Hold the Presses is your online newsportal en brings press releases from around the world. Journalists can use it for free, although it is their responsibilty to check the news. Hold the Presses is in no way responsible for the content of the press releases, the Sender is. We hope you enjoy reading the news we bring you on this website. If a message is published that is not acceptable, we apologize. Please contact us and we will remove the message as soon as possible.

Tuesday, 14 November 2017

Serabi Gold plc : Unaudited Interim Financial Results for the three and nine month periods to 30 September 2017

Serabi Gold plc    

Published: 08:00 CET 14-11-2017 /GlobeNewswire /Source: Serabi Gold plc / : SRB /ISIN: GB00B4T0YL77

Serabi Gold plc : Unaudited Interim Financial Results for the three and nine month periods to 30 September 2017

For immediate release

14 November 2017

 

Serabi Gold plc

("Serabi" or the "Company")

Unaudited Interim Financial Results for the three and nine month periods to 30 September 2017 and Management's Discussion and Analysis

 

Serabi Gold (AIM:SRB, TSX:SBI), the Brazilian focused gold mining and development company, today releases its unaudited interim financial results for the three and nine month periods ending 30 September 2017 and at the same time has published its Management's Discussion and Analysis for the same period.

 

Key Financial Information

SUMMARY FINANCIAL STATISTICS FOR THE THREE AND NINE MONTHS ENDING 30 SEPTEMBER 2017

 

3 months to

30 September 2017

US$

9 months to

30 September 2017

US$

3 months to

30 September 2016

US$

9 months  to

30 September 2016

US$

Revenue

12,908,790

36,225,050

16,209,753

42,120,928

Cost of Sales

(7,695,870)

(24,558,180)

(10,216,119)

(25,828,941)

Depreciation and amortisation charges

(2,934,986)

(7,545,847)

(2,907,161)

(6,552,101)

Gross profit

2,277,934

4,121,023

3,086,473

9,739,886

 

 

 

 

 

Profit / (loss) before  tax

490,532

(337,135)

743,503

2,305,731

Profit after tax

235,051

(770,629)

465,480

1,471,662

Earnings per ordinary share (basic)

0.03c

(0.11c)

0.07c

0.22c

 

 

 

 

 

Average gold price received

 

US$1,238

 

US$1,256

 

 

 

 

 

 

 

 

As at

 30 September 2017

US$

As at

31 December 2016

US$

Cash and cash equivalents

 

 

9,753,385

4,160,923

Net assets

 

 

64,598,323

63,378,973

 

 

 

 

 

Cash Cost and All-In Sustaining Cost ("AISC")

 

 

 

 

 

 

 

9 months to

 30 September 2017

9 months to

30 September 2016

Gold production for cash cost and AISC purposes

 

 

27,666

29,900

 

 

 

 

 

Total Cash Cost of production (per ounce)

 

 

US$795

US$772

Total AISC of production (per ounce)

 

 

US$1,058

US$951

 

 


Key Operational Information

 

 

 

SUMMARY PRODUCTION STATISTICS FOR THE THREE QUARTERS TO 30 SEPTEMBER 2017

  

Quarter 1

Quarter 2

Quarter 3

Year to Date

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Total

2017

2017

2017

2017

2016

2016

2016

2016

2016

Horizontal development - Total

Metres

2,251

1,855

2,996

7,102

2,925

2,941

2,649

2,694

11,209

  

 

 

 

 

    

 

Mined ore - Total

Tonnes

36,918

42,075

41,263

120,256

37,546

33,606

43,133

44,579

158,864

 

Gold grade (g/t)

10.12

7.80

9.80

9.20

11.02

9.56

9.61

8.94

9.74

  

 

 

 

 

    

 

Milled ore

Tonnes

46,663

43,905

44,954

135,522

36,615

39,402

42,464

40,485

158,966

 

Gold grade (g/t)

7.09

6.26

7.21

6.86

8.58

8.17

8.08

7.60

8.11

Gold production (1) (2)

Ounces

9,861

8,148

9,657

27,666

9,771

9,896

10,310

9,413

39,390

 

(1)    Gold production figures are subject to amendment pending final agreed assays of the gold content of the copper/gold concentrate and gold doré that is delivered to the refineries.

