LONDON (ShareCast) - (Sharecast News) - Brazil-focussed gold developer and miner Serabi reported a "strong improvement" in production in its second quarter on Wednesday, with 8,418 ounces recovered.
The AIM-traded firm said that made for an increase of 19% on the first quarter, with a 12% improvement in processed gold grade.

Year-to-date production totalled 15,480 ounces, with the company maintaining its annual production guidance at 30,000 ounces.

It also reported "excellent progress" at the Coringa project during the quarter, with further high-grade ore mined from the underground development, and ore-sorter test work returning "very positive" results and metallurgical recoveries of 96% achieved through the Palito processing plant.

The discovery of copper-gold-molybdenum porphyry was confirmed at Matilda in the period, with anomalous mineralisation encountered along the entire length of three holes at average grades of over 0.2% copper equivalent.

"It has been an excellent quarter for Serabi with significant progress on three fronts," said chief executive officer Mike Hodgson.

"We have seen a strong recovery in production from the Palito operations with 8,418 ounces produced, a 19% increase on the first quarter.

"This improvement has been driven by the measures we implemented during the first quarter and is a testament to the hard work of the operational team."

Hodgson said the company was continuing to optimise the Palito operation, and with the increased production he said that should improve the firm's unit costs going forward.

"Development at Coringa continues to progress extremely well - the underground mine development is advancing to plan and generating high grade ore that we are trucking to Palito.

"Given the success of the ore sorting test work , we are now undertaking internal studies to evaluate an incremental development approach whereby we install a crushing plant and ore sorter at Coringa to generate a higher-grade product to truck to Palito.

"Both the crushing plant and ore sorter are required as part of the full processing plant but install ation now, as an interim step, will allow us to increase our short-term production and revenue, and therefore provide the opportunity to fund more of the development from cash flow thereby reduce the level of future debt capital required for the full plant construction."

Mike Hodgson said the exploration highlight for the quarter was the receipt of multi-element assay results from the three holes drilled at the Matilda Prospect, confirming a porphyry discovery.

"Each hole encountered anomalous mineralisation from top to bottom including some zones of higher grade.

"We are working with external porphyry experts to plan the next phase of exploration.

"In parallel, we have received interest from a number of major mining companies for further information."

Serabi would thus evaluate the best options to move the Matilda Prospect and other regional targets forward over the coming months, Hodgson added.

"It is an exciting time for the company as we see improved production from Palito, development at Coringa progressing apace and a new porphyry discovery at Matilda."

At 0903 BST, shares in Serabi Gold were down 0.99% at 40p.

Reporting by Josh White at Sharecast.com.

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