LONDON (ShareCast) - (Sharecast News) - Brazil-focussed development and mining company Serabi Gold updated the market on its wholly-owned Coringa project in the Tapajos region of Para State on Friday, reporting that underground development had progressed further into the Serra Zone, with all three veins now intersected on at least one level.
The AIM-traded firm said the V3 vein was intersected on the 320m level, recording 12.44 grams of gold per tonne over 0.86 metres.

It said the second and third veins, V2 and V1, had now also been intersected on the 320m level.

The V1 vein recorded an assay of 7.84 grams of gold per tonne over 1.25 metres, while the V2 structure was intersected and, as was expected, was narrow in the southern portion of the Serra Zone, becoming better developed in the main part of the zone.

Serabi said the V3 vein had also now been intersected on the 340m level, recording 14.61 grams of gold per tonne over 0.4 metres.

All three veins that comprise the Serra Zone are sub-vertical, which the board said was "highly beneficial" for mining.

The detailed engineering design of the Coringa process plant, meanwhile, was advancing with the firm's Brazilian engineering consultants, Icone Technology & Engineering.

It said the design was expected to be completed during the second quarter.

The company said it was also working with Brandt Environmental to complete an indigenous study (ECI), which it expected to conclude during the second quarter.

Serabi said it expected the detailed engineering, the award of the installation licence and the ECI could all be successfully completed before the end of the second quarter.

"Coringa is an advanced development stage project and Serabi's next producing mine that will double group production and convert the company into a multi-asset producer," said chief executive officer Mike Hodgson.

"We remain on track for initial gold production in 2023 and anticipate the mine driving strong margins with the project preliminary economic assessment reporting a healthy internal rate of return of 46% at $1,450 per ounce, which would be significantly improved at current prices.

"We are currently developing the Serra Zone, which is well drilled and hosts three subparallel veins."

Hodgson said the results from each of the initial intersections exceeded the company's expectations.

"Surface drilling has always suggested the V1 vein to be the major and most significant zone and this is supported by these initial results.

"The immediate plan is to develop on the 320m level along some of the strike length of each vein to generate a significant bulk sample which we will run through the ore sorter at our Palito Operation, 200 kilometres north of Coringa, to test its amenability to ore sorting."

The Coringa veins appeared "very similar" to the Palito veins, Mike Hodgson explained, leading the firm to believe the Serra zone - and all other zones at Coringa - lent themselves to ore-sorting, where dilutive waste could be screened out before the run-of-mine ore, particularly from development, entered the plant.

"This will reduce process costs and also the level of mine tailings required for filtration and dry stacking, generating significant benefit for the project."

At 1532 GMT, shares in Serabi Gold were down 2.73% at 52.04p.

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