(2)    Gold production totals for 2017 include treatment of 4,941 tonnes of flotation tails (2016 full year : 16,716 tonnes)

 

Financial Highlights

  • Cash Cost for the year to date of US$795 per ounce of gold.
  • All-In Sustaining Cost for the year to date of US$1,058 per ounce of gold.
  • Gross profit from operations for the first nine months of 2017 of US$4.12 million.
  • Profit per share of 3 cents for Q3 and loss per share of 11 cents for the first nine months of 2017.
  • Cash holdings of US$9.75 million at 30 September 2017.
  • Average gold price of US$1,238 per ounce received on gold sales in the first nine months of 2017.

 

2017 Guidance

  • Forecast gold production for the fourth quarter of 2017 of approximately 10,000 ounces to achieve full year production of approximately 38,000 ounces. 
  • Cost guidance for 2017 of an All-In Sustaining Cost ("AISC") of US$1,000 to US$1,025 per ounce.

 

Operational Highlights

  • Third quarter production of 9,657 ounces of gold.  
  • Mine production totalled 41,263 tonnes at 9.80 grammes per tonne ("g/t") of gold. 
  • 44,954 tonnes processed through the plant for the combined mining operations, with an average grade of 7.21 g/t of gold.
  • 2,996 metres of horizontal mine development completed in the quarter.
  • The Palito orebody saw development and production focus on the Senna, Pipocas, G3 and Mogno veins principally, with three other veins, (Zonta, G1, Jatoba) in development.     
  • The mine ramp accessing the Sao Chico orebody has now reached the 26mRL, approximately 230 vertical metres below surface.   Production is coming from the 128mRL and 100mRL levels with levels 86mRL, 70mRL, 56mRL, 40mRL and now 26mRL all either developed or in development, comfortably ahead of production.
  • By the end of the third quarter, surface ore stocks were approximately 15,000 tonnes (30 June 2017: 12,000 tonnes) with an average grade of 3.2 g/t of gold.
  • A surface diamond drill programme of approximately 10,000 metres has commenced and will principally focus on the strike extensions of the veins in the Palito orebody. 
  • The results of a new 43-101 Technical Report comprising the geological resource and mineable reserve are close to completion and are expected to be issued before the end of November.

 

Mike Hodgson, CEO of Serabi commented,
 
"It was very pleasing to see third quarter production returning to expected levels, after a slightly disappointing second quarter.  We have now achieved total production for the first nine months of the year of 27,666 ounces.  Whilst a little below the production for the same period in 2016, the shortfall was simply due to a short term operational problem at Sao Chico during April and May, when we lost remote scoop capability and therefore had to rely on lower grade development ore for this period.  By June the problem was over, and we have seen strong monthly productions figures since.    
 
"Even more pleasing is the relative financial strength of the Company at the end of the quarter, with cash holdings increasing to over US$9.7 million.   We have benefitted during the third quarter from a relatively weak Real and a good gold price and with so much of our costs being in Reais, it is the gold price in Reais that really dictates our margins and cash generation.
 
"We have earmarked some of this cash to be reinvested back into the operations and in addition to the acquisition of an ore-sorter, other major capital investment include the acquisition of some new mine trucks, and expansion our tailings management facilities. 
 
"We have also commenced a 10,000 metre surface drilling programme which is concentrating on the strike extensions of the veins at the Palito orebody.  We anticipate this is just the start of a larger programme which will identify new orebodies, expand the resource base and support increased levels of gold production in the longer term. 
 
"Whilst profitability is down compared with 2016, it must be remembered that not only is production slightly down, resulting in lower revenue, but the Group has been impacted by the relative strength of the Real in 2017 when compared with 2016.   The average exchange rate for the nine months to 30 September 2016 was BrR$3.55 to US$1.00 and BrR$3.15 to US$1.00 for the first nine months of 2017 a swing of almost eleven per cent.  Nonetheless our operating costs for the nine months have fallen by almost US$2 million or over 7 percent, a reflection of the improvements and efficiencies that we are constantly seeking to implement.
 
