Serabi Gold's shares rise as FY profit surges

Shares in AIM-quoted Serabi Gold are up almost 8% as investors like its full-year results, which revealed a surge in pre-tax profit despite a weakening of Brazil's currency, the real.

The company's chief executive, Mike Hodgson, said Serabi produced 39,390 ounces of gold for the year, which was ahead of its production guidance.

He further observed the strong operating performance, adding that with the cash generated Serabi had settled roughly $8.50m of debt that it had outstanding at end-2015.

The balance sheet was significantly strengthened as a result, he said.

"We continue to look for efficiencies and improvements and it is pleasing to report that our unit production costs per tonne have decreased year on year by almost 13 per cent when looked at in local currency terms," said Hodgson.

He also noted that the full-year results had been impacted by the 20% strengthening of the Brazilian Real over the course of the year.

"Whilst many of the forecasts that we read indicate a weakening of the currency during 2017, we work on the principal of focussing on the items that we can control and therefore our simple objective is to reduce our costs to the lowest levels possible."

For Serabi, Hodgson said 2017 would be -- from an operational perspective -- be a period of consolidation.

"Both the Palito and Sao Chico Mines are now in a reasonably steady state and at the current time we are forecasting production of 40,000 ounces for the year, similar to the output for 2016.2

At 12:18 GMT, shares in Serabi were up 7.9% to 5.12p each.