Serabi Gold Delivers Strong Q2 Production, On Track for 2024 Guidance

• Serabi Gold reported Q2 2024 gold production of 9,003 ounces, a 6% improvement over Q2 2023.
• The company's Coringa mine contributes 4,752 ounces with plant grades of 6.25 g/t gold, proving Coronga as a major asset for SRB.
• Palito Plant also recorded quarterly processing of over 55,000 tonnes of ore - highest quarterly total to date.
• Serabi Gold maintains strong cash position of $12.0 million as of June 30, 2024.
• SRB's FY2024 consolidated gold production guidance is maintained at 38,000 – 40,000 ounces, with plans to clear path to 60,000 oz gold production.

Serabi Gold plc is a gold mining and exploration company focused on Brazil. The company operates the Palito Mining Complex, which includes the Palito and São Chico gold mines, and is developing the Coringa gold project. Serabi aims to become a mid-tier gold producer through organic growth and strategic acquisitions. With a commitment to responsible mining practices, the company strives to create value for shareholders while contributing to the sustainable development of its operational areas.

Q2 2024 Production Highlights & Operational Performance

Serabi Gold plc has reported strong second-quarter production results for 2024, demonstrating continued growth and operational efficiency. The company produced 9,003 ounces of gold in Q2, representing a 6% increase compared to the same period in 2023. This robust performance keeps Serabi on track to meet its full-year 2024 production guidance of 38,000 – 40,000 ounces.

The Coringa project, a key growth driver for Serabi, contributed significantly to the quarter's success with 4,752 ounces of gold production at impressive plant grades of 6.25 g/t gold. This performance underscores the potential of Coringa as a major asset in Serabi's portfolio.

A notable achievement in Q2 was the record-breaking performance of the Palito plant, which processed over 55,000 tonnes of ore – the highest quarterly total to date. This operational milestone demonstrates Serabi's ability to optimize its existing assets and increase throughput efficiently.

Serabi Gold is set for substantial expansion in the near future. The company has set its sights on boosting annual gold output to Unlocking Value in Brazil's Tapajos Region with Clear Path to 60,000 oz Gold Production by 2026, a marked increase from current production levels. To achieve this ambitious target, Serabi plans to leverage a dual strategy of enhancing existing operations and exploring promising areas adjacent to its current sites. This approach demonstrates the company's commitment to organic growth and maximizing the potential of its asset portfolio.

Financial Position & Cash Management

Serabi's financial position remains strong, with cash holdings of $12.0 million as of June 30, 2024, compared to $11.6 million at the end of December 2023. The company's net cash balance, after accounting for interest-bearing loans and lease liabilities, stood at $6.6 million, an improvement from $5.0 million at the end of 2023.

This solid financial footing provides Serabi with the flexibility to continue investing in its growth projects while maintaining a healthy balance sheet. The company's ability to generate positive cash flow in the current gold price environment is a testament to its operational efficiency and cost management strategies.

Coringa Project Advancement

The Coringa project continues to be a focal point for Serabi's growth strategy. Construction of the classification plant, including a crusher and ore sorter, is progressing well. The crusher is expected to be operational in August, while the ore sorter is on track to be commissioned by the start of Q4 2024.

This advancement in infrastructure is crucial for Serabi's plans to pre-concentrate mined ore at the Coringa site and transport a higher-grade product to the Palito plant for processing. This strategy is expected to optimize logistics and potentially improve overall recoveries and profitability.

Furthermore, NCL Ingeniería y Construcción SpA is progressing with an updated Preliminary Economic Study (PEA) for Coringa. This study will incorporate a revised geological resource and an economic assessment that outlines the planned use of the classification plant and processing at the Palito Complex. The completion of this PEA, expected in Q3 2024, will provide investors with a clearer picture of Coringa's economic potential and its impact on Serabi's future production profile.

