Serabi Gold plc (AIM: SRB) (TSX: SBI) (TSX: SBI.WT), the Brazilian
focused gold exploration and development company, advises that it
has today published its unaudited financial results for the 3 month
and 6 month periods ending 30 June 2012 and at the same time has
also published its Management Discussion and Analysis for the same
periods. Both documents, together with this announcement, have been
posted on the Company's website at www.serabigold.com and are also
available on SEDAR at www.sedar.com.
Corporate and Operational Highlights
- The Company completed a placing of 27,300,000 units on January
24, 2012 raising gross proceeds of UK£ 2.73 million
- Each of the 27,300,000 units were comprised of one ordinary
share and one-sixth of one ordinary share purchase warrant of the
Company, with each whole warrant being exercisable to acquire one
Ordinary Share at an exercise price of UK£ 0.15 until January 23,
2014.
- Assay results from ALS Minerals confirmed preliminary results
issued in December 2011 for drilling undertaken on the Palito South
extension and the Piaui prospect. Independent results reported an
average upgrade for gold assays of 8% and 14.9% respectively,
compared with the preliminary reported results.
- Personnel from NCL Ingenieria y Construccion SA ("NCL") visited
Palito during March 2012 to undertake their field evaluation and
gather the required data for an independent Preliminary Economic
Assessment (the "PEA") into the viability of re-establishing mining
operations at the Palito mine.
- The Operational Environmental Licence for the Palito Mine was
renewed by Secretaria de Estado de Meio Ambiente ("SEMA"), the
state Environmental Agency for the State of Para on 27 April
2012.
- NCL completed the PEA in June 2012. The results were reported
on 13 June 2012 and the completed NI 43-101 compliant Technical
Report was filed on 29 June 2012.
- Highlights of the PEA are
- After-tax Internal Rate of Return ("IRR") of 68% at a realised
gold price of US$1,400 per ounce;
- Project payback within two years of first gold production;
- Net after-tax cash flow generated over project life of US$72.2
million at a realized gold price of US$1,400 per ounce;
- After-tax Net Present Value ("NPV") of US$38.2 million; based
on a 10% discount rate and a realised gold price of US$1,400 per
ounce;
- Average Life of Mine ("LOM") cash operating costs of US$739 per
ounce (gold equivalent) including royalties and refining
costs;
- Average annual free cash flow (after tax and sustaining capital
expenditure) of US$11.0 million;
- Average gold grade of 8.98 g/t gold producing a total gold
equivalent production of 201,300 ounces;
- Average annual production of 24,400 gold equivalent ounces over
the initial 8 year period with ranges between 19,000 to 30,000
ounces gold equivalent per annum;
- Initial capital expenditures of US$17.8 million prior to
production start-up;
Financial Highlights
3 months ended 3 months ended 6 months ended 6 months ended
30 June 2012 30 June 2011 30 June 2012 30 June 2011
(unaudited) (unaudited) (unaudited) (unaudited)
US$ US$ US$ US$
--------------- --------------- --------------- ---------------
Operating
Loss for
period 854,100 1,562,635 2,169,226 2,305,277
Loss per
ordinary
share (basic
and diluted) (0.94) cents (2.44) cents (2.47) cents (4.22) cents
6 months ended 12 months ended
30 June 2012 31 December
(unaudited) 2011 (audited)
US$ US$
--------------- ---------------
Exploration
and
development
expenditures
during the
period 1,948,956 8,663,471
Cash at end
of period 1,697,434 1,406,458
Equity
Shareholders
funds at end
of period 42,336,841 43,284,480
For the three month period ended 30 June 2012 the Company
recorded a net loss of US$854,100 (0.94 US cents per share)
compared to a net loss of US$1,562,635 (2.44 US cents per share)
for the comparative period last year. The decrease in the loss for
the period reflects lower depreciation charges of US$158,204 for
the quarter compared with US$593,796 for the quarter ended 30 June
2011. This lower level of depreciation arises as assets,
particularly those in Brazil, have been subject to depreciation on
a straight line basis, and whilst not necessarily in use recently
and whilst still being available for use, are reaching the point
where the original purchase price of these items has now been fully
depreciated.