"We have reported a small profit before tax of US$0.5 million for the third quarter which is a pleasing turnaround after the loss reported for the second quarter and I hope that, if production during the fourth quarter is in line with expectation, this can be continued."
 

 

 


SERABI GOLD PLC

Condensed Consolidated Statements of Comprehensive Income

 

 

 

 

 

 

 

 

 

For the three months ended

 30 September

For the nine months ended

30 September

 

 

 

 

2017

2016

2017

2016

(expressed in US$)

Notes

(unaudited)

(unaudited)

(unaudited)

(unaudited)

CONTINUING OPERATIONS

 

 

 

 

 

Revenue

 

12,908,790

16,209,753

36,225,050

42,120,928

Operating expenses

 

(7,295,870)

(10,216,119)

(23,938,180)

(25,828,941)

Provision for impairment of inventory

 

(400,000)

-

(620,000)

-

Depreciation of plant and equipment

 

(2,934,986)

(2,907,161)

(7,545,847)

(6,552,101)

Gross profit

 

2,277,934

3,086,473

4,121,023

9,739,886

Administration expenses

 

(1,407,836)

(1,267,898)

(3,828,194)

(3,812,218)

Share based payments

 

(101,665)

(101,072)

(279,697)

(249,828)

Gain on disposal of assets

 

15,621

2,070

131,596

29,039

Operating profit

 

784,054

1,719,573

144,728

5,706,879

Foreign exchange loss

 

(24,021)

(28,860)

(144,420)

(101,268)

Finance expense

 

(269,532)

(947,250)

(337,543)

(3,299,989)

Investment income

 

31

40

100

109

Profit / (loss) before taxation

 

490,532

743,503

(337,135)

2,305,731

Income tax expense

 

(255,481)

(278,023)

(433,494)

(834,069)

Profit / (loss) for the period from continuing operations (1) (2)

 

235,051

465,480

(770,629)

1,471,662

 

 

 

 

 

 

Other comprehensive income

Items that may be reclassified subsequently to profit or loss

Exchange differences on translating foreign operations

 

2,367,977

(588,314)

1,710,282

9,041,254

Total comprehensive profit / (loss) for the period (2)

 

2,602,028

(122,834)

939,653

10,512,916

 

 

 

 

 

 

Profit / (loss) per ordinary share (basic) (1)

3

0.03c

0.07c

(0.11c)

0.22c

Profit / (loss) per ordinary share (diluted) (1)

3

0.03c

0.06c

(0.11c)

0.21c

(1) All revenue and expenses arise from continuing operations.        

(2) The Group has no non-controlling interests and all losses are attributable to the equity holders of the parent company.


SERABI GOLD PLC

Condensed Consolidated Balance Sheets

 

 

 

As at

As at

As at

 

 

30 September

30 September

31 December

 

 

2017

2016

2016

(expressed in US$)

 

(unaudited)

(unaudited)

(audited)

Non-current assets

 

 

 

 

Deferred exploration costs

 

10,235,454

9,731,144

9,990,789

Property, plant and equipment

 

44,260,723

44,860,837

45,396,140

Deferred Taxation

 

3,164,441

-

3,253,630

Total non-current assets

 

57,660,618

54,591,981

58,640,559

Current assets

 

 

 

 

Inventories

 

7,196,529

7,865,290

8,110,373

Trade and other receivables

 

1,433,010

9,165,344

1,233,049

Prepayments and accrued income

 

4,950,976

2,652,081

3,696,550

Cash and cash equivalents

 

9,753,385

3,116,123

4,160,923

Total current assets

 

23,333,900

22,798,838

17,200,895

Current liabilities

 

 

 

 

Trade and other payables

 

5,313,706

6,564,033

4,722,139

Secured loan

 

1,290,000

1,425,058

1,371,489

Trade and asset finance facilities

 

1,054,632

3,260,272

1,592,568

Derivative financial liabilities

 

732,470

262,000

-

Accruals

 

