Serabi Gold Announces Major Agreement with Indigenous Communities for Coringa Project Development

Serabi Gold plc is a Brazil-focused gold mining and development company with projects located in the Tapajos region of northern Brazil. The company recently announced a significant agreement with indigenous communities that paves the way for the development of its Coringa gold project. This agreement could be a major catalyst for the company and presents a compelling opportunity for investors.

Details of the Agreement

The agreement was signed between Serabi and representatives of the Baú Indigenous Territory, including the Kabu Institute and Mantino Indigenous Association. Together, these groups represent all of the communities within the Baú Territory where the Coringa project is located.

The agreement states that the indigenous communities will support the long-term development of Coringa and not take any actions to suspend the project. This is a major endorsement, as previously there had been uncertainty about the project due to restrictions on licensing from Brazilian authorities related to indigenous concerns.

Specifically, the agreement outlines that existing licenses granted to Serabi for Coringa are valid. Over the next 180 days, the parties will complete all remaining consultation with indigenous groups in compliance with ILO 169, an international convention on indigenous rights.

The parties will also cooperate to obtain any additional permits required and not prevent authorities from analyzing license applications. According to the press release, the agreement has already been approved by relevant Brazilian authorities, including the public prosecutor's office.

Importance for Serabi Gold

Importantly, Serabi stated that the agreement "significantly reduces uncertainty and provides a strong platform for the Company to move forward with confidence."

The Coringa project hosts a high-grade gold deposit with reserves of 288,000 ounces. Serabi has completed a feasibility study showing an open pit mine with average annual production of 38,800 ounces over an initial 8.4 year mine life. The mine is projected to generate over $200 million in free cash flow with a rapid payback of just 1.4 years.

With the indigenous agreement in place, Coringa now has a clear path forward to production. This is a major milestone for Serabi, as Coringa has the potential to significantly grow the company's production profile and cash flows.

Serabi's existing operations at its Palito Complex produced 27,000 ounces in 2022. Coringa's added production could nearly triple Serabi's total gold output once the mine is operational.

Opportunity for Investors

For investors, Coringa's exceptional economics and short payback period make it an extremely attractive gold development project. The indigenous agreement significantly de-risks the pathway to production and first gold pour.

With Coringa advancing and its existing operations generating solid cash flow, Serabi Gold represents a compelling investment opportunity. The company has a clear growth trajectory, and the shares trading at a discount to peers.

As Serabi Gold moves towards unlocking the value of Coringa, investors have an opportunity to position themselves in a high-quality gold developer on the cusp of a major expansion. The recent agreement is a watershed moment, and investors should take a close look at Serabi while it remains under the radar.