Serabi Gold Brazilian based operations ramp up gold production in third quarter

Serabi Gold's Palito/Sao Chico high grade gold operation, located in the Tapajos region of Para State, Northern Brazil, ramped up gold production, with an estimated 9,657 ounces of gold reportedly produced in the third quarter, the company announced on Monday.

During that period, 44,954 tonnes were processed through the plant for the combined mining operations, with an average grade of 7.21 g/t of gold.

Altogether, mine production totalled 41,263 tonnes at 9.80 grammes per tonne of gold, according to Serabi.

The company added that by the end of the period surface ore stocks increased to approximately 15,000 tonnes from 12,000 in the comparable period of the previous year, with an initial 8,000 metre surface drill programme set to commence before the end of the year.

For the full year, Serabi forecast 40,000 ounces of gold production at an All In Sustaining Cost of between $950 and $975 per ounce, broadly in line with 2016's cost guidance.

Management hoped that production in the last three months of the year would improve on previous quarters, considering increased levels of processing of 2014 flotation tails during the final quarter, which could seep through to 2018 as well.

However, the company also experienced some draw backs.

"In the plant, the performance during the quarter was excellent, with approximately 45,000 tonnes of run of mine ore ("ROM") milled. With 41,000 tonnes having been mined, the balance of the plant throughput was made up by processing the low grade surface stockpiled ore. However, with over 15,000 tonnes of coarse ore still in stockpiles and over 35,000 tonnes of flotation tails stockpiled (with an average grade of around 3g/t of gold) and this level having been fairly static since 2014, we remain plant constrained, which is both comforting and frustrating.

"With current plant limitations, we have had little success in running down the levels of the flotation tails, for two primary reasons. To date we have pumped the tailings 'wet' to the CIP plant, but this has proved to be slow and labour intensive. Passing the material 'dry' through the ore feed system is restricted by belt capacity, and therefore we would be displacing higher grade ore. We are now designing and constructing an independent conveyor to feed these tails directly into the ball mills, which means this material can be added to the current dry mill feed, and therefore increase the levels that can be treated each month. We hope to be operational with this solution by mid-November," said Mike Hodgson, the CEO.