Operational Insights: Palito Complex & Coringa

At the Palito Complex, while mined tonnages were excellent, grades were below forecast due to temporary challenges in the Chico da Santa sector. The company had to switch to mechanized bulk mining methods for safety reasons, resulting in higher tonnages but lower grades due to increased dilution. However, management reports that grades have been improving in May and June, with expectations to return to the 6-7 g/t Au range seen in early 2023.

Coringa continues to perform strongly, with mining now occurring on multiple levels (320m, 290m, and 260m) and development progressing on lower levels. The main ramp is expected to reach the 165m level in July, positioning Coringa with four development levels ahead of production. This extensive development work puts Coringa in a robust position for future production expansion.

The high payability (approximately 90%) of the Serra orebody at Coringa is particularly noteworthy. This high conversion rate from inferred resources to reserves provides confidence in the project's long-term viability and potential for sustained production growth.

Licensing & Regulatory Progress

Serabi has made significant strides in the regulatory aspect of its operations. In January 2024, the company received a three-year renewal of the GUIA trial mining license for Coringa, under which the project is currently operating. This renewal provides operational certainty in the near term.

Progress has also been made towards obtaining the Installation License (LI) for Coringa. Serabi, along with its environmental consultancy, Araca, has completed the Plano Basico Ambiental (PBA) and incorporated it into the Indigenous Impact Report (ECI). This comprehensive study has been submitted to FUNAI, the federal agency for indigenous communities, for approval. This step is crucial in advancing Coringa towards full-scale production and demonstrates Serabi's commitment to responsible and sustainable mining practices.

Market Position & Future Outlook

Serabi Gold's performance in Q2 2024 reinforces its position as an emerging player in the Brazilian gold mining sector. The company's ability to maintain strong production levels, advance key growth projects, and maintain a healthy financial position speaks to the effectiveness of its operational strategy and the quality of its assets.

The continued development of Coringa, coupled with the optimization of the Palito Complex, presents a clear path for production growth in the coming years. The forthcoming PEA for Coringa will be a key catalyst for investors, providing detailed insights into the project's economic potential and its expected contribution to Serabi's overall production profile.

Moreover, Serabi's focus on implementing advanced technologies, such as the classification plant at Coringa, demonstrates its commitment to operational efficiency and cost management. This approach is likely to enhance the company's competitiveness and profitability in the long term.

Conclusion

Serabi Gold plc presents an attractive investment opportunity for those looking to gain exposure to the gold mining sector, particularly in Brazil. The company's Q2 2024 results demonstrate its ability to deliver consistent production growth, maintain a strong financial position, and advance key development projects.

Key investment considerations include:

• Consistent Production Growth: With Q2 2024 production up 6% year-over-year and on track to meet full-year guidance, Serabi is demonstrating its ability to grow production consistently.
• Strong Financial Position: A healthy cash balance and positive net cash position provide financial flexibility for future growth initiatives.
• Coringa Development: The advancement of the Coringa project, including the upcoming PEA, represents a significant near-term catalyst for potential value creation.
• Operational Efficiency: Record processing at the Palito plant and the implementation of new technologies at Coringa showcase the company's focus on operational optimization.
• ESG Commitment: Progress on licensing and community engagement reflects Serabi's commitment to responsible mining practices.
• Experienced Management: The company's ability to navigate operational challenges and advance key projects speaks to the quality of its management team.

While investors should be mindful of the risks associated with junior gold mining companies, Serabi's track record of delivery, clear growth strategy, and strong asset base position it as an compelling option for those seeking exposure to the gold sector with potential for significant upside.

As Serabi continues to execute its growth strategy and advance the Coringa project towards full production, it has the potential to transition from a junior producer to a mid-tier gold mining company, which could result in a re-rating of the stock and create substantial value for shareholders. Investors should closely monitor upcoming catalysts, particularly the Coringa PEA expected in Q3 2024, for further insights into the company's growth trajectory and value proposition.