666,538     17,934,350   6,454,074
deferred exploration
costs
Property, plant and         4   24,059,435      7,036,927  22,203,706
equipment
Total non-current               35,478,489     26,723,793  30,410,296
assets
Current assets
Inventories                 5    2,404,669      2,754,891   2,441,783
Trade and other                  1,448,417      1,431,230   1,128,830
receivables
Prepayments and accrued          1,653,412      1,693,165   1,521,347
income
Cash at bank and in              1,050,644      3,973,212   3,856,878
hand
Total current assets             6,557,142      9,852,498   8,948,838
Current liabilities
Trade and other                  3,872,369      3,125,030   4,053,744
payables
Accruals                           671,404        106,510     176,252
Interest bearing                   661,765         94,714     582,491
liabilities
Total current                    5,205,538      3,326,254   4,812,487
liabilities
Net current assets               1,351,604      6,526,244   4,136,351
Total assets less               36,830,093     33,250,037  34,546,647
current liabilities
Non-current liabilities
Trade and other                    124,794        142,441     180,314
payables
Provisions for                     710,206        448,121     799,749
liabilities and charges
Interest bearing                   269,079         68,405     368,778
liabilities
Total non-current                1,104,079        658,967   1,348,841
liabilities
Net assets                      35,726,014     32,591,070  33,197,806

Equity
Called up share capital     7   19,401,597     19,170,496  19,338,351
Share premium reserve           15,383,298     15,045,251  15,351,674
Option reserve                   2,800,205      3,381,121   2,818,722
Translation reserve              3,222,686      (693,795)     382,502
Profit and loss account        (5,081,772)    (4,312,003) (4,693,443)
Equity shareholders'            35,726,014     32,591,070  33,197,806
funds


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 2006, prepared under IFRS as adopted in the EU, has
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 Shareholder's Equity



(expressed in                           Share              Profit and
US$)               Share      Share    option Translation        loss       Total
(unaudited)      Capital    Premium   reserve     reserve     account      equity
Equity
shareholders'
funds at 1    17,974,336 11,818,128 2,690,052 (1,273,264) (2,602,080) 28,607,172
January 2006
(restated)
Foreign                                           579,469                 579,469
currency
adjustments
Loss for the                                              (1,709,923) (1,709,923)
period
Total                                             579,469 (1,709,923) (1,130,454)
recognised
loss for the
period
Share option                          246,076                             246,076
expense
Accrual for                           444,993                             444,993
Share Issue
Issue of       1,134,055  3,402,165                                     4,536,220
ordinary
shares
Share issue               (254,022)                                     (254,022)
expenses
Conversion of     62,105     78,980                                       141,085
options
Equity        19,170,496 15,045,251 3,381,121   (693,795) (4,312,003)  32,591,070
shareholders'
funds
at 30 June
2006
(restated)
Foreign                                         1,076,297               1,076,297
currency
adjustments
Loss for the                                                (498,846)   (498,846)
period
Total                                           1,076,297   (498,846)     577,451
recognised
profit for
the period
Issue of         148,331    296,662 (444,993)
ordinary
shares
Conversion of     19,524      9,761 (117,406)                 117,406      29,285
options
Equity        19,338,351 15,351,674 2,818,722     382,502 (4,693,443)  33,197,806
shareholders'
funds
at 31
December 2006
Foreign                                         2,840,184               2,840,184
currency
adjustments
Loss for the                                                (497,522)   (497,522)
period
Total                                           2,840,184   (497,522)   2,342,662
recognised
profit for
the period
Share option                           90,676                              90,676
expense
Conversion of     63,246     31,624 (109,193)                 109,193      94,870
options
Equity        19,401,597 15,383,298 2,800,205   3,222,686 (5,081,772)  35,726,014
shareholders'
funds
at 30 June
2007




Consolidated Cash Flow Statement


                                 For the          For the     For the
                        six months ended six months ended  year ended
                                 30 June          30 June 31 December
                                    2007             2006        2006
(expressed in US$)           (unaudited)      (unaudited)   (audited)
Cash flows from
operating activities
Operating profit /                 2,943      (2,223,852) (2,439,947)
(loss)
Depreciation - plant,          1,126,411          572,364   1,658,101
equipment and mining
properties
Option costs                      73,831          142,443     142,443
Share-based payments                              188,895     188,895
Interest paid                  (518,798)        (116,992)   (339,328)
Foreign exchange               (199,216)        1,977,704   (281,231)
Changes in working
capital
Decrease / (increase)            284,674        (753,002)   (443,136)
in inventories
(Increase) / decrease          (119,824)        (518,212)     399,765
in receivables,
prepayments
and accrued income
(Decrease) / increase          (259,780)          770,837   1,314,609
in payables, accruals
and provisions
Net cash flow from               390,241           40,185     200,171
operations

Investing activities
Proceeds of sale of                                           114,681
property, plant and
equipment
Purchase of property,          (673,779)      (1,564,509) (2,826,077)
plant and equipment
Exploration and              (2,410,359)      (1,378,186)   (373,568)
development expenditure
(1)
Interest received                 76,201           48,531     120,649
Net cash outflow on          (3,007,937)      (2,894,164) (2,964,315)
investing activities

Financing activities
Issue of ordinary share                         4,536,220   4,536,220
capital
Capital element of             (322,452)                    (327,406)
finance lease payments
Conversion of options             94,870          141,085     170,370
Payment of share issue                          (254,022)   (254,022)
costs
Net cash (outflow) /           (227,582)        4,423,283   4,125,162
inflow from financing
activities
Net (decrease) /             (2,845,278)        1,569,304   1,361,018
increase in cash and
cash equivalents
Cash and cash                  3,791,202        2,152,452   2,152,452
equivalents at
beginning of period
Exchange difference on            56,398          251,456     277,732
cash
Cash and cash                  1,002,322        3,973,212   3,791,202
equivalents at end of
period (note 6)



(1)   Exploration and development expenditure of the Group for 2006
is stated net of pre-operating income of US$2,839,018 ($1,990,800 to
30 June 2006).