Operating expenses of US$64,250 (three months to 30 June 2011:
US$132,260) reflect charges relating to the process plant at the
Palito Mine. During the second quarter of 2011 the Company was
crushing waste rock for use in road construction, an activity which
ceased in the latter part of 2011. Costs for 2011 therefore include
consumable items related to this activity. The costs for 2012
primarily reflect the staffing costs of personnel involved in the
on-going maintenance and remedial works around the crushing and
process plant.
Administration costs as reported have reduced by some US$129,000
from US$701,818 for the three months ended 30 June 2011 to
US$573,167 for the same three month period in 2012. There have been
two significant variances contributing to this reduction. As noted
previously, during the 3 month period ended 30 June 2011 the
Company was providing waste rock for road construction. The sales
of this material, not being sales of metals, did not fall within
the revenue definition adopted by the Company and were treated as
other income and classified as part of administrative expenses. For
the 3 months to June 2011 this amounted to BrR$274,150
(US$165,000). Also in the 3 months ended 31 March 2011, the Company
made a provision of BrR$486,494 (US$293,000) in respect of
settlement of employment claims made by former employees in Brazil.
The charge recorded in the 3 months ended 30 June 2012 was
approximately US$26,000. The net effect of these items accounts for
US$102,000.
Excluding the above items administration costs incurred in
Brazil were US$175,000 for the three months ended 30 June 2012
compared with US$177,500 for the 3 months ended 30 June 2011.
Administration cost incurred outside of Brazil were US$371,289
for the 3 months ended 30 June 2012 a reduction of US$25,000
compared with the 3 month period ended 30 June 2011.
The Company reported an exchange loss of US$19,103 for the 3
months ended 30 June 2012 (3 months to 30 June 2011; exchange loss
of US$44,988). This included an exchange loss in respect of cash
holdings of US$27,449, which has been offset by exchange gains
realised in the period of US$8,346.
Investment income has reduced from US$21,374 to US$3,685
reflecting the reduced levels of cash held by the Company during
the quarter ended 30 June 2012 compared with the corresponding
quarter of 2011.
For the six month period ended 30 June 2012 the Company recorded
a net loss of US$2,169,226 (2.47 US cents per share) compared to a
net loss of US$2,305,277 (4.22 US cents per share) for the
comparative period last year.
The reduction in the loss of approximately US$136,000 is in part
explained by variations which have also influenced the results for
the 3 months to 30 June 2012 namely the reductions in depreciation
charges, the reduction in provisions for employment claims and the
effect of sales of waste rock. In addition the costs of maintenance
charges relating to the Palito plant and equipment have reduced by
US$134,000 from US$316,000 to US$182,000.
Administration costs have increased slightly from US$1,367,205
for the 6 months to 30 June 2011 to US$1,383,953, but this has been
affected by the lack of waste rock sales in the 6 month period of
the current year offset by the reduction in labour claim charges.
For the six months to 30 June 2011 the charges established for
employment claims brought in Brazil totalled BrR$700,201
(US$430,000) compared with BrR$375,403 (US$202,000) for the same 6
month period in 2012 creating a saving of US$228,000. Waste rock
sales for the 6 months to 30 June 2011 amounted to BrR$578,124
(US$355,000) whilst there has been no similar sales income in 2012.
The net effect of these items is US$127,000 and thus excluding
these effects administration costs have reduced by US$111,000 for
the period ended 30 June 2012 compared with the period ended 30
June 2011. Of this, US$100,000 is attributable to costs incurred in
Brazil and reflects the reduced headcount and lower levels of
activity during the 6 months ended 30 June 2012 compared with the
corresponding period in 2011 with the balance being reductions in
administration cost incurred outside of Brazil.
During the 6 month period ended 30 June 2011 the company
benefitted from a one-off income arising from the settlement of a
claim with a supplier which contributed a book income derived from
the release of a liability that had been established in respect of
the claim of U$540,441.
Depreciation charges for plant and equipment which have reduced
by US$576,000 from US$1,161,132 for the 6 month period ended 30
June 2011 to US$584,841 for the 6 month period to 30 June 2012.
The charges made in respect of the amortisation of share option
awards has reduced by approximately US$32,000 from US$94,311 in the
6 month period ended 30 June 2011 to US$62,394 in the corresponding
period in 2012. This reflects the full amortisation of certain
options during 2011 and the lower level of awards made during the 6
month period to 30 June 2011 compared with the same 6 month period
in 2011.