450,867

367,646

635,446

Total current liabilities

 

8,841,675

11,879,009

8,321,642

Net current assets

 

14,492,225

10,919,829

8,879,253

Total assets less current liabilities

 

69,135,527

65,511,810

67,519,812

Non-current liabilities

 

 

 

 

Trade and other payables

 

2,276,769

2,275,312

2,211,078

Secured loan

 

3,125,000

-

-

Provisions

 

1,905,230

2,284,002

1,851,963

Trade and asset finance facilities

 

247,521

210,657

77,798

Total non-current liabilities

 

7,554,520

4,769,971

4,140,839

Net assets

 

64,598,323

60,741,839

63,378,973

Equity

 

 

 

 

Share capital

 

5,540,960

5,540,960

5,540,960

Share premium

 

1,722,222

1,722,222

1,722,222

Option reserve

 

1,355,583

1,237,581

1,338,652

Other reserves

 

3,404,624

361,461

3,051,862

Translation reserve

 

(28,897,566)

(30,185,281)

(30,607,848)

Distributable surplus

 

81,472,500

82,064,896

82,333,125

Equity shareholders' funds

 

64,598,323

60,741,839

63,378,973

 

The interim financial information has not been audited and does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. Whilst the financial information included in this announcement has been compiled in accordance with International Financial Reporting Standards ("IFRS") this announcement itself does not contain sufficient financial information to comply with IFRS.  The Group statutory accounts for the year ended 31 December 2016 prepared under IFRS as adopted in the EU and with IFRS and their interpretations adopted by the International Accounting Standards Board have been filed with the Registrar of Companies following their adoption by shareholders at the next Annual General Meeting. The auditor's report on these accounts was unqualified but did contain an Emphasis of Matter with respect to the Company and the Group regarding Going Concern.  The auditor's report did not contain a statement under Section 498 (2) or 498 (3) of the Companies Act 2006.

SERABI GOLD PLC

Condensed Consolidated Statements of Changes in Shareholders' Equity

(expressed in US$)

Share

Share

Share option

Other

Translation

Retained

 

 

capital

premium

reserve

reserves (1)

reserve

earnings

Total equity

Equity shareholders' funds at  31 December 2015 (audited)

5,263,182

-

2,747,415

450,262

(39,226,535)

77,549,321

46,783,645

Foreign currency adjustments

-

-

-

-

9,041,254

-

9,041,254

Profit for the period

-

-

-

-

-

1,471,662

1,471,662

Total comprehensive income for the period

-

-

-

-

9,041,254

1,471,662

10,512,916

Warrants lapsed

-

-

-

(88,801)

-

88,801

-

Shares Issued in period

277,778

1,722,222

-

-

-

-

2,000,000

Release of fair value provision on convertible loan

-

-

-

-

 

1,195,450

1,195,450

Share options lapsed in period

-

-

(1,759,662)

-

-

1,759,662

-

Share option expense

-

-

249,828

-

-

-

249,828

Equity shareholders' funds at 30 September 2016

 (unaudited)

5,540,960

1,722,222

1,237,581

361,461

(30,185,281)

82,064,896

60,741,839

Foreign currency adjustments

-

-

-

-

-

2,958,630

2,958,630

Loss for the period

-

-

-

-

(422,567)

-

(422,567)

Total comprehensive income for the period

-

-

-

-

(422,567)

2,958,630

2,536,063

Transfer to taxation reserve

-

-

-

2,690,401

-

(2,690,401)

-

Share option expense

-

-

101,071

-

-

-

101,071

Equity shareholders' funds at 31 December 2016 (audited)

5,540,960

1,722,222

1,338,652

3,051,862

(30,607,848)

82,333,125

63,378,973

Foreign currency adjustments

-

-

-

-

1,710,282

-

1,710,282

Loss for the period

-

-

-

-

-

(770,629)

(770,629)

Total comprehensive income for the period

-

-

-

-

1,710,282

(770,629)

939,653

Transfer to taxation reserve

-

-

-

352,762

-

(352,762)

-

Share options lapsed in period

-

-

(262,766)

