Transcript: Serabi Gold (SRB) - Improved Quarter and Increased Cash Balance

Morgan Leighton
October 16, 2021

Serabi Gold is a gold mining and exploration  company focused on the evaluation and development of gold projects in Brazil. The company commenced development of the Palito orebody late in 2012 with commercial production of the Palito orebody effective from 1 July 2014.   The company also has gold production at its satellite Sao Chico orebody as of 1 January 2016.  Combined gold production from the Palito Mining Complex is approximately 40,000 ounces per annum.

Serabi Gold also has some news on their new project Coringa which is a gold project 200km away from Palito and will be a similar project to Palito. The addition of the Coringo deposit will be a step change for the company, increasing production from 40,000-80,000 per annum.

The company has generated good cash flow and had the equity placement in March ‘21 which raised money to repay the convertible land stock and finalise the purchase of Coringa. All other costs for operational expenses, exploration work and development work has been paid for from existing cash flow.

Coringa is advancing well and the intention is to develop the greenfield project, prove the continuity of the deposit and see the orebody. The company is hopeful that this deposit will be able to be mined in a mechanised way which will simplify the project and improve economics.

The development at Coringa can be funded by cash flow up until the end Q2, 2022, after which some additional finance will be required to complete the building of Coringa. Serabi aims to have everything aligned by Q2, 2022 ready to build Coringa and put the project into production.

Serabi Gold is always interested in potential M&A opportunities and now that the company has a second project, Serabi is starting to become very attractive to M&A activity. With the addition of Coringa, the company can see a pathway to doubling their size to a core level of production in an interesting area of the world which is starting to attract interest from other companies.

We Discuss:

0:00 – Company Overview

00:52 – Headline Numbers, Brazil Grounds & Timeline

08:33 – Drill Contractors, Growth Story & Backups

20:54 – Push Backs, Current Ranks & Open Pits

25:23 – Potential Suitors, Current Ambitions & Marketplace

33:50 – Outro

Michael Hodgson: Hi, I'm Mike Hodgson, I'm the CEO of Serabi Gold and today, I'm joined with Clive Line, CFO of the company too. We'd like to talk a little bit about our activities in Brazil. Serabi Gold we operate a high-grade Gold deposit in northern Brazil state of Mineração Palito, we’re producing close to 40,000oz. It's been a very encouraging year after the difficulties of 2020. And as well as that, we've got some news on our new project Coringa Gold project about 200km away from Palito, which is going to be very similar deposit. It’s going to be a very meaningful step change for us increasing our production from 40 to 80,000oz. And we believe with some organic growth around the edges up to 100,000oz. As well as this we wanted to provide an update about our exploration activities in the region as well which are also very exciting.

Matthew Gordon: Mike, Clive lovely to have you back on the show. Good to see you guys. I wanted to catch up, saw the press release this morning, I thought it might be worth just understanding that. And I kind of want to understand, obviously what you've achieved there, but also look at a few topics and those would be parts, pits, planning, power and possible M&A, there you go, the five Ps. That was to give me some structure to this conversation actually. Let me start with Clive, give us the headline numbers that you think we should be looking at and I want to talk to you about some of those things.

Clive Line: I think the most encouraging thing that we've got at moment, Matthew is through positive cash flow continuing to come out. We've generated very good cash flow, despite everything during 2020. You'll know that we had the equity placement in March of this year, raising money too. And we’ve used those funds to repay the convertible loan stock and to finalise the purchase of Coringa. But that's really all that money's been used for at this moment. In time, all of our other activities, all the operational costs, all the exploration work that we've been doing this year, all the development that Mike's gonna be talking about on Coringa that we've got, will be paid for out of our existing cash flow. And actually, we're almost a million dollars on that as well this year, even after all of that expenditure. So we're doing very well, our production for the last quarter of 9000oz were on target to guidance around 35 and we're generating positive cash flow out of everything going forward.