Foreign exchange gains which have been derived primarily from
cash holdings and favourable settlement of foreign currency
transactions have reduced during the 6 months to 30 June 2012,
reflecting in part, lower levels of currency volatility during the
current year but also the reduced level of cash holdings of the
company which limits the levels of gains or losses that can be
achieved.
The reduced levels of cash holdings also explain the reduced
level of interest income derived in the 6 months ended 30 June 2012
compared with the corresponding period of 2011.
Exchange differences on the currency translation of foreign
operations reflect the revaluation of the assets and liabilities of
those foreign operations. The Brazilian Real has fallen in value
relative to the United States Dollar over the 6 month period ended
30 June 2012. The rate as at 30 June 2012 was 2.0213 Brazilian Real
to one United States Dollar compared with a rate as at 31 December
2011 of 1.8758. This decline has resulted in a reduction in US
Dollar terms of the book value of the assets of the Company's
Brazilian subsidiary in particular the values attributable to the
Palito Mine and the deferred exploration interests. Any
appreciation in the Brazilian Real will result in a reversal of
this exchange loss.
Outlook
Exploration and development activities will continue to be
limited. Future activity will be subject to the levels of funding
available to the Company. With a positive PEA the Company's
objective is to secure the required finance in order to follow the
development plan outlined in the PEA. It could be anticipated that
following securing of the required funds:
- Work would be undertaken to commence the de-watering of the
mine;
- A mining contractor would be appointed;
- The company would seek to secure appointments of key
personnel;
- Mining equipment and mobile mining fleet orders would be
placed;
- Orders would be placed for any items required for the crushing
and processing plant; and
- Exploration activity at Piaui, Palito South and Currutela would
be restarted with a view to implementing drill programmes to
establish Canadian National Instrument 43-101 compliant mineral
resource estimates on one or more of these prospects.
SERABI GOLD PLC
Condensed Consolidated Statements of Comprehensive Income
----------- ----------- ----------- -----------
For the three months
ended For the six months ended
30 June 30 June
2012 2011 2012 2011
(expressed in US$) Notes (unaudited) (unaudited) (unaudited) (audited)
----- ----------- ----------- ----------- -----------
CONTINUING
OPERATIONS
Revenue -- 1,063 -- 1,063
Operating expenses (64,250) (132,260) (181,944) (316,082)
----------- ----------- ----------- -----------
Gross
(loss)/profit (64,250) (131,197) (181,944) (315,019)
Administration
expenses (573,167) (701,818) (1,383,953) (1,367,205)
Settlement of
supplier claim -- -- -- 540,441
Option costs (33,244) (63,740) (62,394) (94,311)
Gain/(loss) on
asset disposals 8,599 11,178 8,599 (2,337)
Depreciation of
plant and
equipment (158,204) (593,796) (584,841) (1,161,132)
----------- ----------- ----------- -----------
Operating loss (820,266) (1,479,373) (2,204,533) (2,399,563)
Foreign exchange
(loss)/gain (19,103) (44,988) 68,087 142,309
Finance costs (18,416) (59,648) (37,644) (81,800)
Investment income 3,685 21,374 4,864 33,777
----------- ----------- ----------- -----------
Loss before
taxation (854,100) (1,562,635) (2,169,226) (2,305,277)
Income tax expense -- -- -- --
----------- ----------- ----------- -----------
Loss for the
period from
continuing
operations (1)
(2) (854,100) (1,562,635) (2,169,226) (2,305,277)
----------- ----------- ----------- -----------
Other
comprehensive
income (net of
tax)
Exchange
differences on
translating
foreign
operations (4,235,830) 1,846,896 (3,068,978) 2,790,106
----------- ----------- ----------- -----------
Total
comprehensive
(loss)/income for
the period (2) (5,089,930) 284,261 (5,238,204) 484,829
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Loss per ordinary
share (basic and
diluted) (1) 3 (0.94c) (2.44c) (2.47c) (4.22c)
----------- ----------- ----------- -----------
(1) All revenue and expenses arise from continuing operations.
(2) The Group has no non-controlling interests and all income / (losses)
are attributable to the equity holders of the Parent Company.
