LONDON (ShareCast) - (Sharecast News) - Brazil-focussed gold mining and development company Serabi Gold updated the market on its operations and projects in Brazil on Wednesday, reporting January gold production of 3,671 ounces, in line with its previous guidance.
The AIM-traded firm said the treatment of stockpiled flotation tailings was underway through the recently-commissioned independent trommel feed system, and confirmed the testing of the ore sorter was now complete, with the equipment being shipped to Brazil.

Its cash position at the end of January was $12.8m.

At Coringa, Serabi Gold said the geological resource update drilling was close to completion, with the update and preliminary economic assessment study (PEA) still on schedule to be published in March and June respectively.

"We are delighted to have started the year in much the same way as 2018 ended, with excellent production," said chief executive officer Mike Hodgson.

"Production guidance for 2019 has been set at 40,000-44,000 ounces, so January's total gold production of over 3,650 ounces has been a great way to start the year.

"The step up from the production levels of 2017 and 2018 will be driven by improved efficiencies in both orebodies and the processing of some of the 40,000 tonnes of flotation tails which will supplement the normal 'run-of-mine' production."

Hodgson confirmed the company had now commissioned the scrubber, which was started on 10 January, and had worked "superbly" since then.

He explained that it allowed the tails - which had already been milled - to be fed directly to the cyanidation plant, therefore not consuming "valuable capacity" in the milling section of the plant.

"At Coringa, we are close to concluding a drill programme, the results from which will be included in the resource update.

"As reported at the end of January the results to date have been excellent.

"We remain on schedule to publish an updated geological resource estimate before the end of the first quarter, and will follow this up with the preparation of a PEA, the results of which are expected to be available before the end of June 2019."

In light of the recent mining dam collapse at Brumadinho in the Brazilian state of Minas Gerais, Hodgson said he wanted to reassure Serabi's stakeholders regarding the tailings management facility at Palito.

"Serabi's operations are all about quality not quantity, therefore we mine and process almost insignificant volumes of rock relative to industrial mineral, iron ore and bauxite operations such as Brumadinho.

"New legislation has been introduced following the dam failure at Mariana, also in Minas Gerais, in 2015.

"This legislation has, however been a rather 'one size fits all' approach, and as a result we do have a highly 'over-engineered' tailings facility and the annual audit of our tailings facilities, undertaken late last year by an accredited Brazilian geotechnical engineering expert, confirmed our tailings management facility to be in good order, and it remains fully licenced and certified."

Hodgson said the company did expect further tightening of legislation post-Brumadinho, with the National Mining Agency recently moving to ban all upstream tailings dams.

"Such a move would not affect the safety and legality of our tailings facility which comprises small ponds, rather than dams, and is not upstream of any nearby population," Hodgson added.

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