Beyond the Core: How Serabi Gold Is Pivoting to M&A and Porphyry Discovery

• Serabi Gold has completed the filing of NI 43-101 Technical Reports for the Palito Complex and Coringa Mine, formally documenting a consolidated mineral inventory of 1.4 million ounces following the addition of approximately 400,000 ounces from 2025 drilling.
• The company holds US$64.4 million in cash, is debt-free, and expects to fund its Phase 3 plant expansion, mergers and acquisitions (M&A) activities, and Matilda exploration programme entirely from internal cash flow.
• Phase 3 plans include expanding milling capacity at the Palito Complex from 650 tonnes per day to 900 tonnes per day at an estimated cost of US$5 million, with completion targeted for the fourth quarter of 2026.
• Serabi has expanded its acquisition search beyond Brazil into the wider Americas, focusing on near-term production or producing assets while maintaining strict capital discipline and strategic fit requirements.
• The Matilda copper-gold porphyry prospect has an estimated geological potential of 81 million tonnes at 0.28% copper, including a higher-grade core of 21 million tonnes at 0.40% copper, though it remains a conceptual exploration target requiring further drilling.

What Has Happened

After several years of growing and validating its resource base, Serabi Gold (AIM: SRB | TSX: SBI | OTCQX: SRBIF) is entering a phase in which acquisitions and a copper-gold porphyry discovery could become the company's next growth drivers. The filing of detailed National Instrument 43-101 (NI 43-101) Technical Reports for both its 100%-owned Palito Complex, dated June 1, 2026, and 100%-owned Coringa Mine, dated June 2, 2026, on SEDAR+ formally closes the chapter on Phase 2 of the company's three-phase organic growth strategy, which targeted a consolidated mineral inventory of 1.5 to 2 million ounces. The 2025 drilling programme alone added approximately 400,000 ounces, bringing the consolidated total to 1.4 million ounces.

With a 2026 estimated free cash flow (FCF) yield of 26%, a debt-free balance sheet, and US$64.4 million in cash, management now has the financial flexibility to pursue three simultaneous growth tracks: a Phase 3 plant expansion funded entirely from internal cash flow, disciplined mergers and acquisitions (M&A) across the Americas, and greenfield porphyry exploration at the Matilda prospect. None of these tracks requires equity issuance or additional debt.

Securing the Organic Foundation

The Technical Reports validate the resource base that underpins Serabi's hub-and-spoke processing architecture, in which ore from both the Palito Complex and the Coringa Mine is pre-concentrated through ore-sorting before being processed at the Palito Complex, 340 kilometres by road from Coringa. The consolidated 1.4 million-ounce inventory is the foundation against which the Phase 3 expansion decision will be sized.

Phase 1 targets consolidated production of 53,000 to 57,000 ounces for 2026, driven by the ramp-up of Coringa ore throughput. Phase 3 involves expanding milling capacity at the Palito Complex from 650 tonnes per day to 900 tonnes per day by adding one ball mill, at an estimated cost of US$5 million, with completion on track for the fourth quarter of 2026. Management has indicated it will target a consolidated mineral inventory of 1.5 to 2 million ounces before committing to the full scale of a more significant plant expansion, framed as a 2027 decision point.

The M&A Strategy & Acquisition Discipline

With organic production growth underway and the balance sheet fully de-leveraged, management is openly discussing inorganic growth as the next strategic layer. The company's M&A search has deliberately broadened beyond Brazil into the wider Americas. 

Chief Executive Officer of Serabi Gold, Mike Hodgson, explained that the rationale is structural:

"I think one of the challenges we have is that there aren't a lot of the right-sized projects and operations for us, partly because Brazil is dominated by larger companies. There aren't many juniors in Brazil, so therefore there aren't many junior-sized projects in Brazil or operations in Brazil. So we move into the private areas, and then you've got the game of valuations, because that's the next thing."

Current Acquisition Criteria

Serabi Gold has been specific about what it is looking for. The focus is on near-term production or producing assets, with openness to both underground and open-pit operations. Serabi has operated as an underground narrow-vein miner for over 20 years, and its willingness to evaluate open-pit assets signals a deliberate effort to broaden the addressable acquisition universe and lower the all-in sustaining cost (AISC) profile of any acquired operation. 

Hodgson clarified the parameters in the same interview:

"I think at the moment we really want to focus on near-term production or producing, that's certainly it. Underground, open-pit, fairly ambivalent, too. The underground, we know it well, we're good at it, so that's a good thing. Right? Open pit diversifies technical risk, makes life a bit simpler, and reduces AISC."

Despite the expanded geographic and technical search criteria, management has been equally explicit about what it will not do. The primary risk to any acquisition strategy is overpaying or acquiring assets that introduce operational complexity without commensurate returns - a risk Hodgson has publicly acknowledged by noting the company has evaluated a significant volume of targets without yet acting. Capital discipline and strategic fit remain the binding constraints.

Matilda: A Different Scale of Optionality

The Matilda prospect introduces a category of growth potential that is fundamentally different in scale and economic profile from Serabi's existing underground gold business. A defined resource at Matilda, even at a fraction of the geological potential outlined to date, would require evaluation under a bulk-tonnage open-pit framework rather than the high-grade narrow-vein model the company currently operates - representing a qualitative expansion of what Serabi could become.

The geological basis for that potential is a 4-kilometre-by-4-kilometre geochemical anomaly with a 2-kilometre-by-2-kilometre gold-copper-molybdenum-tungsten core. Initial drilling in 2022 confirmed the copper-molybdenum-gold porphyry discovery, and a 2023 programme of 21 holes totalling 7,598 metres followed up, with 12 holes intersecting copper porphyry mineralisation. The estimated geological potential stands at 81 million tonnes at 0.28% copper, including a higher-grade core of 21 million tonnes at 0.40% copper. These figures are a conceptual exploration target, not a defined resource under NI 43-101 standards, and remain subject to further drilling to confirm. 

What to Watch Next

The single most important near-term catalyst is the final LI operating permit for the Coringa Mine, targeted for issuance before the end of 2026 or in early 2027, based on management guidance. As the last outstanding permitting step, its approval would remove the principal regulatory risk at Coringa, enable full implementation of the hub-and-spoke processing strategy, and validate the capital already invested in expansion initiatives. Given its central role in future production planning, the permit underpins the company's broader growth strategy and remains the key milestone for investors to monitor.

Beyond permitting, investors should watch for the planned consolidated resource update for Palito and Coringa in the second quarter of 2026, which could move the mineral inventory closer to the 1.5 to 2 million-ounce target range and influence future plant expansion decisions. Any follow-up drilling programme at Matilda would signal increased confidence in the copper-gold porphyry opportunity, while any acquisition announcement would need to be evaluated against management's stated priorities of near-term production, capital discipline, and strategic fit. As management has acknowledged, execution quality, including integration risk and valuation discipline, will be as important as completing a transaction.

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