Serabi Gold upbeat on progress at Coringa and Palito

The AIM-traded firm said that in addition, commissioning of the newly-installed ore sorter at the Palito complex was now underway.

On the subject of the meeting, the company said it was convened by SEMAS - the state environmental authority for Para - and was also attended by representatives from the Brazilian national mining authority ANM; the state secretary for social assistance, employment and income SEASTER; and the state secretary for economic development of mining and energy SEDEME.

The meeting was attended by around 600 people and lasted about five hours, with the board describing it “as expected”.

It said it believed that the various government bodies, having visited Serabi’s current operations immediately prior to the hearing, formed a positive view of the company and its proposals for progressing the Coringa project.

The next steps would be for SEMAS to present a recommendation to the State Environmental Council of Para (COEMA), which is the legislative body that would give final approval for the award of the Licençia Previa.

Serabi said it expected the decision would be made within the next two months.

“After the public concerns and consequent delays that the Brumadinho tailings dam failure brought to many mining companies last year, we are delighted that the Coringa Public Hearing was held on Thursday of last week in Novo Progresso, Para State,” said chief executive officer Mike Hodgson.

“The meeting followed a successful site visit to Serabi’s current operation by the relevant authorities.

“The public hearing had originally been scheduled for the first quarter of 2019, but the events at Brumadinho prompted us to review the original plans for dealing with the mine tailings from the Coringa operation, and we concluded that both permitting and funding risks would be greatly diminished if we adopted the technology of using a filtration plant to treat the tailings and then dry stacking the residual material.”

Hodgson said the company incorporated that change into the preliminary economic assessment that was published in October, together with the updated environmental impact assessment that was submitted to the state environmental authority, SEMAS, in September.

“By switching to this approach, we eliminated the need for a conventional tailings dam altogether.

“I am pleased to report that the five hour long public haring was positive, and the company feels optimistic, with the comments and concerns of various stakeholders having now been heard, that the various government bodies who will be responsible for granting the Licençia Previa left the meeting with a positive view of our plans for Coringa.”

Looking at the commissioning of the ore sorter at the Palito Complex, the firm said full-scale trials on the ore had been ongoing since 8 January, with representatives from Comex - the manufacturer - present on site.

The focus had been on passing low-grade Palito development ore through the ore sorter, which by its nature is the plant feed that contains most waste rock and was therefore consuming “vital” plant capacity that could be otherwise used to treat other higher-grade stope ore.

Trials would continue over the next six weeks, the board said, including test work on ore from the Sao Chico deposit, which had to date not been subject to such intensive testing as the Palito ore.

“I was at site at Palito last week and delighted to see our newly installed ore sorter in action,” Mike Hodgson added.

“At Palito we are mining high grade, but narrow orebodies, and despite mining these as selectively as possible, there is still a significant volume of waste rock dilution in the plant feed.

“As we are a plant-constrained operation, this creates issues in being able to expand gold production.”

Hodgson said that, working on the principle that ‘tonnes cost and grade pays’, the company’s focus had been to eliminate the waste from the ore feed before it reached the milling circuit, with the waste that it still could not practically eliminate through good mining practices now being significantly reduced through ore sorting.

“The Palito development ore offers the greatest opportunity and return.

“Until now, this development ore has been entering the processing plant as run of mine, consuming vital and critical plant capacity.

“Passing this material through the ore sorter first, screens the waste out of this low-grade material and scavenges the ore.”

That, Hodgson explained, resulted in an increase of the feed grade of the ore entering the milling circuit and the rest of the gold recovery plant, while also freeing up “much needed” plant capacity, which could be taken up with additional ore feed.

“By doing this we believe we can increase the output of the processing plant from the 40,000 ounces that we achieved in 2019 to an annualised rate of over 50,000 ounces.”

At 1339 GMT, shares in Serabi Gold were up 5.96% at 85.83p.