SERABI GOLD PLC
Condensed Consolidated Balance Sheets
As at As at As at
30 June 30 June 31 December
2012 2011 2011
(expressed in US$) Notes (unaudited) (unaudited) (audited)
----- ----------- ----------- -----------
Non-current assets
Development and deferred
exploration costs 5 17,405,081 14,785,541 16,648,884
Property, plant and equipment 6 25,845,466 34,843,749 28,266,092
----------- ----------- -----------
Total non-current assets 43,250,547 49,629,290 44,914,976
----------- ----------- -----------
Current assets
Inventories 985,865 1,580,484 1,114,255
Trade and other receivables 77,132 131,973 87,440
Prepayments and accrued income 545,441 1,325,456 701,669
Cash at bank and cash
equivalents 1,697,434 7,859,831 1,406,458
----------- ----------- -----------
Total current assets 3,305,872 10,897,744 3,309,822
----------- ----------- -----------
Current liabilities
Trade and other payables 1,990,299 3,689,787 2,538,055
Accruals 113,191 294,563 146,165
----------- ----------- -----------
Total current liabilities 2,103,490 3,984,350 2,684,220
----------- ----------- -----------
Net current assets 1,202,382 6,913,394 625,602
----------- ----------- -----------
Total assets less current
liabilities 44,452,929 56,542,684 45,540,578
----------- ----------- -----------
Non-current liabilities
Trade and other payables 241,548 298,521 508,680
Provisions 1,547,976 1,511,026 1,451,296
Interest bearing liabilities 326,564 282,260 296,122
----------- ----------- -----------
Total non-current liabilities 2,116,088 2,091,807 2,256,098
----------- ----------- -----------
Net assets 42,336,841 54,450,877 43,284,480
----------- ----------- -----------
Equity
Share capital 8 31,416,993 29,291,551 29,291,551
Share premium 50,306,920 48,278,626 48,292,057
Option reserve 2,028,676 1,758,190 1,956,349
Other reserves 780,028 702,095 702,095
Translation reserve (4,144,145) 6,672,274 (1,075,167)
Accumulated loss (38,051,631) (32,251,859) (35,882,405)
----------- ----------- -----------
Equity shareholders' funds 42,336,841 54,450,877 43,284,480
----------- ----------- -----------
The interim financial information has not been audited and does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. Whilst the financial information included in
this announcement has been compiled in accordance with
International Financial Reporting Standards ("IFRS") this
announcement itself does not contain sufficient financial
information to comply with IFRS. The Group statutory accounts for
the year ended 31 December 2011 prepared under IFRS as adopted in
the EU and with IFRS and their interpretations adopted by the
International Accounting Standards Board have been filed with the
Registrar of Companies following their adoption by shareholders at
the last Annual General Meeting. The auditor's report on these
accounts was unqualified but did contain an emphasis of matter with
respect to the Company and the Group regarding going concern and
the future availability of project finance. The auditor's report
did not contain a statement under Section 498 (2) or 498 (3) of the
Companies Act 2006.
SERABI GOLD PLC
Condensed Consolidated Statements of Changes in Shareholders'
Equity
----------------------------------------------------------------
(expressed in
US$) Share Share Share option
(unaudited) capital premium reserve
-------------- -------------- --------------
Equity
shareholders'
funds at 31
December 2010 27,752,834 40,754,032 1,648,484
-------------- -------------- --------------
Foreign currency
adjustments -- -- --
Loss for the
period -- -- --
-------------- -------------- --------------
Total
comprehensive
income for the
period -- -- --
Issue of new
ordinary shares
for cash 731,412 4,229,767 --
Issue of new
ordinary shares
on exercise of
special warrants 807,305 4,004,807 --
Costs associated
with issue of
new ordinary
shares for cash -- (709,980) --
Share option
expense -- -- 109,706
-------------- -------------- --------------
Equity
shareholders'
funds at 30 June
2011 29,291,551 48,278,626 1,758,190
-------------- -------------- --------------
Foreign currency
adjustments -- -- --
Loss for the
period -- -- --
-------------- -------------- --------------
Total
comprehensive
income for the
period -- -- --
Costs associated
with issue of
new ordinary
shares for cash -- 13,431 --
Share option
expense -- -- 198,159
-------------- -------------- --------------
Equity
shareholders'
funds at 31
December 2011 29,291,551 48,292,057 1,956,349
-------------- -------------- --------------
Foreign currency
adjustments -- -- --
Loss for the
period -- -- --
-------------- -------------- --------------
Total
comprehensive
income for the
period -- -- --
Issue of new
ordinary shares
for cash 2,125,442 2,047,508 --