Matthew Gordon: Brilliant, thanks for that. If I look back to pre-COVID, you were doing 10,000oz per quarter, on average across the year, that's where you're at. You're getting back up and close to those sorts of numbers now, but it's still not quite there yet. How are things on the ground in Brazil? Is it back to normal? Are you playing catch up here or is it just still a little bit hard work, Mike?

Michael Hodgson: Well, I think I'd be sort of lying if I said it's absolutely normal and back to it's absolutely fine. I think we said a number of times last year when we had interviews during the pandemic, we were initially it was really tough and challenging and how are we going to keep operating. And I think it became clear that our remoteness because we're in a fairly sparsely populated area of Brazil where people really don't move around. And with testing it became possible to actually control the virus and actually continue relatively normally. Admittedly, there were challenges we obviously didn't produce what we budgeted, but I think we got sort of 75, 80% so that was pretty good. That wasn't the same story in the south of Brazil and south of Brazil where you’ve got all the urbanisation, big population centres they had just as big a problem as Europe did and North America. They had shutdowns, lockdowns sort of fabrication and manufacturing basis stopping and we never had that in the north but in the south that occurred. Now that's where a lot of the equipment that we use the ancillary equipment and supplies come from. And you know, to use the new phrase supply chains that we have seen all the problems in Europe and the UK, I don't have to tell people about the fuel problem recently and the way the supermarket shelves are half empty half the time. It's very, it's really quite astonishing how quickly something can become a crisis. Now in Brazil, we rely on a lot of small stuff mechanical parts, which aren't huge capital items, but needless to say they are very significant in the mining operation. And we are say still suffering a bit of a hangover from that and we've got a lot of stuff on backorder which we’re just waiting and waiting, we're doing the best we can. It is improving, but this supply chain issue is very, very relevant in Brazil where we are as well as has been in the UK. As I say, I think Brazil's probably things are relatively better in north but there's catch up to be done. And we're doing our level best, but it will have, it has had an impact and I've put in the press release that our development is a little behind and as a direct consequence. The drilling on the exploration efforts as well that's not although we've had some good releases some good results and we're encouraged by what we're finding, we've not been able to draw a rig we actually want to do either. Direct consequence of the drilling contractor, it's a very good drilling contractor, 3rd biggest one in the world, they too are not immune from this problem and they have struggled to keep the rigs turning due to getting parts. It's improving but we're having to live with it.

Matthew Gordon: Well, this is why I wanted to talk about parts, because we've heard this from other companies operating in Brazil that they're struggling to get the pieces. Not significant, they are small things like we're talking about filters literally, and not expensive things Clive has got the money to pay for it but you can't get them. And I'm just wondering in terms of the planning bit of the P is how do you work your way around that one or do we shareholders or investors have to say it's just got to work itself out kind of as you say the recent fuel crisis here in the UK. It works itself out but it's gonna take some time and if so, how long are we looking at?

Michael Hodgson: Well, I think Brazil is pretty much back to normal now from what I've seen and I'll be going again soon. We are sort of getting half what we need, we are getting stuff now where before we weren't getting anything and we're just robbing type thing keeping faces going but now we are beginning to get sort of limited supplies not the full amount. I mean last year before nobody knew how long this was going to last and this issue we've now got we were fortunate in all the essential consumables like to keep the plant running and things like that chemicals and sort of mill equipment etc we got all that. We've always had a nice buffer but you know we're not BHP, Vale, we can't have a stores inventory, we'd like 5M, $6M worth of stock to have immunity to all of this and when we keep a sensible amount and which is served as well but I don't think anybody expected sort of a delay like we have today.

