LONDON (ShareCast) - (Sharecast News) - Serabi Gold reported third-quarter production of 8,541 ounces on Tuesday, bringing total gold production for the first nine months of 2022 to 24,021 ounces.
The AIM-traded firm said it held cash at period end on 30 September of $10.18m, down from $12.2m at the end of 2021.

EBITDA for the first nine months totalled $5.9m, down from $15m year-on-year, as it recorded a post-tax loss of $0.87m, after the provision of $1m against the recovery of historic tax debts owed to the company in Brazil.

Losses per share came in at 1.15 cents, swinging from a profit per share of 10.64 cents for the same nine month period in 2021.

Net cash inflow from operations for the nine months, after mine development spending of $2.88m, was $0.11m, down from an $8.45m inflow in the same period last year.

Serabi said it achieved an average gold price of $1,810 per ounce, up from $1,772 year-on-year, while its cash cost for the three months ended 30 September was down to $1,242 per ounce, down from $1,395 per ounce in the second quarter, representing an 11% improvement on the quarter.

Its all-in sustaining cost for the quarter was $1,564 per ounce, down from $1,637, making for a 4.5% improvement on the second quarter.

"Following good progress in the second quarter in realising improvements in cost efficiency it is very pleasing to report a continued reduction in quarterly all-in sustaining and cash costs," said chief financial officer Clive Line.

"The revenue and operating costs reported for the third quarter also include revenues generated from the first sales of gold from the Coringa project together with the associated operating costs incurred.

"Revenues from these initial sales were US$1.45 million or 3% of the year to date sales revenue."

Line said that, while gold production at 8,541 ounces was slightly higher than the second quarter, ounces sold in the third quarter were 1,696 lower than in the second quarter, which included the release of some inventory.

"The lower sales volume in the third quarter, albeit at a better margin, together with the lower gold price and the decision to make an additional provision against the recovery of historic tax debts owed to the company in Brazil have however reduced the overall level of gross operating profit compared to the preceding quarter.

"Increased costs of operations at the Palito Complex reflect the increased level of underground drilling being undertaken which is building mineral resources for the future and helping secure production for the coming years.

"The level of expenditure incurred in the first nine months of the year has increased by 51%."

While Brazil's government also reduced the level of taxes applied to diesel, Clive Line said spending on fuel and electricity also increased 45% compared with the same nine month period of 2021.

Headcount reductions helped to ensure that labour costs remained static, the CFO added, notwithstanding the mandatory cost-of-living increases incurred.

"The cash position remains strong, with cash held at 30 September of $10.2m notwithstanding the continued investment being made in the development of the Coringa project.

"Whilst we anticipate gold production continuing to improve as we progress into 2023, with further mining levels developed, and new areas prepared for stoping, we expect Coringa to continue to require funding from the Palito cash flow in the immediate term."

At 1125 GMT, shares in Serabi Gold were down 1.74% at 26.04p.

Reporting by Josh White for Sharecast.com.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE