Currently viewing Global edition

Serabi rises on positive Coringa PEA

London-listed Serabi Gold has completed a preliminary economic assessment on its Coringa gold project in Brazil, showing initial financial metric supportive of an economic gold-mining operation.
Serabi rises on positive Coringa PEA Serabi rises on positive Coringa PEA Serabi rises on positive Coringa PEA Serabi rises on positive Coringa PEA Serabi rises on positive Coringa PEA

A PEA on Serabi Gold's Coringa project in Brazil supports an economic operation

Based on a three-year trailing average gold price assumption of US$1,275 per ounce, the PEA has calculated a base-case pre-tax net present value of $55.7 million, an internal rate of return of 31% and average annual gross revenue of $43.4 million.

With an average head grade of 8.34g/t, the project is expected to produce up to 288,000oz over its nine-year mine life, with an average LOM all-in sustaining cost of $852/oz.

Once fully ramped up, Coringa is expected to produce on average 38,000oz/y for the first five years.

The initial capital requirement to achieve sustained positive cash-flow has been pegged at $24.7 million, with the base-case operating scenario offering a 2.25-year payback.

A NI43-101-compliant indicated resource of 334,000 tonnes grading 11.65g/t for 125,000oz contained gold underpins the PEA, with additional inferred resources of 178,000oz held in 473,000t at 11.7g/t providing potential future production upside.

Subject to permitting approvals and project financing, the mine development could start from late June next year, with initial processing of the run-of-mine ore to start nine months later.

"The publication of these very encouraging results of the Coringa PEA is a major milestone in achieving this objective," said CEO Mike Hodgson.

"The PEA supports an initial nine-to-10-year mine life and, after the initial ramp up, mine production is projected to initially average around 38,000oz/y once the ramp up is complete. This will add to our existing annual 40,000oz/y production from our Palito operations."

Hodgson was quick to point out PEA did not reflect the longer-term growth potential of Coringa, nor did it factor in how the increased level of gold production might change the investment case for Serabi as a whole.

Serabi (LSE:SRB) achieved a new 12-month high on Friday at 90p, up 9.75%, which capitalises it at about £52.43 million.