So there are some things, some items today which we've got very close to sort of running out of but we've just about kept going. It's had an impact but as I say I'd like to think by going into the first part of next year we'll be back to pretty much normal and normal business will be resumed. I don't want to sort of create any kind of panic I mean our development rates we set ourselves a very aggressive target in 2021 to ramp up production in 2022 and it was a super aggressive. We'd never even got close to these targets which we set ourselves. Now the parts have impacted on that, that said we're still at a rate we've always done so it's not it's by no means disastrous at all. It's just we're sort of at normal development rates and we wanted to be at exceptional development rates and that's been the difference. So we'll just have to move our targets from 2021 into 2022 and I mean that's what we'll do but I think our productions been not impacted by that and the development has been by no means this problem at all it's not a disaster at all.

Matthew Gordon: Right so if I look at the precious metal markets, all equities have come off, you guys have come off and moving sideways for the last 3, 4-months which I guess is a win for you in that sense, but you've been talking the game of moving from 40,000oz to 80,000oz with the acquisition of Coringa. It's been a couple of years now ,I guess people are gonna want to see this kind of your ability to drive the growth and production from that. They're also going to want to see you and we've talked about it a couple of times the exploration potential here. So something you just mentioned which is the drill contractor 3rd largest non-significant struggling to get parts so in terms of the planning bit can you go to another drill contractor and say to them hey, why don't you pick up where these guys are struggling, is that a possibility just to drive this growth story?

Michael Hodgson: I don't think it'll make any difference with the drilling contractor we’ve got is very good. They got lots, they got plenty of capacity, plenty of rigs. I think we'll find the same problem everywhere and I don't think it's a long-term problem. I think they will get this resolved and we will stay with them. They've been very good in the past and they'll be good again in the future. So I don't want to suddenly switch horses just to try to solve of what I see is a very temporary problem so I wouldn't do that.

Matthew Gordon: So are we are putting exploration on the back burner because you need to focus on helping Coringa move forward? I mean, how are you planning it?

Michael Hodgson: No we'll climb to the very beginning, we've done very well on our use of cash and where we were funding everything out of cash flow at the moment, pretty much. The Gold price has been kind to us, exchange has been kind to us, we're advancing Coringa. And we can't build Coringa out of cash flow purely so what we're doing at the moment, I'll just talk about Coringa momentarily, we are really pleased to put it into the development finally get on the ground. In July, we started the portal on the first ore body called Serra, that's now into hard rock going underground. There are some pictures in the press release on that too. And I did a video around 2-months ago on that, and that's now advancing really well. We should hit the ore in sort of late October, early November all being well. And the intention there is to actually finally put some developments into what is a Greenfield project. So it's going to get people comfortable with a deposit that's been evaluated purely by drill holes, prove the continuity, see the ore body. And as I said to you before, you know, we think all the studies that we've done at Coringa, the PFS done by Anfield/ Equinox before we bought in 2017 and all the subsequent Economic Studies that we've done, have all assumed this would be selectively mined.

That means sort of slow, jackleg very accurate mining, but quite slower and more expensive. We think there's a real shot at possibly applying a more mechanised method to this deposit. We can't do that until we see the ore body but we're hopeful that some of this deposit can be mechanised, mined in a more mechanised way, which will obviously improve project economics on that and simplify the whole thing and make life a lot simpler for us. We also will collect when we're doing all this underground development in Coringa in this last quarter and going to Q1 next year, we will actually collect a bulk sample of the ore, which we will actually be able to truck up the road 200km to our ore sorting facility, we have at Palito. We will actually be able to test the amenability of the Coringa ore to ore sorting as well, indications are from all the drill hole that we've gotten this 50,000m of that, that that will work. And if that does work, then that will actually make the project economics better as well. It means we'll be processing less material at a higher-grade, producing less tailings, it can only be a good thing. So this is the real push and we can certainly fund all of that up until sort of, let's say end of Q2 next year out of cash flow. And the third spoke in the wheel of that is to actually that will hopefully get a number of lenders interested in providing the additional finance we need to actually complete the building of Coringa. And in parallel to all of that, just to make clear, we've got the licence to actually go underground and start the mining. We haven't got the installation licence for the process plant yet.

