LONDON (ShareCast) - (Sharecast News) - Serabi Gold updated the market on its third quarter operational and development activities in the Tapajos region of Para State in northern Brazil on Thursday, reporting quarterly gold production of 7,224 ounces, resulting in 24,748 ounces for the year to date.
The AIM-traded firm said 44,077 tonnes of ore was mined during the quarter, at 4.84 grams of gold per tonne.

A total of 46,135 tonnes of run-of-mine ore was processed through the plant from the combined Palito and Sao Chico orebodies, with an average grade of 4.75 grams of gold per tonne.

The board said 3,037 metres of horizontal development was completed during the quarter, making for the second consecutive quarter when more than 3,000 metres of development had been achieved.

A Licença Prévia licence for the Coringa gold project was issued by SEMAS on 8 October, while the company also acquired two new "highly prospective" tenements to complement the Sao Chico exploration potential, including the "highly prospective" Sao Domingos exploration tenement, immediately to the west of Sao Chico.

Serabi said Sao Domingos hosted multiple past and present artisanal workings.

Fourth quarter production guidance was for 8,000 ounces, with full-year guidance of 33,000 ounces.

The firm also noted that regional exploration activities at the Calico and Juca prospects resumed during the quarter.

On the financial front, Serabi said its cash balance at the end of September totalled $11m, which was an increase of $1.4m since 30 June.

It paid $2.5m to Equinox Gold during the period, in settlement of the final acquisition payment due for the Coringa gold project.

A further $1m was paid on 1 October, following which $7.5m remained outstanding.

Serabi drew down $0.5m of its convertible loan with Greenstone Resources, meaning a total of $2m was drawn down at the end of September.

"Whilst 25,000 ounces of gold produced for the year to date is significantly lower than the company's initial expectations, the excellent gold prices and a favourable exchange rate has seen the company continue to generate positive cash flow during the third quarter," said chief executive officer Mike Hodgson.

"Reflecting the cash flow being generated, the group drew down, in July, $0.5m of the convertible loan notes that are being subscribed for by Greenstone Resources, but since then has not required to draw down any further amount.

"The investment by Greenstone, the terms for which were concluded and announced in April, was to help finance the liability of $12m due to Equinox Gold for the Coringa gold project."

At 1056 BST, shares in Serabi Gold were down 10.14% at 94.35p.

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