Serabi Gold Reports Strong Q3 Results, Positions for Continued Growth

• Gold production increased 5% to 25,262 ounces year-to-date
• Cash position improved to $15.4 million at quarter end
• All-in sustaining costs decreased 7% to $1,553 per ounce
• EBITDA increased 50% to $8.8 million year-to-date
• Net profit of $4.6 million compared to $0.9 million loss last year

About Serabi Gold

Serabi Gold plc is a Brazil-focused gold mining and development company. The company operates the Palito underground gold mine in the Tapajos region and is developing the nearby Coringa project. Serabi aims to increase annual production while keeping costs low through operational efficiencies.

Solid Operational Performance

Serabi delivered another strong quarter of consistent gold production from its Palito mining complex. Gold production for the third quarter increased 3% over the prior quarter to 8,738 ounces. This brings year-to-date production to 25,262 ounces, up 5% compared to the same period last year. The company remains on track to achieve its full-year production guidance of 33,500-35,000 ounces.

The increased production resulted in Serabi generating revenue of $47.9 million for the first nine months of 2023, up 8% year-over-year. The higher production and revenue demonstrate the company’s ability to deliver consistent operational performance.

Strengthened Financial Position

In addition to strong operations, Serabi significantly improved its balance sheet and financial performance during the quarter. The company grew its cash position to $15.4 million at September 30, 2023, more than double cash levels at the start of the year. This was fueled by operating cash flow of $13.3 million for the first nine months.

All-in sustaining costs for the first nine months decreased 7% year-over-year to $1,553 per gold ounce produced. This level is below annual guidance of $1,600-$1,675 per ounce, indicating management’s focus on optimizing costs. Lower costs combined with higher production and gold prices led EBITDA for the first nine months to reach $8.8 million, a 50% improvement over last year's level for the same period.

The company reported net income of $4.6 million or $0.06 per share for the first nine months compared to a $0.9 million loss last year. The improved financial performance leaves Serabi well positioned to fund continued development and exploration activities from operating cash flow going forward.

Advancing Coringa Development

Beyond the Palito mining complex, Serabi is developing its Coringa gold project located just 25 kilometers away. The company continues to conduct trial mining activities at Coringa and is using the cash flow to fund the project’s development. Permitting for full-scale construction is nearing completion following recent requests for additional project information by regulators. Management remains confident the final permits will be secured in due time.

Serabi views Coringa as the next phase of production growth for the company. The latest technical report outlines average annual gold production of approximately 38,000 ounces from underground mining operations over an initial eight-year mine life. At a low capital cost estimate of $25 million using existing infrastructure, Coringa offers robust project economics to supplement the Palito complex production.

Exploring Regional Potential

In addition to advancing Coringa, Serabi is also focused on the regional exploration potential of its land package located in the prospective Tapajos gold region. The recent exploration alliance agreement with Vale centered around Serabi’s Matilda prospect has expanded the company’s exploration reach in the region.

The initial $5 million exploration program funded by Vale will test Matilda and other regional targets for large-scale copper discoveries. While early stage, successful exploration results offer significant upside and diversification potential. This exploration news combined with the strong operating performance reported this quarter further increases the investment appeal of Serabi for new and existing shareholders.

Conclusion

Serabi Gold's third quarter results showcase a company firing on all cylinders. The operational improvements achieved over the past year have translated into stellar financial performance, debt reduction, and growth in the company’s cash position. As the Palito mining complex generates consistent production and free cash flow, Coringa construction funded internally moves closer to commercial production. Add in the blue-sky potential of regional exploration activities just getting started and it becomes clear why long-term investors have reason to be excited about Serabi's future prospects.