The process plant is at Coringa on surface being remediated, semi ready to be assembled and installed. We've just submitted our application for the installation licence and we anticipate that we will hopefully get a positive on that in some time towards the end of Q1 next year. So the whole idea is to have everything aligned by in Q2 next year. So essentially, we'll have the mine well into development, we'll have a lot of those questions answered regarding the mining and the processing improvements. And we'll be ready to start the actual build of the process plant and Coringa at that point, we'll be going hopefully with the cash that we've got, the cash flow that we're going to generate in the meantime and going forward and some top up debt from the underground development but based on the underground development. So hopefully that will be sufficient to actually build Coringa and put into production. We do not plan to raise any more equity for this. We plan to do all this with no more equity raising, which is good news for existing shareholders that's the intention.

On the exploration side, as I say we've had some really good successes this year. It's not been as fast as I'd hoped for all the reasons I said with the drilling etc. We have focused principally on Brownfield exploration and Brownfield exploration is basically drilling in and around existing deposits. The Palito ore body going towards the south, towards a prospect we've got called Currutela which looks really interesting to grow our Palito resource and expand that mine which is important. And at Sao Chico, we're doing the same, we’re essentially drilling have been drilling to the west of the ore body which has been pretty successful. And a little further west, this area called Sao Domingos which looks like potentially could be very interesting. We’ve parked that momentarily, because we want to do an airborne survey just to actually help us better focus the further exploration there in 2022 which is good. But one thing I want to mention about the exploration, this is something which you'll recall that we’ve looked at the regional exploration, the Greenfield exploration in the past, and we've got this terrific array of large anomalies, large geophysical coincidental geochemical anomalies, which could be indicative of scalable bulk type deposits. And you will recall that just up the road, we have one of them, well we don't have one of those but the region has one of those in deposit called Tocantinzinho, which was in the hands of Eldorado for a number of years, and it's just got sold to G Mining, who have just moved into the region. And that's been a great news for everybody, it's breathed new life into the area.

And I'll tell you why they've done this, the Brazilian government and under Bolsonaro, despite all of his international reputation, he has brought a lot of infrastructure to the north of Brazil. The road has really improved under his time, it's all been asphalted, our access to site is amazing. Now it's really easy. And he's also got contracts signed for the power upgrade for the whole region to occur by 2025. It's no coincidence G Mining bought this on the back of that because without the power upgrade, nothing's going to happen in the Tocantinzinho. So with those power contracts now signed and agreed, we believe the power is coming as do G Mining and I think that puts a complete new complexion on the Tapajós. This is an area with unbelievable artisanal Gold, placer gold production, 3rd largest placer Gold field in the world and 30Moz produced. No real systematic exploration, no big finds, except Tocantinzinho to date, why? when nobody's gone there, it's because of the power issue and the access issue. The access has been solved, the power issue is going to be solved and it's no coincidence you've got Anglo American in there now taking up land, Nexa, G Mining as well and we want to tap into some of that ourselves. We know that in our Palito complex we've actually got certainly Tocantinzinho look alike. So a big part of next year’s exploration effort is going to be diverting resources to looking at this and we think we've got 6 targets that are certainly have the same all the same signature, let's say from a geochemical and geophysical perspective, as Tocantinzinho does. So we will certainly be looking at too, focusing on scale, log exploration success in our backyard.

Matthew Gordon: Okay, I shouldn't have given you this heading at the beginning, you covered them all. So what I think I hear there is and I'm not being dismissive about the work that's being done at Palito under difficult conditions still. Palito is, focus is on getting those ounces produced, right, and you've outlined some of the conditions in that you're doing that under. Coringa sounds like you've got the money to do that development work, maybe not at the pace that you want, because again, things like drilling, etc may be holding you back a little bit there underground drilling potentially. But at some point that does come and join the party, you got to go way over and get financed or at least talk about financing to get that thing up and running. Exploration has been knocked a little bit because parts with your contractor not necessarily available, but that is very much on the agenda. We didn't talk about building back up the inventory levels, because you did kind of wiggle your way through that when the times were tough. So can you just talk about that?

