Serabi Gold Produces 7,759 Ounces of Gold for Q1

Serabi Gold (AIM:SRB,TSX:SBI) provided an update on its Palito and Sao Chico gold operations in Brazil. Highlights included gold production of 7,759 ounces for the first quarter and March production of 3,005 ounces. The company has reached its highest monthly production level to date and has now reached steady state production.

As quoted in the press release, other highlights included:

Palito

• 7,759 ounces(1) were produced from the treatment of Palito ore during the first quarter of 2015.
• Mine production for the quarter totalled 25,812 tonnes of ore averaging 10.90 g/t gold, containing 9,040 ounces. Mill production for the quarter totalled 31,412 tonnes.
• 300 ounces(1) of gold production from the processing of the surface stockpile of flotation tailings. Over 50,000 tonnes @ approximately 2.5 g/t are awaiting treatment, and this material will be treated through the Carbon in Pulp (“CIP”) plant over the next 6 to 8 months.
• At the end of the quarter, the Palito surface stockpiles of coarse ore were estimated at approximately 8,000 tonnes@ 5.0 g/t gold.

Sao Chico

• Over 550 metres of sub-horizontal development has now been completed at Sao Chico, 237 metres of which has been in ore through the development of the Main Vein on the first 216mRL development level.
• The Main Vein was initially intersected in January this year exhibiting a true thickness of 3.6 metres @ 42.0 g/t gold.
• The main ramp is being driven to the next planned development level, 40m vertically below at the 178mRL level.
• At the end of the first quarter, a high grade stockpile of 2,900 @ 9.75 g/t gold had been generated, with the transportation of this material to Palito having commenced. The first Sao Chico ore will be processed concurrently with Palito ore during the second quarter of 2015.
• A new surface drill programme at Sao Chico commenced in late March 2015. A drill programme of approximately 6,000 metres is planned, with a view to issuing a new resource estimation by the end of the third quarter of 2015.

Serabi Gold CEO, Mike Hodgson, said:

I am delighted to report excellent production results at Palito. Almost 8,000 ounces(1) of gold was produced in the first quarter, and 3,000 of those ounces(1) were produced in March alone: proof that Palito is in a steady production state.

At Sao Chico, approximately 3,000 tonnes of ore is already stockpiled with a grade of just below 10.0 g/t gold, and the first trucks are starting to transport this to Palito, therefore we remain on course to begin treatment of this ore during the second quarter of 2015.

We have now driven approximately 240 metres on the first development level and I am encouraged by the initial results. A surface diamond drill programme has also now commenced, which will significantly enhance our understanding of the deposit, in particular the extent of the strike and the longer term production potential of the Sao Chico deposit.

From a permitting viewpoint, officials from the Departamento Nacional De Produção Mineral (“DNPM”) have recently visited the site. We received notification late last year that our Final Exploration Report for Sao Chico was approved, and as this is the first and most critical step in the conversion of the Exploration License to a Mining License, we are now well underway. The completion of the Plano de Approvimiento Economico is the next major step in the process. The Guia de Utilização (a trial mining license) remains in place, and therefore allows all mining operations to continue.

As Palito is now in regime and the Sao Chico development is looking encouraging, the next three quarters should show production increases on this first quarter. We expect to see Sao Chico enter commercial production later in the year. Our 2015 production guidance of approximately 35,000 ounces and All-in sustaining cost guidance of US$900-US$950 per ounce is maintained.

Click here to read the Serabi Gold (AIM:SRB,TSX:SBI) press release