LONDON (ShareCast) - (ShareCast News) - AIM-listed miner Serabi Gold reached record production for the third quarter at its two Brazil mines.
The Palito and Sao Chico gold mines in Para State, northern Brazil reported a record quarterly gold production of 10,233 ounces for the third quarter, up from 9,896 ounces in the second.

The company increased full-year production guidance to about 39,000 ounces of gold, marking a 5% increase on previous guidance for 37,000 ounces.

Mine production increased 28% from the second quarter to 43,133 tonnes, including 31,916 tonnes at a grade of 9.52 grammes per tonne from Palito and 11,217 tonnes at 9.88 g/t from Sao Chico.

About 42,464 tonnes of ore was processed through the treatment plant for the combined mining operations and 2,649 metres of horizontal mine development was completed with 1,607 metres at Palito and 1,042 metres at Sao Chico.

With the third ball mill operational since the end of the second quarter, along with a second flotation line and enhancements in the carbon-in-pulp, work has started on the installation of a new carbon regeneration kiln which should be completed early in the fourth quarter.

The plant enhancements increased plant capacity from 380-400 tonnes per day to over 500 tonnes, with the resulting increase dedicated to consumption of the surface stockpile.

Sao Chico was deepened to the 86m level, some 150 vertical metres below surface with the ramp is continuing at a slower rate to the 71m level.

During the third quarter, underground exploration drilling continued at both mines, while at Sao Chico the first 17 holes of a 6,000 metre programme was completed. The programme is testing the continuity of the central ore-zone below the current deepest workings at 86m down to level -20m.

The combined surface stockpiles at Palito and Sao Chico totalled 11,000 tonnes at an average grade of 3.3 gold per tonne.

Chief executive Mike Hodgson said: "This has been the company's best quarter since operations commenced, with over 10,200 ounces of gold produced. We have already produced more than 30,000 ounces in the current year and barring any unforeseen circumstances, remain comfortably on target to exceed our original production guidance by the year end.

"I am also pleased to report that we have commenced mine site exploration programmes at both sites. At Sao Chico we are investigating the potential strike extensions of the Sao Chico main vein to the east and west. Having recently completed the acquisition of the surrounding exploration licenses and secured land access we are now able to undertake this work, the first stage of which involves a ground geophysics induced polarisation survey.

"At Palito new exploration activity is also underway. Since 2012 exploration work has been 'parked' whilst efforts were concentrated on getting the operation underway and performing well."

Shares in Serabi Gold were down 2.44% to 5p at 1217 BST.

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