Michael Hodgson: Well, that's really the resource inventory you're talking about? Well, certainly that's what part of the underground well, in a way we are doing that a lot. The Brownfield exploration we're doing is really focusing on resource growth, that's what it's doing. So at Sao Chico, that's exactly what we're doing we're adding inferred resource. As we go step out drilling to the west, it's outside the mine limits, but it's actually within range of the mine limit. So it just allows us to extend the mine in the case of Sao Chico to the west. And at Palito we're doing the same, we’re drilling beyond the mine limits and just going away from Palito towards the next deposit. But again, that's adding inferred resource ounces to the south. And with those results, we'll be building sort of mine development plans how best we attack those resources and then do the inferred resource to reserve conversion process which is all done by development. Where that's going to be new accesses from surface or we can use existing infrastructure remains to be seen. But we're focusing on really in both sites, just that to put some runs back on the board in terms of inferred resource ounces, and then basically see how we can actually do the capital development and turn those into reserves. So, yeah, but that said, I mean, we've just another resources statement, I mean like I always say this to people, visitors, etc and investors, you know, we've maintained about 400,000oz or 500,000oz resource inventory, even with what we gobbled up in 2020 without a lot of development, we've still maintained about 450,000- 500,000oz total resource inventory, and we still have that today. So, no alarm there yet and we hope to build that up, not to stay at that we want to increase. Palito and Sao Chico is the day job and Coringa too that's the bread and butter of the company. You know, it's our desire to actually not just have that, we want to have obviously, bulk scale deposits surface mining as well. That's the whole idea of, we're not abandoning mining.

Matthew Gordon: Can we talk about that, because we have talked about it, I think, well tipped our hat towards it in previous conversations in regards to open-pit, obviously lower-grade, you talked about having like 6 targets. You know, what you've got to do, but are you being held back from doing it? So it just kind of feels to me, if you can come to the market, at some point to you'll tell me when, and say, hey, we think we've got a big open-pit option here, you probably get a quite a good reaction to that, I suspect. So have you got enough money to do the things you need to do? Or is that a question of I haven't got the labour, the parts, the capacity at the moment, but at some point, once we've kind of gone through a process we will let you know how we're going to move forward. I mean, how quickly can that happen?

Michael Hodgson: Well, I think you have to be I mean, we don't want to be gung ho about it, because we won't have enough money to do it. And just by drilling holes, and just gung ho on those 6 targets would not be the right way of doing it. It's not the way that we would do it anyway, it's not the way we would afford to. But what we will do and have done a lot and we've got a lot of experiences that we really got the recipe for finding these types of deposits. And we've had them already and we've drilled some and some haven't been successful, they've been very low-grade, but ultimately, they've been the right rocks, the right target, etc. So we're focusing on what's called deep geochemistry where we're basically drilling so if you’d imagine we've got an airborne geophysics survey, magnetic survey, electromagnetic survey, sometimes we've got a ground geophysics anomaly as well. Then we've done geochemistry on surface or like 1m down and got a really nice geochemical anomaly, Gold and Copper, which is always there. What we're looking for and in some places we're also looking for Molybdenum, which is a really good pathfinder element for porphyry Gold type deposits, which is what we're talking about here. So what we're now going to do is we're going to drill, basically deep geochemistry, which is not like an auger rig, but it's called a RAB rig where you drill holes down on a much tighter spacing. And you actually sample the profile from surface all the way down to the rock head, which is normally about 20m series of composites. So you build a really good third dimension, geochemical anomaly as well. Now, that will really bullseye the target before you go in there with your drill rig, spending big bucks, diamond drilling it. So we're going to do that on all 6 targets. Now, I know that might not be so exciting to the non-technical investor but really, it's the right way of doing it because you won't waste money on wasteful metres and you'll really hone in on the target and drill it. And the chances of success with those drill programmes will be…

Matthew Gordon: Explain that to Mike, because you've got a limited budget or you’ll have a budget for that, and wouldn't it be better to go and say I'm going to have to 1 target because I think it has got them the most chance of success of making a discovery. You get a market segment a discovery, boom, lights go on. If you take your time and saying I'm going to do all 6 at the same time, does that suggest that you feel some way that each is going to inform you about the kind of some of the parts is it all connected, are they nearby?

