Serabi Gold Hits Record 9,489 Ounces in Q3 2024
Brazil-focused Serabi Gold (TSX: SBI) has announced its production results for the third quarter of 2024, with a production of 9,489 ounces of gold, the highest quarterly figure to date, continuing its trajectory of growth in both production capacity and operational efficiency.
The quarterly production outpaced the second quarter’s 9,003 ounces, bringing the year-to-date (YTD) total to 27,499 ounces. This represents a notable increase from Q3 2023 when the company produced 8,738 ounces, part of a total 33,153 ounces for the full year.
The consistent increase in output reflects the company’s improved operational performance, particularly at the Palito and Coringa orebodies, its two main assets in Brazil.
“The third quarter has been our best quarterly production year to date with close to 9,500 ounces generated,” CEO Mike Hodgson noted. He added that the company’s process plant, which milled approximately 55,000 tonnes of ore, had been functioning at exceptional levels, thanks to enhanced crushing capacity and preventative maintenance that reduced downtime.
In Q3 2024, the company mined 58,862 tonnes of ore with an average grade of 5.48 grams per tonne (g/t) of gold, slightly improving over Q2’s 59,564 tonnes at 5.06 g/t. However, this was still lower than the higher-grade ore mined in the same period last year, which saw grades of 6.64 g/t.
The decrease in grade is said to be partially attributed to operational challenges at the Palito mine, where bulk mining replaced more selective methods, leading to higher dilution of ore and subsequently lower grades.
At Coringa, one of Serabi’s most promising assets, mining progressed rapidly, with grades averaging 6.44 g/t for the quarter. “Coringa has 2½ fully developed levels ahead of stoping. The mine is being developed well ahead of production,” Hodgson explained.
Key to Serabi’s future production growth is the completion of the classification plant at Coringa, which is expected to be fully operational in Q4 2024. The plant is designed to pre-concentrate ore before it is trucked to the Palito processing plant, located 200 kilometers to the north. Commissioning trials of the crusher are already underway, and the ore sorter is expected to be operational before the end of the year.
As of September 30, 2024, Serabi held $20 million in cash, a significant increase from $11.6 million at the end of 2023. This improved liquidity is reflected in the company’s net cash balance of $14 million, compared to $5 million at the end of last year. The rise in cash flow was aided by inventory sales recognized in Q3, where 10,683 ounces were sold at an average price of $2,480 per ounce, generating approximately $3 million in additional revenue.
Serabi’s financial health has been bolstered by a $5 million loan secured from Itau Bank in Brazil in January 2024, with the proceeds used to maintain working capital. This loan, which carries an interest rate of 8.47%, is set to be repaid in early 2025.
For the full year 2024, Serabi continues to expect consolidated gold production to fall between 38,000 and 40,000 ounces, reaffirming its earlier guidance. This would represent a solid increase from the 33,153 ounces produced in 2023.
Serabi Gold last traded at $1.49 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