-

-

262,766

-

Share option expense

-

-

279,697

-

-

-

279,697

Equity shareholders' funds at 30 September 2017

(unaudited)

5,540,960

1,722,222

1,355,583

3,404,624

(28,897,566)

81,472,500

64,598,323

  1. Other reserves comprise a merger reserve of US$361,461 and a taxation reserve of US$3,043,163 (2016: merger reserve of US$ 361,461 and a taxation reserve of US$2,690,401)

SERABI GOLD PLC

Condensed Consolidated Cash Flow Statements

 

 

For the three months

ended

30 September

For the nine months

 ended

30 September

 

2017

2016

2017

2016

(expressed in US$)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Operating activities

 

 

 

 

Profit / (loss) before taxation

235,051

465,480

(770,629)

1,471,662

Depreciation - plant, and equipment

2,934,986

2,907,161

7,545,847

6,552,101

Net financial expense

293,522

976,071

481,863

3,401,148

Provision for impairment of inventory

400,000

-

620,000

-

Taxation

255,481

278,023

433,494

834,069

Share-based payments

101,665

101,072

279,697

249,828

Foreign exchange (gain) / loss

(359,590)

38,109

(319,030)

207,785

Changes in working capital

 

 

 

 

 

(Increase) / decrease in inventories

(374,877)

1,286,509

612,487

505,768

 

Decrease / (increase) in receivables, prepayments and accrued income

1,076,370

330,084

(1,500,915)

(2,434,886)

 

(Decrease) / increase in payables, accruals and provisions

(409,010)

(68,421)

(405,421)

1,411,427

Net cash inflow from operations

4,153,598

6,314,088

6,977,393

12,198,902

 

 

 

 

 

Investing activities

 

 

 

 

Purchase of property, plant and equipment and projects in construction

(265,246)

(713,069)

(1,349,085)

(2,840,740)

Mine development expenditures

(1,191,322)

(469,608)

(3,155,641)

(1,718,759)

Exploration and development expenditure

-

(247,479)

(2,501)

(247,479)

Proceeds from sale of assets

59,659

2,070

175,634

29,039

Interest received

31

40

100

109

Net cash outflow on investing activities

(1,396,878)

(1,428,046)

(4,331,493)

(4,777,830)

 

 

 

 

 

Financing activities

 

 

 

 

Repayment of short-term secured loan

-

(1,333,334)

-

(2,666,667)

Draw-down of short-term loan facility

3,628,511

-

3,628,511

-

Draw-down of short-term convertible loan facility

-

-

-

2,000,000

Receipts from short-term trade finance

-

4,454,632

-

16,355,730

Repayment of short-term trade finance

-

(9,411,663)

-

(20,921,538)

Payment of finance lease liabilities

(346,566)

(161,210)

(478,730)

(542,731)

Interest paid and other finance costs

(166,363)

(125,901)

(233,818)

 (624,233)

Net cash inflow / (outflow) from financing activities

3,115,582

(6,577,476)

2,915,963

(6,399,439)

 

 

 

 

 

Net  increase / (decrease) in cash and cash equivalents

5,872,302

(1,691,434)

5,561,863

1,021,633

Cash and cash equivalents at beginning of period

3,832,218

4,774,537

4,160,923

2,191,759

Exchange difference on cash

48,865

33,020

30,599

(97,269)

Cash and cash equivalents at end of period

9,753,385

3,116,123

9,753,385

3,116,123

 

Notes

 

1.             General Information

The financial information set out above does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. Whilst the financial information included in this announcement has been compiled in accordance with International Financial Reporting Standards ("IFRS") this announcement itself does not contain sufficient financial information to comply with IFRS. A copy of the statutory accounts for 2016 has been filed with the Registrar of Companies following their adoption by shareholders at the last Annual General Meeting.  The full audited financial statements, for the year end 31 December 2016, do comply with IFRS.

 

2.             Basis of Preparation

These interim condensed consolidated financial statements are for the three and nine month periods ended 30 September 2017. Comparative information has been provided for the unaudited three and nine month periods ended 30 September 2016 and, where applicable, the audited twelve month period from 1 January 2016 to 31 December 2016. These condensed consolidated financial statements do not include all the disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2016 annual report.