Costs associated
with issue of
new ordinary
shares for cash -- (32,645) --
Share option
expense -- -- 72,327
-------------- -------------- --------------
Equity
shareholders'
funds at 30 June
2012 31,416,993 50,306,920 2,028,676
-------------- -------------- --------------
---------------------------------------------------------------------------
(expressed in
US$) Other Translation Accumulated
(unaudited) reserves reserve loss Total equity
------------- ------------- ------------- --------------
Equity
shareholders'
funds at 31
December 2010 260,882 3,882,168 (29,946,582) 44,351,818
------------- ------------- ------------- --------------
Foreign currency
adjustments -- 2,790,106 -- 2,790,106
Loss for the
period -- -- (2,305,277) (2,305,277)
------------- ------------- ------------- --------------
Total
comprehensive
income for the
period -- 2,790,106 (2,305,277) 484,829
Issue of new
ordinary shares
for cash 208,229 -- -- 5,169,408
Issue of new
ordinary shares
on exercise of
special warrants 232,984 -- -- 5,045,096
Costs associated
with issue of
new ordinary
shares for cash -- -- -- (709,980)
Share option
expense -- -- -- 109,706
------------- ------------- ------------- --------------
Equity
shareholders'
funds at 30 June
2011 702,095 6,672,274 (32,251,859) 54,450,877
------------- ------------- ------------- --------------
Foreign currency
adjustments -- (7,747,441) -- (7,747,441)
Loss for the
period -- -- (3,630,546) (3,630,546)
------------- ------------- ------------- --------------
Total
comprehensive
income for the
period -- (7,747,441) (3,630,546) (11,377,987)
Costs associated
with issue of
new ordinary
shares for cash -- -- -- 13,431
Share option
expense -- -- -- 198,159
------------- ------------- ------------- --------------
Equity
shareholders'
funds at 31
December 2011 702,095 (1,075,167) (35,882,405) 43,284,480
------------- ------------- ------------- --------------
Foreign currency
adjustments -- (3,068,978) -- (3,068,978)
Loss for the
period -- -- (2,169,226) (2,169,226)
------------- ------------- ------------- --------------
Total
comprehensive
income for the
period -- (3,068,978) (2,169,226) (5,238,204)
Issue of new
ordinary shares
for cash 77,933 -- -- 4,250,883
Costs associated
with issue of
new ordinary
shares for cash -- -- -- (32,645)
Share option
expense -- -- -- 72,327
------------- ------------- ------------- --------------
Equity
shareholders'
funds at 30 June
2012 780,028 (4,144,145) (38,051,631) 42,336,841
------------- ------------- ------------- --------------
SERABI GOLD PLC
Condensed Consolidated Cash Flow Statements
------------------------ ------------------------
For the three months For the six months
ended ended
30 June 30 June
2012 2011 2012 2011
(expressed in US$) (unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Operating activities
Operating loss (820,266) (1,479,373) (2,204,533) (2,399,563)
Depreciation - plant,
equipment and mining
properties 158,204 593,796 584,841 1,161,132
Impairment charges -- -- -- --
(Loss)/gain on asset
disposals (8,599) (11,178) (8,599) 2,337
Option costs 33,244 63,740 62,394 94,311
Interest paid (5,022) (18,360) (10,323) (28,686)
Foreign exchange loss (145,975) (89,968) (90.359) (138,898)
Changes in working
capital
Decrease / (increase)
in inventories 45,941 (26,972) 52,320 (64,453)
Decrease / (increase)
/ in receivables,
prepayments and
accrued income 86,214 (61,778) 128,422 (220,134)
Increase/(decrease) in
payables, accruals
and provisions 21,857 283,921 (458,461) 272,172
-- ----------- ----------- ----------- -----------
Net cash flow from
operations (634,402) (746,172) (1,944,298) (1,321,782)
----------- ----------- ----------- -----------
Investing activities
Proceeds from sale of
fixed assets 9,928 74,509 9,928 115,151
Purchase of property,
plant and equipment (42) (18,253) (51,952) (45,636)
Exploration and
development expenditure (1,017,349) (2,574,755) (1,948,956) (4,214,022)
Interest received 3,685 21,374 4,864 33,777
----------- ----------- ----------- -----------
Net cash outflow on
investing activities (1,003,778) (2,497,125) (1,986,116) (4,110,730)
----------- ----------- ----------- -----------
Financing activities
Issue of ordinary share
capital -- -- 4,250,883 4,961,180
Issue of warrants -- -- -- 208,229
Capital element of
finance lease payments -- -- -- --
Payment of share issue
costs -- (3,416) (32,645) (709,980)
Payment of special
warrant issue costs -- -- -- (14,900)
----------- ----------- ----------- -----------
Net cash (outflow)/
inflow from financing
activities -- (3,416) 4,218,238 4,444,529
----------- ----------- ----------- -----------
Net (decrease)/ increase
in cash and cash
equivalents (1,638,180) (3,246,713) 287,824 (987,983)