Michael Hodgson: They're all equally ranked at the rate of this sort of oxide sort all the auger drilling is so fast, you rip your way through them and basically as you're analysing the first one you're already drilling the second or third one. At the end of it you just kind of like rank it and go for it because some will be better than others and you can't really tell at the moment, it’ll just actually hands those anomalies and will have a better understanding how and where best to drill. But at the moment I mean they're all looking really I mean we've got rock chips on surface over some of these targets are 1g just in the rocks, you know chipping this on the surface. So there's Gold, there's loads of Gold there somewhere. So this geochemistry will actually give us just a, it's not expensive and it's fast. So the whole point is it just gives us it's one more step before we drill. What those 6 targets might become 3 super exciting and 3 mediocre after that programme so it just actually it'll allow us to wisely drill then those 6 targets later on.

Matthew Gordon: Okay, you're very technical and you love the geology and you know that's your thing. The market are looking for lots of different signals from you as a board. We've spoken, obviously talked about Tocantinzinho with regards to G Mining and I think you're coming on a panel with them in a few weeks I think as well. We've spoken with TriStar recently who said, you know what, we'll get our Pre-Feasibility out and then we're pretty much looking around for someone to take us out. We’ve spoken to other players in the region and it just seems to be the kind of perfect storm for a lot of M&A activity. I mean, G Mining being the first I suspect a few moves in here. You've got to work out and say, hey, do we try and do things the right way, geologically? Because that's the right way to do it and will get the best results possible or do we pretty yourselves or put a dress on, put a lipstick and make ourselves attractive to potential suitors? or indeed go at hunting for your own deals as well? Again, it seems it seems like Brazil and mining just generally at the moment, a fantastic 2020 a kind of slightly more subdued 2021 people have got cash, have got a good story, good management team. M&A, seems likely, do you feel that is the case?

Michael Hodgson: Well, we were always got an eye half open on that, obviously. I think I think Coringa is helping an awful lot to actually make as people can see scale coming, when we were just a small, little 40,000oz orphan with high costs in a difficult location, not a lot of power. I think someone said a while ago that we, Serabi, were a nice little company that produced 40,000oz, drilled a lot of holes but never really got any bigger. Well, this is the moment we're getting bigger. We are doing it, you know, and Coringa will be the platform to do that. The exploration is the icing on the cake, and exploration to date has largely been resource replenishment from what we've mined. So a tidy story, a tidy company 40, going to 80, etc. Still not, out of the park exciting, but you know, decent. I think the Greenfield exploration I've just described, and this sort of like changing the Tapajós with G mining and the power coming etc and this kind of ambition change that we've now got, I think is important, really important. It's something I've wanted to do for a long time because I think I'll be gutted if I leave Serabi, and then someone comes along and finds a porphyry Gold deposit, just in 5-years’ time type thing, which is almost I think, a real, real strong possibility with that's exactly what will happen. So we want to find it, we want to find it.

Matthew Gordon: Okay, but what it's like before COVID came along, there was kind of resurgence there where people just could see a nice runway. Covid has come along and interrupted the flow, the momentum, the growth? Are you saying now, we talk about ambition, are you talking about your own ambition to grow what you've got here or other people's ambition to kind of roll up a bunch of perhaps financially or physically stranded assets?

