Serabi Gold reports improved reserves at Palito and San Chico

The AIM-traded firm said there had been a “significant” increase in the Sao Chico resources, with the measured and indicated resource more than doubling to 82,807 ounces, and the inferred resource also almost doubling to 94,002 ounces, following a successful exploration programme in 2019.

It said accelerated mine development and exploration programmes were underway to catch up on activity that was curtailed in 2020 due to the Covid-19 pandemic.

That work, the board said, was expected to support further resource growth.

“The Palito Complex has a long history of reserve and resource replenishment and it is pleasing to demonstrate this once again,” said chief executive officer Mike Hodgson.

“Our global mineral resources have remained relatively stable despite mine depletion and although the reported reserves are lower than we would normally expect, this is a direct result of the measures we took to safeguard our operation in the face of the Covid-19 pandemic.

“Following the successful equity raise of $17.5m (£12.68m) announced on 2 March, we are fully funded to complete our 2021 exploration programme which will include 32,000 meters of diamond drilling over the course of the year.”

Hodgson said much of that drilling would be focussed on extensions to the Palito and Sao Chico orebodies, which remain open along strike, laterally and at depth.

That exploration programme would be the largest in Serabi’s history, he said, with the board “confident” that it would deliver resource growth.

“In addition, we are working hard to catch up with the mine development that was put on hold during the Covid-19 pandemic.

“This development not only opens up new areas of the mines but is an integral part of the conversion of resource blocks into reserve ounces.”

With the firm’s workforce back to full strength and its Covid-19 protocols “seemingly very effective” at keeping the virus out of its camp, Hodgson said Serabi was making “excellent progress” on both exploration and development.

“We look forward to updating the market with our exploration results throughout the year and are confident these will lead to a growth in both our reserves and resources and demonstrate that the Palito and Sao Chico deposits remain long-life assets.”

At 0853 GMT, shares in Serabi Gold were down 1.03% at 69.87p.