Cash and cash
equivalents at
beginning of period 3,382,198 11,100,828 1,406,458 8,598,754
Exchange difference on
cash (46,584) 5,716 3,152 249,060
----------- ----------- ----------- -----------
Cash and cash
equivalents at end of
period 1,697,434 7,859,831 1,697,434 7,859,831
----------- ----------- ----------- -----------
1. Basis of preparation These interim
accounts are for the three and six month periods ended 30 June
2012. Comparative information has been provided for the unaudited
three and six month periods ended 30 June 2011 and, where
applicable, the audited twelve month period from 1 January 2011 to
31 December 2011.
The accounts for the periods have been prepared in accordance
with International Accounting Standard 34 "Interim Financial
Reporting" and the accounting policies are consistent with those of
the annual financial statements for the year ended 31 December 2011
and those envisaged for the financial statements for the year
ending 31 December 2012. The Group has not adopted any standards or
interpretation in advance of the required implementation dates. It
is not anticipated that the adoption in the future of the new or
revised standards or interpretations that have been issued by the
International Accounting Standards Board will have a material
impact on the Group's earnings or shareholders' funds.
(i) Going concern and availability of project
finance In common with many companies in the exploration and
development stages, the Group raises its finance for exploration
and development programmes in discrete tranches. The Group has
completed, during the first half of 2012, the preparation of a
Preliminary Economic Assessment ("PEA") into the viability of
re-commencing mining operations at the Palito Mine. The results of
the PEA were announced on 13 June 2012 and indicated a project
after tax internal rate of return of 68% based on employing a
selective underground mining operation and exploiting only the
previously declared mineral resource estimates. The directors
believe that the PEA results support a small scale, high grade
operation using selective mining techniques and the Board intends,
subject to financing, to undertake the necessary mine development
and remedial works as soon as possible with the intention of the
first gold being produced in the third quarter of 2013. Management
is currently active in raising further finance from investors in
order to provide sufficient funds to recommence mining operations
and provide sufficient working capital for the Group's
operations.
Subject to raising this finance the Directors consider that the
Group will thereafter have sufficient funds to finance the Group
and its commitments for the foreseeable future. The Directors have
therefore concluded that it is appropriate to prepare the financial
statements on a going concern basis.
Whilst the Directors are confident that they are taking all the
necessary steps to ensure that the funding will be available, there
can be no certainty that this will be the case. Were future funding
not to become available in an appropriate timescale, the Directors
would need to consider alternative strategies and an impairment
review would be required in respect of the carrying value of the
assets relating to the Palito Mine and other deferred exploration
costs. These conditions indicate the existence of a material
uncertainty which may cast significant doubt over the Group's
ability to continue as a going concern. No adjustments to asset
carrying values that may be necessary should the Group be
unsuccessful in raising the required finance have been recognised
in the financial statements.
(ii) Impairment The Directors have
undertaken a review of the carrying value of the mining and
exploration assets of the Group, and considered the implications of
the operational difficulties experienced and the current
operational status of Palito. Following this review they have
assessed the value of the existing assets on the basis of value in
use involving a future recommencement of underground mining
operations which is dependent on the ability of the Group to raise
future finance and to operate the mine in line with the mine plan
that forms the basis of the value in use calculation. The carrying
values of assets have not been adjusted to reflect a failure to
raise sufficient funds, not achieving the projected levels of
operation or that, if a sale transaction were undertaken, the
proceeds may not realise the value as stated in the accounts.
(iii) Inventories Inventories - are valued
at the lower of cost and net realisable value.
(iv) Property, plant and equipment
Property, plant and equipment are depreciated over their useful
lives.
(v) Mining property The Group commenced
commercial production at the Palito mine effective 1 October 2006.
