Serabi Gold pleased with fourth quarter progress in Tapajos

The AIM-traded firm said that was “a small improvement” over the third quarter, and resulted in an annual total of 32,003 ounces.

It said production for December exceeded 3,000 ounces, which was the best monthly result since the end of April.

Total ore mined during the quarter was 46,275 tonnes at 5.24 grams of gold per tonne, with 43,440 tonnes of run of mine ore processed through the plant from the combined Palito and Sao Chico orebodies, with an average grade of 5.27 grams of gold per tonne, making for an improvement of 9% compared with the third quarter.

Serabi said it completed 3,353 metres of horizontal development during the quarter - the highest since operations commenced, and a 10% increase on the previous quarter.

It confirmed that more than 12,200 metres were developed during the year.

Mine site and regional exploration activities resumed in the fourth quarter, with a 32,000 metre drill programme planned for 2021, with activity underway at the recently-acquired Sao Domingos exploration tenement, immediately to the west of Sao Chico as well as Palito.

Geophysical surveys had started, and remained ongoing at the company’s Calico prospect.

The board said the “much-anticipated” award of the ‘Licença Prévia’ (LP) for its Coringa gold project, was issued by the state environmental agency on 8 October.

On the financial front, cash totalled $8.1m at the end of December, including the initial outstanding proceeds from a December gold sale of $1.5m.

A total of $3m was paid in the quarter to Equinox Gold under the staged payment plan for the Coringa gold project during the period.

Serabi said a further $1m was paid on 1 January, following which $4.5m remained outstanding, which it planned to have been settled in full during the second quarter of 2021.

No funds were drawn down in the quarter from the convertible loan arrangements with Greenstone Resources, leaving a total of $2m drawn down at the end of December.

Looking at 2021, Serabit said that with the need to re-establish optionality in the operations by opening up additional mine faces during the early part of the year, the company was expecting production for 2021 from the current Palito Complex operations to be between 33,000 and 36,000 ounces, with production in 2022 then increasing to around 45,000 ounces.

“It goes without saying that 2020 has presented unique challenges, so in that context producing 7,254 ounces in the final quarter to bring annual gold production for the year to over 32,000 ounces was a success,” said chief executive officer Mike Hodgson.

“Importantly with over 3,000 ounces being generated in December alone, our best month’s production since April, I think we can see the benefits of a return to normality and can look forward to 2021 with great optimism.

“Whilst we did forecast higher gold production for 2020, pre-pandemic, I believe all things considered, the overall result given the challenges faced has been an excellent outcome.”

Hodgson said that the gold not produced during 2020 had not been lost.

“It still remains in the ground and will therefore be produced in the future and with the continued strength of the gold price may generate better revenues.”

At 0841 GMT, shares in Serabi Gold were down 2.05% at 90.11p.