Notes to Interim Financial Statements

1.  Basis of preparation

These interim accounts are for the six month period ended 30 June
2007. Comparative information has been provided for the unaudited six
month period to 30 June 2006 and the audited twelve month period from
1 January to 31 December 2006.

The accounts for the period have been prepared in accordance with the
policies which the Group will adopt for its annual accounts, notably:

(i)       the Financial Statements are presented in US Dollars.  They
are prepared on the historical cost basis or the fair value basis
where the fair valuing of relevant assets and liabilities has been
applied.  The financial statements whilst not statutory accounts have
been prepared otherwise in accordance with International Financial
Reporting Standards and their interpretations issued by the
Accounting Standards Board and adopted for use within the European
Union (IFRS);

(ii)     all costs related to the exploration of mineral properties
are capitalised and deferred until either the properties are
demonstrated to be commercially feasible or until the properties are
sold, allowed to lapse or abandoned, at which time any capitalised
costs are written off to the income statement.  All costs incurred
prior to obtaining the legal right to undertake exploration and
evaluation activities on a project are written off as incurred.
Exploration and evaluation costs arising following the acquisition of
an exploration licence are capitalised on a project by project basis,
pending determination of the technical feasibility and commercial
viability of the project.  Costs incurred include appropriate
technical and administrative overheads, but not general overheads.
Deferred exploration costs are carried at historical cost less any
impairment losses recognised.
Property, plant and equipment used in the Group's exploration
activities are separately reported;

(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 2007 31 December 2006
                                         (unaudited)        (audited)
Balance at beginning of period             6,454,074       17,420,146
Additions (1)                              2,427,204          733,298
Foreign exchange                             785,260        1,423,809
Transfer to Property, Plant and                          (13,123,179)
Equipment (Mining property)
Balance at end of period                   9,666,538        6,454,074



(1)   Exploration and development expenditure of the Group for 2006
is stated net of pre-operating income of US$2,839,018 ($1,990,800 to
30 June 2006).


4.  Property, plant and equipment


                                30 June 2007 31 December 2006
                                 (unaudited)        (audited)
Cost
Balance at beginning of period    24,685,071        6,531,584
Additions                            896,750        4,539,076
Transfer from intangible Assets                    13,123,179
Foreign exchange                   2,397,024          642,612
Disposals                                           (151,380)
Balance at end of period          27,978,845       24,685,071

Depreciation
Balance at beginning of period   (2,481,365)        (768,351)
Charge for period                (1,126,411)      (1,658,101)
Foreign exchange                   (311,634)         (91,611)
Eliminated on sale of asset                            36,698
Balance at end of period         (3,919,410)      (2,481,365)

Net book value                    24,059,435       22,203,706



5.  Inventories


                           30 June 2007 30 June 2006 31 December 2006
                            (unaudited)  (unaudited)        (audited)
Bullion and work in             693,023    1,029,596          918,269
progress
Consumables                   1,711,646    1,725,295        1,523,514
                              2,404,669    2,754,891        2,441,783



6. Cash and Cash Equivalents


             30 June 2007 30 June 2006 31 December 2006
              (unaudited)  (unaudited)        (audited)
Cash at Bank    1,050,644    3,973,212        3,856,878
Overdrafts       (48,322)                      (65,676)
                1,002,322    3,973,212        3,791,202



7.  Share capital


                  30 June 2007 30 June 2007 31 December 31 December
                   (unaudited)  (unaudited)        2006        2006
                                              (audited)   (audited)
Called up capital       Number            $      Number           $
Balance at         110,751,608   19,338,351 102,991,636  17,974,336
beginning of
period
Issue of shares                               6,500,000   1,134,055
Bonus share award                               816,666     148,331
Conversion of          317,689       63,246     443,306      81,629
employee share
options
Balance at end of  111,069,297   19,401,597 110,751,608  19,338,351
period


On 11th July 2007, the Company issued 29,069,768 new ordinary shares
pursuant to a placing at a price of 43 pence per
share, which raised gross proceeds of approximately US$25 million
(UK£12.5 million).

8. Transition to IFRS

The Company adopted the provisions of IFRS in preparing its financial
statements for the year ended 31 December 2006.  The effect on the
Group's financial statements of the transition to IFRS was explained
in the Transition Document published on 13 March 2007.  For the
purposes of comparison the financial statements of the group as at 30
June 2006 have been restated in accordance with IFRS as follows;





                                  Effect of transition to        IFRS
                        UK GAAP                      IFRS (unaudited)
                                              (unaudited)
Non Current Assets   25,690,074                 1,033,719  26,723,793
Current Assets        9,852,498                             9,852,498
Current Liabilities (3,326,254)                           (3,326,254)
Non Current           (658,967)                             (658,967)
Liabilities
Net Assets           31,557,351                 1,033,719  32,591,070
Equity Shareholders  31,557,351                 1,033,719  32,591,070
Funds











The








The adjustment between UK GAAP and IFRS represents the need to vary
the Group's previous UK GAAP compliant policy on translation of non
monetary assets denominated in foreign currencies to comply with
IFRS.


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]
James Black                     Tel: [phone]

Parkgreen Communications
Simon Robinson                  Tel: [phone]
Shannon Leano                   Tel: [phone]

---END OF MESSAGE---