Prior to this date all revenues and operating costs were
capitalised as part of the development costs of the mine. Effective
from 1 October 2006 the accumulated development costs of the mine
were re-classified as Mining Property costs and such cost will be
amortised over the anticipated life of the mine on a unit of
production basis. As the underground mine is currently on care and
maintenance and there is no depletion of the reserves and resources
attributable to the mine, no amortisation charge has been recorded
in the period.
(vi) Revenue Revenue represents amounts
receivable in respect of sales of gold and by-products. Revenue
represents only sales for which contracts have been agreed and for
which the product has been delivered to the purchaser in the manner
set out in the contract. Revenue is stated net of any applicable
sales taxes. Any unsold production and in particular concentrate
are held as inventory and valued at production cost until sold.
(vii) Currencies The condensed financial
statements are presented in United States dollars ("US$" or "$").
Other currencies referred to in these condensed financial
statements are UK pounds ("UK£ "), Canadian dollars ("C$") and
Brazilian Reais ("BrR$").
Transactions in currencies other than the functional currency of
a company are recorded at a rate of exchange approximating to that
prevailing at the date of the transaction. At each balance sheet
date, monetary assets and liabilities that are denominated in
currencies other than the functional currency are translated at the
amounts prevailing at the balance sheet date and any gains or
losses arising are recognised in profit or loss.
On consolidation, the assets and liabilities of the Group's
overseas operations that do not have a US Dollar functional
currency are translated at exchange rates prevailing at the balance
sheet date. Income and expense items are translated at the average
exchange rate for the period. Exchange differences arising on the
net investment in subsidiaries are recognised in other
comprehensive income.
Copies of this release are available from the Company's website
at www.serabigold.com
Forward-looking statements This press
release contains forward-looking statements. All statements, other
than of historical fact, that address activities, events or
developments that the Company believes, expects or anticipates will
or may occur in the future (including, without limitation,
statements regarding the estimation of mineral resources,
exploration results, potential mineralization, potential mineral
resources and mineral reserves) are forward-looking statements.
Forward-looking statements are often identifiable by the use of
words such as "anticipate", "believe", "plan", may", "could",
"would", "might" or "will", "estimates", "expect", "intend",
"budget", "scheduled", "forecasts" and similar expressions or
variations (including negative variations) of such words and
phrases. Forward-looking statements are subject to a number of
risks and uncertainties, many of differ materially from those
discussed in the forward-looking statements. Factors that could
cause actual results or events to differ materially from current
expectations include, among other things, without limitation,
failure to establish estimated mineral resources, the possibility
that future exploration results will not be consistent with the
Company's expectations, the price of gold and other risks
identified in the Company's most recent annual information form
filed with the Canadian securities regulatory authorities on
SEDAR.com. Any forward-looking statement speaks only as of the date
on which it is made and, except as may be required by applicable
securities laws, the Company disclaims any intent or obligation to
update any forward-looking statement.
Qualified Persons Statement The
information contained within this announcement has been reviewed
and verified by Michael Hodgson, CEO of the Company. Mr Hodgson is
an Economic Geologist by training with over 25 years' experience in
the mining industry. He holds a BSc (Hons) Geology, University of
London, a MSc Mining Geology, University of Leicester and is a
Fellow of the Institute of Materials, Minerals and Mining and a
Chartered Engineer of the Engineering Council of UK, recognizing
him as both a Qualified Person for the purposes of Canadian
National Instrument 43-101 and by the AIM Guidance Note on Mining
and Oil & Gas Companies dated June 2009.
Neither the Toronto Stock Exchange, nor any other securities
regulatory authority, has approved or disapproved of the contents
of this news release.
Enquiries: Serabi Gold plc Michael Hodgson Chief
Executive Tel: +44 (0)20 7246 6830 Mobile: +44 (0)7799 473621
Clive Line Finance Director Tel: +44 (0)20 7246 6830 Mobile:
+44 (0)7710 151692 Email: contact@serabigold.com Website:
www.serabigold.com Beaumont Cornish Limited Nominated
Adviser Roland Cornish Tel: +44 (0)20 7628 3396 Michael Cornish
Tel: +44 (0)20 7628 3396 Fox Davies Capital Ltd UK Broker
Simon Leathers Tel: +44 (0)20 3463 5010 Jonathan Evans Tel: +44
(0)20 3463 5010
Serabi Gold (TSX:SBI)
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