The condensed consolidated financial statements for the periods have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the accounting policies are consistent with those of the annual financial statements for the year ended 31 December 2016 and those envisaged for the financial statements for the year ending 31 December 2017. The Group has not adopted any standards or interpretation in advance of the required implementation dates.  It is not anticipated that the adoption in the future of the new or revised standards or interpretations that have been issued by the International Accounting Standards Board will have a material impact on the Group's earnings or shareholders' funds.

These financial statements do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.

 

  1. Going concern

On 1 February 2016, the Group announced that, with effect from 1 January 2016, the Sao Chico Mine had achieved Commercial Production.  The Palito Mine has been in Commercial Production since 1 July 2014.

The Directors anticipate the Group now has access to sufficient funding for its immediate projected needs.  The Group expects to have sufficient cash flow from its forecast production to finance its on-going operational requirements, to repay its secured loan facilities and to, at least in part, fund exploration and development activity on its other gold properties. On 30 June the Group completed a re-negotiation of an increased secured loan facility of US$5 million (including the existing loan to US$1.37 million).  The new facility is repayable by 31 December 2019 and the incremental funds were received by the Company on 5 July 2017.

The Directors consider that the Group's operations are performing at the levels that they anticipate, but the Group remains a small scale gold producer with limited cash resources to support any unplanned interruption or reduction in gold production, unforeseen reductions in the gold price, or appreciation of the Brazilian currency, all of which could adversely affect the level of free cash flow that the Group can generate on a monthly basis.  In the event that the Group is unable to generate sufficient free cash flow to meet its financial obligations as they fall due, or to allow it to finance exploration and development activity on its other gold properties, additional sources of finance may be required.   Should additional working capital be required the Directors consider that further sources of finance could be secured within the required timescale. 

On this basis, the Directors have therefore concluded that it is appropriate to prepare the financial statements on a going concern basis. However, there is no certainty that such additional funds either for working capital or for future development will be forthcoming and these conditions indicate the existence of a material uncertainty, which may cast significant doubt over the Group's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.  The condensed consolidated financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

 

(ii)   Use of estimates and judgements

There have been no material revisions to the nature and amount of changes in estimates of amounts reported in the 2016 annual financial statements.

 

 (iii)  Impairment

At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that those assets have suffered impairment. Prior to carrying out of impairment reviews, the significant cash generating units are assessed to determine whether they should be reviewed under the requirements of IFRS 6 - Exploration for and Evaluation of Mineral Resources or IAS 36 - Impairment of Assets. Such determination is by reference to the stage of development of the project and the level of reliability and surety of information used in calculating value in use or fair value less costs to sell. Impairment reviews performed under IFRS 6 are carried out on a project by project basis, with each project representing a potential single cash generating unit. An impairment review is undertaken when indicators of impairment arise; typically when one of the following circumstances applies:

(i)            sufficient data exists that render the resource uneconomic and unlikely to be developed

(ii)           title to the asset is compromised

(iii)         budgeted or planned expenditure is not expected in the foreseeable future

(iv)          insufficient discovery of commercially viable resources leading to the discontinuation of activities

Impairment reviews performed under IAS 36 are carried out when there is an indication that the carrying value may be impaired. Such key indicators (though not exhaustive) to the industry include:

(i)            a significant deterioration in the spot price of gold

(ii)           a significant increase in production costs

(iii)         a significant revision to, and reduction in, the life of mine plan

If any indication of impairment exists, the recoverable amount of the asset is estimated, being the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. Such impairment losses are recognised in profit or loss for the year.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss for the year.

