Serabi Gold Delivers 10,000oz Gold Production and Strong Q1 2025 Performance

• Serabi Gold achieved 11% year-over-year production growth in Q1 2025, producing 10,013 ounces compared to 9,007 ounces in Q1 2024, driven by significant grade improvements at both operating sites.
• The company generated strong financial returns with EBITDA increasing to $12.4 million from $4.7 million in the prior year period, while post-tax profit reached $8.8 million versus $3.6 million previously.
• Cash position strengthened to $26.5 million at quarter-end from $22.2 million at December 2024, despite repaying a $5 million loan and securing new financing at improved terms.
• Operational efficiency improved with cash costs declining to $1,269 per ounce from $1,461 per ounce in Q1 2024, while All-In Sustaining Costs decreased to $1,636 per ounce from $1,859 per ounce.
• The company benefited from higher gold prices, receiving an average of $2,908 per ounce during the quarter compared to $2,081 per ounce in the comparable 2024 period, representing an 18% improvement.

Serabi Gold plc (AIM:SRB) is a Brazilian-focused gold mining and development company operating two primary sites: the Palito Complex and Coringa. The company trades on three major exchanges and maintains operations in the Tapajós region of Brazil, with a focus on sustainable gold production and resource expansion through ongoing exploration programs.

Strong Operational Performance Drives Production Growth

Serabi Gold's Q1 2025 results demonstrate robust operational execution across both mining sites. The 11% increase in gold production to 10,013 ounces reflects improved mining efficiency and higher ore grades. The Palito Complex experienced a particularly strong performance with grade improvements of 32%, while Coringa achieved an 8% grade increase.

In the news release, CFO Colm Howlin emphasized the operational achievements, stating:

"Q1 2025 marked a strong start to the year, continuing the positive momentum from H2-2024. Gold production for the quarter totalled 10,013 ounces, representing an 11% increase on Q1-2024. This was driven by higher feed grades at both Palito and Coringa, supported by the first full quarter of operations at the Coringa classification plant."

The implementation of the Coringa classification plant proved particularly significant, contributing meaningfully to the grade uplift. This operational enhancement represents the company's commitment to optimizing processing capabilities and maximizing resource extraction efficiency.

Financial Performance

The financial metrics for Q1 2025 demonstrate significant improvement across key performance indicators.

• Revenue increased to $27.6 million from $20.2 million in the prior year period, reflecting both higher production volumes and improved gold pricing.
• Gross operating profit expanded dramatically to $14.5 million from $6.7 million, indicating improved operational leverage.
• EBITDA performance was particularly strong, reaching $12.4 million compared to $4.7 million in Q1 2024. This 164% increase demonstrates the company's ability to convert operational improvements into meaningful financial returns.
• Post-tax profit similarly improved to $8.8 million from $3.6 million, translating to earnings per share of 11.58 cents versus 4.80 cents in the prior year.

The company's operational efficiency gains are evident in cost metrics. Cash costs decreased to $1,269 per ounce from $1,461 per ounce, while All-In Sustaining Costs improved to $1,636 per ounce from $1,859 per ounce. These improvements reflect both operational enhancements and economies of scale from higher production volumes.

Enhanced Financial Position & Capital Management

Serabi Gold's balance sheet strengthened during the quarter, with cash and cash equivalents increasing to $26.5 million from $22.2 million at year-end 2024. This improvement occurred despite significant debt refinancing activities that demonstrate proactive capital management.

Howlin noted the cash generation capabilities:

"The strong operational performance contributed to cash generation of $4.2 million in the quarter, increasing the Group's cash position to $26.5 million at 31 March 2025, up from $22.2 million at 31 December 2024."

The company completed strategic debt refinancing during the quarter, fully repaying a $5.0 million unsecured loan with Itau Bank that carried an 8.47% interest rate. This was replaced with a new $5.0 million facility from Banco Santander at a reduced 6.16% interest rate, demonstrating improved borrowing terms and financial flexibility.

Net cash position after interest-bearing loans and lease liabilities improved to $20.9 million from $16.2 million at December 2024, providing enhanced financial flexibility for operational requirements and growth initiatives.

Gold Price Environment & Currency Considerations

The company benefited from a favorable gold price environment during Q1 2025, though currency movements provided some offset. The average USD gold price received of $2,908 per ounce represented an 18% improvement compared to $2,469 per ounce in Q1 2024.

However, currency dynamics affected local profitability. The Brazilian Real strengthened during the quarter, with the USD:BRL rate moving from 6.19 at December 2024 to 5.74 at March 2025. As noted in the company's analysis, "This strengthening limited the extent to which the stronger USD gold price translated into local currency margins."

The gold price environment continued to strengthen after quarter-end, with spot prices reaching approximately $3,300 per ounce by the time of the earnings release, suggesting potential for continued benefit from favorable commodity pricing.

Exploration Investment & Resource Development

Serabi Gold initiated its 2025 exploration program with $9 million allocated for the year and similar commitments anticipated for 2026. This represents a significant investment in resource expansion and future production capacity.

Howlin highlighted the exploration commitment:

"We also commenced our 2025 exploration programme, with $9 million allocated for the year and a similar commitment anticipated for 2026. Drilling activity is now underway at both Palito and Coringa. Early drill results from the programme have been encouraging."

The exploration program focuses on doubling resources at both the Palito Complex and Coringa, representing a strategic initiative to extend mine life and support future production growth. This brownfield exploration approach leverages existing infrastructure and operational knowledge to maximize resource development efficiency.

Investment Considerations for Serabi Gold

Market Position

The company's operational improvements position it well for continued performance enhancement. The successful implementation of the Coringa classification plant and ongoing development of new mining zones across both sites demonstrate operational execution capabilities.

Looking forward, the company maintains its exploration focus while continuing to optimize current operations. The combination of improved operational efficiency, enhanced financial position, and ongoing resource development creates a foundation for sustained performance.

The company's Brazilian operations benefit from established infrastructure and experienced local management, though investors should consider currency exposure and regional operational risks. The improved debt terms and stronger cash position enhance financial stability, while the focus on resource expansion addresses long-term sustainability concerns.

Key Takeaway

For investors evaluating Serabi Gold, the Q1 2025 results demonstrate several key strengths. The company has achieved meaningful production growth while simultaneously improving operational efficiency and cost metrics. The strengthened balance sheet provides financial flexibility, while the substantial exploration investment indicates commitment to future growth.

Serabi Gold's performance in Q1 2025 reflects operational excellence, financial discipline, and strategic investment in future growth. The combination of higher production, improved margins, and enhanced financial position creates a compelling foundation for investors seeking exposure to gold mining operations with demonstrated operational capability and growth potential.