Michael Hodgson: Well, I think all those companies that are there, you know, they've got the same belief. They believe in the region, and G Mining have gone there because they believe in the region. They think we're the first mover in here or we're the first mover, we’re the first hard rock producer, but they're going to be the first company who have now got, let's say, what's considered to be the pedigree asset in the region. And I think, it's great news for the Tapajós in general. I mean, in terms of M&A, yes we're always looking at M&A that makes sense. I mean, every junior CEO, every junior company will say they're undervalued, etc. I mean, we like what we're doing, but we won't turn a blind eye to M&A if the right company comes along and says you know, we like to look at you etc. Because scale is everything, isn't it? It really is. We've known for a long time, battling along with 40,000oz was really tough, you make a little bit of money, but never enough to do anything seriously. But Coringa, you know if certainly people can really see that pathway to doubling our size, then we've got interesting core level of production. And then I think what's coinciding with all of this is this reinvigoration of the Tapajós’s reputation, it's an area that people have wanted to go, we've known loads of companies that are major or mid-tier companies that have just always wanted to be there. But they've just been a little bit scared of the difficulties. I think those difficulties are going to go away and I think with that there will be a charge in M&A. But that's kind of going to be the catalyst, I really do believe in the meantime, we'll just do our job, which is build Coringa and hopefully get a Greenfields success on the way. And if that means someone comes along and sort of wants to do a deal with a Serabi, fine but if they don't fine.

Matthew Gordon: Clive talk to me about what's happening in the marketplace, in terms of conversations with brokers and banks, etc. I know you’re good for cash for now but you've always got one eye to the future about what you're going to need to be able to do with Coringa is….what’s the tone and the mood in the marketplace at the moment? because 2020 people were like throwing money around? It was easy.

Michael Hodgson: Well, I might pass that question to Clive actually, because he's the guy that's been sort of talking to the potential I mean, as I said before, we're looking, we've got pretty good feeling that we'll be able to fund, plug the funding hole for Coringa out of the debt finance or some other finances. I mean, Clive certainly got closer on both finger on the pulse on that one.

Clive Line: Yeah, I think the answer to that is we had some sort of outline term sheets in our hands earlier in 2020. Groups that are reputable well known banking groups so that's very encouraging for us. And actually, there have been more that have started to approach us, in actual fact, seeing Coringa, seeing our development stories, seeing as moving that forward and wanting to get involved. As we've said, the great thing for us is that Coringa is fairly low Capex. We've got a $25M bills cost and based off the PEA and you'd like to think that's not too difficult for a company of our size to be able to plug that sort of funding gap and debt gap. So it's encouraging that we now got 4 or 5 names circling around that are interested in helping us to fund that and moving that forward. And we're in conversations with those as we speak. Outside of that, there are other opportunities we can still look at, and there's been a lot of money and a lot of Royalty deals struck as well and we'll continue to talk to people like those as well, because that may be another good source of capital to either sit alongside or replace in some ways the debt. I tend to think it'll be a mixture of the two if we go down that particular route but again, that's other options that are available to us.

Matthew Gordon: Beautiful. Gentlemen, I appreciate the update and obviously a lot of moving parts. Mike, you mentioned you’re probably heading out there soon but Clive so are you, what are you off to see?

Clive Line: I'm down there, it's been a long while since I've been down. Obviously there's been a fair few changes going on, which everybody will be aware of. So we've got a change in our management team down there and we've been having daily conversations with them, but it's always good to sit down and really spend some quality time with them. So we'll be down there in November.

Matthew Gordon: Audit tick, gone.

Clive Line: Audit sorted out, unqualified opinion, which was very good at the end of the day. I struggled to get there but yes. I struggled to get there because as Mike said, unfortunately, Brazil has I suppose in some ways the same as the UK. People have been remote working and that's made life a little bit more difficult, a little bit more testing to get the work done that needed to be done to get everybody into the right space and comfortable with everything that's been happening. But yes, that's all behind us now and we're moving forward.

To find out more, go to the Serabi Gold website