Serabi Gold - Positioned for Growth with Brazilian Gold Assets

• Serabi Gold had a successful Q1 2024, with production on track to meet 38,000 oz guidance for the year. Gold prices in Brazilian Reais are at record highs, benefiting margins.
• The Coringa mine is ramping up with installation of a crushing plant and ore sorter by end of Q3, which should lead to a strong Q4. The plan is to reach 60,000 oz/year production within 2-3 years.
• An updated resource, reserve and PEA is planned for later this year to support the production growth plans. The final permit for Coringa is also expected soon which will fully de-risk the project.
• Vale's decision not to continue their 12-month copper exploration alliance is not seen as a major setback. The $2.5M provided by Vale allowed Serabi to advance promising gold targets near the Palito plant.
• Higher gold prices and margins are allowing Serabi to self-fund Coringa development and exploration from cash flow, a major improvement from the financial constraints of recent years. Q3 2024 is shaping up to be a pivotal quarter for the company.

About Serabi Gold

Serabi Gold is a Brazil-focused gold mining and exploration company with two producing assets, the Palito Mining Complex and the Coringa Gold Project, both located in the prolific Tapajos gold province of northern Brazil. Led by CEO Mike Hodgson, Serabi has steadily advanced its projects despite facing permitting delays and financial constraints in recent years. With a strengthening gold price and key milestones on the horizon, the company is now well-positioned to deliver significant production growth and value for shareholders.

Interview with Chief Executive Officer, Mike Hodgson

Record Gold Prices Drive Margin Expansion

One of the key tailwinds for Serabi currently is the surging gold price, not just in US dollars but also in Brazilian Reais. At over 12,000 Reais per ounce, gold is trading at all-time highs in local currency terms. As Mike Hodgson explains, "This time last year it was 5,000. Normally there's been a natural hedge between the Real, the dollar and the gold price...This time, last year the Real was about 5.15, it's still above 5, and we've got this gold price in dollars and Reais, which is great."

With the majority of Serabi's costs denominated in Reais, this gold price strength flows directly to the company's bottom line. "We've got two mines, with a big fixed cost in labor and power," notes Hodgson.

"If gold price goes up in [Brazilian] Reais, it goes to the bottom line."

This margin expansion is timely for Serabi as it ramps up production and development activities at its core assets.

Coringa Ramp-Up Accelerating

After starting small-scale mining under a trial license in 2022, the pace of development at Coringa is now accelerating. Key milestones are the installation of a crushing plant in early Q3 and the addition of an ore sorter by the end of Q3. As Hodgson explains, "The ore sorter will be dovetailed in, joined up, and by the end of Q3 we'll have it up and running. That'll be tremendous."

The ore sorter in particular is an important piece of the puzzle, allowing Serabi to process accumulated stockpiles and produce a high-grade ore feed for its plant at Palito.

"In Q4 we're going to have a bit of a bumper quarter because we're going to have a lot of stockpile ready to put through that ore sorter."

Alongside ongoing mine development at Coringa, this should allow a significant step-up in production as the year progresses.

Pathway to 60,000 Ounces

Looking beyond 2024, Serabi has a clear pathway to grow production to 60,000 ounces per year and potentially beyond.

"The plan is, this year, 38,000 ounces, then ramping up and getting to 60,000 over the next two years. So probably next year, mid to high 40,000's, the year after, a big haul in 60,000."

The keys to achieving this growth are the continued ramp-up of Coringa, de-bottlenecking and expansion of ore throughput at Palito, and a modest amount of incremental capital expenditure.

"We don't need to do a thing in our process plant at Palito," explains Hodgson. "All we need to do is ramp up Coringa. If we can feed the plant quality high-grade ore, we can squeeze more ounces through that plant and get it up to 60,000 ounces."

To support this plan and lay out the long-term vision, Serabi is working on an updated resource, reserve, and preliminary economic assessment (PEA) for the combined Palito and Coringa operation, due in the third quarter. "The whole idea is to have a PEA which demonstrates the 60,000 ounce production level, so people can actually see it's not just talk," comments Hodgson.

Exploration Upside

While the near-term focus is squarely on production growth from Palito and Coringa, Serabi also sees excellent potential for new discoveries in its surrounding land package. The company recently concluded a 12-month exploration alliance with Brazilian major Vale, focused on the Matilda copper prospect. While Vale elected not to continue the alliance beyond the initial 12 months to focus on other opportunities, the $2.5 million spent by Vale allowed Serabi to advance several promising gold prospects in parallel.

"It served its purpose," notes Hodgson. "Vale had absolutely no interest in gold, small high-grade deposits. The gold exploration funded by Vale in and around Palito was about trying to begin the path to realizing the potential here." Two prospects that will see further work are Sao Domingos and Calico. "Calico in particular has all the hallmarks of being another Palito," explains Hodgson. "We need to know if we're going to find more ounces near Palito because we need to decide if we're going to grow Coringa or make the Palito plant even bigger."

The Investment Thesis for Serabi Gold

For investors, the Serabi Gold story is compelling for several reasons:

• Proven management team with deep experience operating in Brazil and a track record of persevering through challenges to deliver on their vision
• Expanding production profile anchored by two mines with 60,000 ounce per year potential and visibility to long-term growth
• Exposure to record high gold prices in Brazilian Reais, translating directly to margin expansion and cash flow generation
• Pending permit and PEA milestones in Q3 that will further de-risk the assets and provide a clear roadmap for growth
• Strategic land position in a prolific gold belt with multiple avenues to make new discoveries and add high-grade ounces

While Serabi faced headwinds with permitting and financing in recent years, it has continued to advance its projects and is now in a strong position to realize their potential. With higher gold prices and production ramping up, the company is increasingly able to self-fund its growth from cash flow.

As CEO Mike Hodgson sums up, "In the past, it was always - do we drill those five holes or do those 50 meters of development at Coringa? At least now we can do modest brownfield exploration and continue development. All being well, we'll have a pivotal Q3 where the PEA will be done, the full license will arrive to de-risk the company, and we'll be switching on the ore sorter. I'll be looking forward to that day, it'll be a real milestone for us."

For investors looking for a growing gold producer with a proven operating team, clear path to production growth, and exposure to record high margins, Serabi Gold presents a compelling opportunity.