Serabi Gold Posts Record Q3 Production & Coringa PEA Reveals More Promising Economics

• Serabi Gold achieved its highest quarterly gold production to date in Q3 2024, producing 9,489 ounces and maintaining strong operational momentum toward its 38,000-40,000 ounce annual guidance.
• The company's updated Pre-Economic Assessment (PEA) for the Coringa Gold operation reveals robust economics, with projected annual production of 36,000 ounces between 2026-2031 and an after-tax NPV of $145 million.
• Cash position strengthened significantly to $20.0 million as of September 2024, compared to $11.6 million at the end of 2023, with a healthy net cash balance of $14.0 million after loans and lease liabilities.
• Construction of the classification plant at Coringa remains on schedule and within budget, with crusher commissioning trials already underway and full ore sorter operations expected in Q4.
• The company successfully processed approximately 55,000 tonnes of ore per quarter (600 tonnes per day) for nine consecutive months, demonstrating consistent operational excellence.

Serabi Gold plc (LSE:SRB, TSX:SBI) is a Brazil-focused gold mining and development company that has consistently produced between 30,000 to 40,000 ounces of gold annually from its Palito Complex. The company is positioned for significant growth, with plans to double production through the development of its Coringa Gold project. Additionally, Serabi has made a promising copper-gold porphyry discovery within its extensive exploration license area. For investors considering Serabi Gold, the company presents an attractive opportunity in the junior gold mining sector, combining steady current production with substantial growth potential and a strengthening balance sheet.

Record-Breaking Q3 Production Performance

The third quarter of 2024 marked a significant milestone for Serabi Gold, with gold production reaching 9,489 ounces – the highest quarterly output year to date. This achievement was underpinned by consistently strong operational metrics:

• Total ore mined: 58,862 tonnes at 5.48 g/t gold
• Processed ore: 54,579 tonnes at 5.59 g/t gold
• Horizontal development: 3,146 meters completed

The company's process plant has demonstrated exceptional performance, maintaining a throughput of approximately 55,000 tonnes per quarter for nine consecutive months. This consistency has been achieved through improved crushing performance and enhanced preventative maintenance programs, which have significantly reduced mill downtime.

Coringa Project Economics Shine in Updated PEA

The recently released Pre-Economic Assessment (PEA) for the Coringa Gold operation unveils transformative potential for Serabi's production profile and financial outlook. The study outlines a phased production ramp-up, beginning with 28,000 ounces in 2025 before reaching a steady-state production of 36,000 ounces annually between 2026 and 2031. With an 11-year mine life extending to 2034, the project is expected to yield a substantial total of 363,108 ounces of gold, effectively doubling Serabi's current production capacity.

The economic fundamentals of the project appear robust, with the base case scenario using a conservative gold price of $2,100 per ounce. At this price point, the project boasts an after-tax Net Present Value (NPV) of $145 million at a 10% discount rate, highlighting significant value creation potential for shareholders. The operation is projected to generate an impressive average annual free cash flow of $19 million, with All-In Sustaining Costs (AISC) averaging $1,241 per ounce – a competitive figure in today's market that suggests healthy operating margins. The required sustaining capital expenditure of $87 million over the life of mine appears manageable and is expected to be funded through operational cash flow.

The economic assessment demonstrates considerable flexibility and upside potential across various gold price scenarios, particularly at current spot prices which remain well above the base case assumption. These projections are underpinned by a substantial resource base, with Measured & Indicated resources totaling 795,000 tonnes at an impressive grade of 7.03 g/t gold, complemented by Inferred resources of 1.45 million tonnes at 5.81 g/t gold.

The high-grade nature of these resources provides confidence in the project's economic viability and suggests potential for further upside through exploration and resource conversion. The robust grade profile, combined with the project's favorable economics and manageable capital requirements, positions Coringa as a potentially transformative asset in Serabi's portfolio.

Operational Progress at Coringa

The Coringa operation continues to perform excellently, with mined grades averaging 6.44 g/t for the quarter. Current production is focused on the uppermost levels (320m, 290m, and 260m), while development work progresses well on lower levels:

• Development complete or near completion on levels 225m and 195m
• New development underway on level 165m
• Main ramp advancing toward level 130m
• 2½ fully developed levels ahead of stoping

The classification plant construction is progressing according to plan, with crusher commissioning trials already underway. The ore sorter remains on track for full operational status in Q4, which will enable pre-concentration of mined ore before transportation to the Palito plant.

Financial Position & Working Capital

On the regulatory and licensing front, Serabi continues to methodically advance its key projects. A significant milestone was achieved in January 2024 with the three-year renewal of the GUIA trial mining license, providing operational stability and continuity. The company has taken proactive steps to enhance its operational capabilities by applying for increased ore transportation volume allowance from Coringa to Palito. Environmental compliance remains a top priority, with the completion of comprehensive environmental studies (PBA) that have been incorporated into the Indigenous Impact Report. The submission of the Environmental Control Institute (ECI) to FUNAI in May 2024 represents another crucial step in the regulatory process, demonstrating the company's commitment to responsible development and stakeholder engagement.

Serabi's financial position has strengthened considerably:

• Cash balance: $20.0 million (September 2024) vs. $11.6 million (December 2023)
• Net cash position: $14.0 million after interest-bearing loans and lease liabilities
• Q3 sales: 10,683 ounces at average price of $2,480/oz

The company's financial flexibility was further enhanced in January 2024 through a strategic $5.0 million unsecured loan arrangement with Itau Bank. Third-quarter performance was particularly strong, with sales of 10,683 ounces at an impressive average price of $2,480 per ounce, contributing significantly to cash generation. The successful realization of inventory during Q3 added approximately $3.0 million to the company's cash reserves, demonstrating effective working capital management and strong operational execution.

Conclusion

Serabi Gold presents a compelling investment case for investors seeking exposure to the gold mining sector. The company combines several attractive elements:

• Consistent operational performance with record-breaking production
• Strong growth potential through the Coringa project
• Robust financial position with increasing cash reserves
• Clear path to doubled production capacity
• Attractive project economics with significant upside at current gold prices

While investors should consider the usual risks associated with junior mining companies and operations in Brazil, Serabi's track record of consistent production, strong project economics, and solid financial position suggest a well-positioned company on the cusp of significant growth. The successful execution of the Coringa project could create substantial shareholder value, making Serabi Gold an attractive option for investors seeking exposure to growth-oriented gold producers.

Looking ahead, Serabi has outlined a clear and ambitious growth trajectory while maintaining realistic near-term expectations. The company's confidence in its operational capabilities is reflected in its maintained FY2024 consolidated gold production guidance of 38,000-40,000 ounces, supported by strong year-to-date performance. The growth strategy encompasses multiple facets of the business, with a primary focus on maintaining the consistent production levels that have been achieved at the Palito Complex. This foundation of stable production provides the platform for advancing the Coringa project toward full production, a key driver of future growth.

Operational optimization efforts continue through the implementation of the new classification plant, which is expected to enhance processing efficiency and recovery rates. Additionally, the company maintains an active exploration program across its extensive license area, seeking to identify and develop new opportunities for resource expansion and production growth. This multi-pronged approach to growth, combined with strengthening financial resources and regulatory progress, positions Serabi well for sustainable long-term expansion.