Serabi Gold: Doubling Gold Production to 60,000 oz/year via Low-Capex Development Plan

• Serabi Gold is focusing on mining, crushing, ore sorting and trucking pre-concentrate from its Coringa project to its Palito processing plant, rather than building a new plant at Coringa
• This plan allows production to nearly double from 38,000 oz this year to 60,000 oz in 2-3 years, funded out of existing cash flow with no additional CAPEX
• An installation license to build a plant at Coringa is being pursued to provide future optionality, but is not needed for current growth plans
• Brownfield exploration at Palito and Coringa aims to double resources and support future production growth to 75-100k oz
• CEO is optimistic about Q3 news flow, including a new PEA for the Coringa trucking plan, the ore sorter arriving, and the crushing plant being commissioned by the end of September 2024

Serabi Gold CEO Mike Hodgson provided an insightful update on the company's plans and progress. The key takeaway is that Serabi is poised to nearly double gold production over the next 2-3 years in a capital-efficient manner by utilizing ore sorting to truck higher-grade feed from its Coringa project to its existing Palito processing plant. This plan, combined with promising brownfield exploration potential, positions Serabi Gold as an attractive growth story for investors.

Executing Low-Capex Growth Plan

Serabi's main priority is advancing the Coringa project as a source of high-grade ore to feed the underutilized Palito processing plant.

Hodgson explained, "With the road getting paved, the trucking cost came down. And we found this fantastic amenability of the Coringa ore body to ore sorting, so we went down a different route. We don't a plan to build a plant [at Coringa] now."

Instead, ore will be mined and crushed at Coringa, upgraded via ore sorting to improve the grade, and then trucked to the Palito plant as a pre-concentrate. This approach is far less capital-intensive than building a new plant. Hodgson noted, "It's extremely expensive, and we don't really need to do it with ore sorting and making a pre-concentrate now our plan."

Near-Term Catalysts and Production Growth

Several key developments are expected in the coming months. First, a new preliminary economic assessment (PEA) is underway for Coringa based on the ore sorting and trucking plan, which is expected in July or August. Hodgson is confident it will highlight the value of this approach: "We're doing a new PEA on that process flow sheet now. That will come out in July/August this year."

Additionally, the ore sorter is already in transit, the crushing plant for Coringa is being renovated, and civil works are underway. "The ore sorter will be switched on and operating at the end of September this year,"

Hodgson said. "So the world will change in September. The grade will go from 6 to 12 grams." This will enable a significant increase in gold production.

"We are going from 38,000 ounces to 60,000 ounces in the next 2.5 years," explained Hodgson. "We're funding all that growth out of cash flow. We're not looking for money. We can fund it ourselves - we're just better utilizing the Palito plant. That's the beauty of it - it's a really cheap, capital-light way of literally nearly doubling our production."

Interview with CEO Michael Hodgson

Exploration Provides Pathway to Further Growth

While focusing on executing the Coringa trucking plan, Serabi also sees substantial upside in exploration at Palito and Coringa. A $2 million brownfields exploration program, funded out of operating cash flow, aims to expand the resource base.

"Coringa is a completely undrilled deposit," Hodgson emphasized. "We've got half a million ounces there, which can be doubled. When you double that resource, you can increase the production rate even more."

Combined with targeted plant expansions, this could provide a pathway to further production growth. "We just take one of those ball mills that we had designed for Coringa, put it in at Palito, and bang - we can get to 70,000 ounces," said Hodgson. "It's first pass get to 60,000 ounces, second pass to 75,000 ounces, next pass through to 100,000 ounces - all organically."

Serabi Gold presents a compelling opportunity for investors seeking exposure to a growing gold producer. The company's focused plan to expand production by integrating its Coringa project with the Palito processing plant in a capital-efficient manner is well-conceived and already in motion. With a steady stream of news flow expected in the coming months, a strong balance sheet enabling fully-funded organic growth, and significant exploration upside, Serabi is well-positioned to re-rate as it delivers on its ambitious growth objectives.

The Investment Thesis for Serabi Gold

• Clear path to doubling production from 38k to 60k oz over 2-3 years via Coringa ore sorting/trucking plan
• Low capex, organic growth funded entirely from cash flow
• Multiple near-term catalysts, including Coringa PEA, ore sorter commissioning, and plant upgrades by the end of Q3
• Significant brownfields exploration potential to extend mine lives and support further production growth
• Proven management team executing on a focused strategy
• Attractive valuation with strong leverage to rising gold prices

Serabi Gold exemplifies several key themes that make it an attractive investment proposition in the current market environment.

First is the focus on capital discipline and organic growth. With many mining companies stretched after years of heavy investment, Serabi's ability to nearly double production without any significant capex stands out. Second is the emphasis on maximizing existing assets and infrastructure. By trucking high-grade feed from Coringa to utilize excess capacity at Palito, Serabi can realize a step-change in production and profitability without the permitting, construction and start-up risks of a new build. Finally, Serabi offers investors pure-play exposure to Brazil, a mining-friendly jurisdiction with geological potential that remains underexplored relative to other major gold-producing regions.

As gold prices continue to rise due to economic uncertainty, Serabi appears well-positioned to outperform by delivering low-cost growth with a relatively straightforward path to the upside for production and resources. For investors, Serabi offers a compelling mix of near-term catalysts, fully-funded organic growth, and significant exploration upside. With a market capitalization of just £55 million, the company's shares appear attractively valued relative to the growth potential. As the Coringa development plan advances and the company continues to derisk and expand its production profile, Serabi has the potential to re-rate significantly higher.