 

3. Earnings per share

 

3 months ended 30 September 2017

US$

(unaudited)

3 months ended 30 September

2016

US$

(unaudited)

9 months ended 30 September 2017

US$

(unaudited)

9 months ended 30 September

2016

US$

(unaudited)

Profit / (loss) attributable to ordinary shareholders (US$)

235,051

465,480

(770,629)

1,471,662

Weighted average ordinary shares in issue

698,701,772

678,005,407

698,701,772

663,647,199

Basic profit/ (loss) per share (US cents)

0.03

0.07

(0.11)

0.22

Diluted ordinary shares in issue (1)

748,461,772

727,915,407

698,701,772

713,557,199

Diluted profit / (loss) per share (US cents)

0.03

0.06

(0.11)(2)

0.21

  1. Assumes exercise of all options and warrants outstanding as of that date where the Group has reported a profit for the period.
  2. As the effect of dilution is to reduce the loss per share, the diluted loss per share is considered to be the same as the basic loss per share.

 

 

4.             Post balance sheet events

 

On 13 November 2017, Serabi signed a conditional acquisition agreement to acquire 100 per cent. of the issued share capital and inter-company debt of Chapleau Resources Ltd ("Chapleau"), a Canadian registered company wholly-owned by Anfield Gold Corp ("Anfield"), which holds the Coringa gold project ("Coringa") located in the Tapajos gold province in Para, Brazil.

Serabi will acquire the entire issued share capital of Chapleau together with its outstanding inter-company debts owed to Anfield. Serabi will make an initial payment to Anfield on closing of the transaction ("Closing") of US$5 million in cash from existing resources. A further US$5 million in cash is payable within three months of Closing.  A final payment of US$12 million in cash will be due upon the earlier of either the first gold being produced or 24 months from the date of Closing. The total proposed consideration for the acquisition amounts to US$22 million in aggregate.

The Agreement is conditional on a number of items including:

  • Completion by Serabi of its due diligence, including the receipt of satisfactory legal opinions as to mining title, labour, environmental and tax matters;
  • Approval of the shareholders of Anfield and approval of the TSX-V; and
  • Approval of Serabi's secured lender (Sprott).

Pursuant to the Agreement, Anfield has provided Serabi with certain indemnities in respect of future claims relating to activities prior to Closing, including labour and tax liabilities. In addition, the Agreement includes representations and warranties from Anfield in favour of Serabi as would be customary for a transaction of this nature both on execution of the Agreement and at Closing.

Serabi has agreed, on Closing, to grant to Anfield, subject to the approval of Serabi's secured lender and, if required, sub-ordinated to any security granted by Serabi to its secured lender, a pledge over the shares of Chapleau as security for the full and irrevocable payment of the Deferred Consideration.

Anfield proposes to hold its shareholder meeting to approve the proposed transaction on 19 December 2017, and Closing is anticipated to occur shortly thereafter.

Chapleau is not required to prepare audited financial statements.  Based on information provided by Anfield and extracted from the unaudited consolidated financial statements of Anfield to 31 December 2016, Chapleau on a consolidated basis, reported a loss before taxation of C$22.3 million for the 12 month period ended 31 December 2016 after (i) expensing exploration and evaluation expenditure of C$7.9 million, (ii) recognising a foreign exchange loss of the capitalisation of intergroup loans into shares of Chapleau Brazil of C$13.7 million, and (iii) other one-off costs estimated at C$1.3 million. Chapleau had no revenues. As at 30 June 2017 total assets and shareholders' equity amounted to C$19.6 million and C$(20.3 million) respectively, with shareholder loans totalling C$38.6 million. The balance sheet carrying value of property, plant and equipment associated with the Coringa project as at 30 June 2017 amounted to C$16.6 million which excludes past exploration costs as these have been expensed.   As at 30 June 2017 Chapleau had net cash and cash equivalents of C$2.5 million and except for intercompany loans (amounting to C$38.6 million), which will be assigned to Serabi on Closing, had no borrowings.

