Serabi Gold trims guidance after weaker quarter at Palito

Brazil-focussed Serabi Gold reported first quarter gold production at Palito of 7,062 ounces in an update on Tuesday - a 13% reduction year-on-year - as it also trimmed its production guidance for the full year.

The AIM-traded firm said total ore mined during the period totalled 40,606 tonnes, at 5.95 grams of gold per tonne, compared with 40,371 tonnes at 6.27 grams per tonne for the same period in 2021.

Production was impacted by continued supply chain issues and greater-than-expected dilution from the Julia vein of the São Chico orebody.

Shrinkage stoping had been adopted to address that, but would result in delayed production, the company said.

As a result, Serabi reduced its guidance for 2022 to 30,000 ounces, from the previous 36,000 to 39,000 ounces.

A total of 41,357 tonnes of run-of-mine ore was processed through the plant from the combined Palito and São Chico orebodies, with an average grade of 5.72 grams of gold per tonne, compared with 41,462 tonnes at 6.27 grams per tonne for the same period a year ago.

Serabi said 2,938 metres of horizontal development was completed during the quarter.

“The first quarter results for 2022 have been somewhat mixed,” said chief executive officer Mike Hodgson.

“We have had some excellent, and better than anticipated results from the underground development at Coringa, most specifically on the first of the five ore zones, the Serra Zone.

“We have progressed development of V3 to the north and south of the ramp on both levels and these early results have been extremely promising.”

Hodgson said that as the company advanced to the north, it also expected to see improved widths.

“Whilst the last two years have been tough operationally due to global supply chain issues and impacts of Covid, we are confident in Serabi’s future,” Mike Hodgson said.

“The Palito orebody remains the engine room to our production base but with a turnaround expected at São Chico this year and the material growth from Coringa, our strategy remains to turn Serabi into a multi-asset gold miner with production approaching 100,000 ounces within the next few years.”

At 1044 BST, shares in Serabi Gold were down 12.03% at 51.9p.