 

Enquiries:

 

Serabi Gold plc

 

Michael Hodgson

Tel: +44 (0)20 7246 6830

Chief Executive

Mobile: +44 (0)7799 473621

 

 

Clive Line

Tel: +44 (0)20 7246 6830

Finance Director

Mobile: +44 (0)7710 151692

 

 

Email: contact@serabigold.com

 

Website:  www.serabigold.com

 

 

 

Beaumont Cornish Limited

Nominated Adviser and Financial Adviser

 

Roland Cornish

Tel: +44 (0)20 7628 3396

Michael Cornish

Tel: +44 (0)20 7628 3396

 

 

Peel Hunt LLP

UK Broker

 

Ross Allister

Tel: +44 (0)20 7418 9000

Chris Burrows

Tel: +44 (0)20 7418 9000

 

 

Blytheweigh

Public Relations

 

Tim Blythe

Tel: +44 (0)20 7138 3204

Camilla Horsfall

Tel: +44 (0)20 7138 3224

 

 

Copies of this announcement are available from the Company's website at www.serabigold.com.

 

Neither the Toronto Stock Exchange, nor any other securities regulatory authority, has approved or disapproved of the contents of this announcement.

 

The Company will, in compliance with Canadian regulatory requirements, post the Unaudited Interim Financial Statements and the Management Discussion and Analysis for the three and nine-month periods ended 31 September 2017 on SEDAR at www.sedar.com.  These documents will also available from the Company's website - www.serabigold.com.

 

Serabi's Directors Report and Financial Statements for the year ended 31 December 2016 together the Chairman's Statement and the Management Discussion and Analysis, are available from the Company's website - www.serabigold.com and on SEDAR at www.sedar.com.

 

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

 

 

GLOSSARY OF TERMS

The following is a glossary of technical terms:

"Au" means gold.

 "assay" in economic geology, means to analyse the proportions of metal in a rock or overburden sample; to test an ore or mineral for composition, purity, weight or other properties of commercial interest.

"development" - excavations used to  establish access to the mineralised rock and other workings.

"doré - a semi-pure alloy of gold silver and other metals produced by the smelting process at a mine that will be subject to further refining.

"DNPM" is the Departamento Nacional de Produção Mineral.

"grade" is the concentration of mineral within the host rock typically quoted as grams per tonne (g/t), parts per million (ppm) or parts per billion (ppb).

"g/t" means grams per tonne.

"granodiorite" is an igneous intrusive rock similar to granite.

"igneous" is a rock that has solidified from molten material or magma.

"Intrusive" is a body of igneous rock that invades older rocks.

"on-lode development" - Development that is undertaken in and following the direction of the Vein.

 "mRL" - depth in metres measured relative to a fixed point - in the case of Palito and Sao Chico this is sea-level.  The mine entrance at Palito is at 250mRL.

"saprolite" is a weathered or decomposed clay-rich rock.

"stoping blocks" - a discrete area of mineralised rock established for planning and scheduling purposes that will be mined using one of the various stoping methods. 

"Vein" is a generic term to describe an occurrence of mineralised rock within an area of non-mineralised rock.

 

 

Qualified Persons Statement

The scientific and technical information contained within this announcement has been reviewed and approved by Michael Hodgson, a Director of the Company. Mr Hodgson is an Economic Geologist by training with over 26 years' experience in the mining industry. He holds a BSc (Hons) Geology, University of London, a MSc Mining Geology, University of Leicester and is a Fellow of the Institute of Materials, Minerals and Mining and a Chartered Engineer of the Engineering Council of UK, recognising him as both a Qualified Person for the purposes of Canadian National Instrument 43-101 and by the AIM Guidance Note on Mining and Oil & Gas Companies dated June 2009.

 

Forward Looking Statements

Certain statements in this announcement are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors. A number of factors could cause actual results to differ materially from the results discussed in the forward looking statements including risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes, actions by governmental authorities, the availability of capital markets, reliance on key personnel, uninsured and underinsured losses and other factors, many of which are beyond the control of the Company. Although any forward looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with such forward looking statements.

 

ENDS





This announcement is distributed by Nasdaq Corporate Solutions (One Liberty Plaza, 165 Broadway, New York, NY 10006. Tel: +1 212 401 8700. www.nasdaqomx.com) on behalf of Nasdaq Corporate Solutions clients. Source: Serabi Gold plc, 66 Lincoln's Inn Fields, London WC2A 3LH, UK
If you would like to unsubscribe and stop receiving these e-mails click here.