LONDON (ShareCast) - (Sharecast News) - Brazil-focussed gold mining and development company Serabi Gold announced further results from its ongoing surface and underground exploration diamond drilling programme being undertaken on the Sao Chico orebody at its Palito Complex on Tuesday.
The AIM-traded firm had reported on 6 January that it had started a 9,600 metre step-out surface diamond drill programme and an 8,000 metre underground drill programme in the fourth quarter of 2019.

It said the campaign was to test the Sao Chico orebody extension in all directions.

New intersections since 6 January indicated mineable grades over mineable widths up to 300 metres to the west and 230 metres to the east of the current mine limits.

Key intercepts to the west included intersections grading 1.72 metres at 25.00 grams per tonne in 19-SCUD-304, 2.4 metres at 5.04 grams of gold per tonne in 19-SCUD-316, and 4.4 metres at 4.28 grams of gold per tonne in 19-SCUD-318.

It said key intercepts to the east included intersections grading 1.15 metres at 11.65 grams of gold per tonne in 19-19-SC-152.

Underground drilling intersected significant down dip extension to the current mine limits, for a further 220 metres, below the lowest level of the current development, level -48mRL, which was itself around 480 vertical metres below surface.

A "significant" intercept of 4.08 metres at 25.37 grams of gold per tonne was reported in 19-SCUD-333.

"The results from this drilling campaign are very encouraging," said chief executive officer Mike Hodgson.

"When the Sao Chico orebody first went into production drilling had been limited to testing of the orebody directly below the original artisanal workings.

"Subsequent terrestrial geophysics programmes undertaken in 2017 and 2018, highlighted the potential to extend the orebody to the east and west."

Hodgson said that, since the announcement of the initial drill results on 6 January, the current campaign had continued to report positive results as it stepped out both the east and west, intersecting the continuation of the same orebody with both mineable grades and widths.

"To the west, drilling has been undertaken 300 metres beyond the current western limit of the mine, and the intersections are indicative of being able to extend this mine limit.

"I would anticipate that these results will contribute to a significant expansion of the current mineral resource.

"We will continue stepping-out 100 metres at a time, and expect that continued success will expand the mineral resource further."

To the east, Hodgson noted the company had also intersected high grade mineralisation with the most easterly hole returning an intersection of 11.7 grams of gold per tonne over 1.2 metres.

"This result is located 220 metres to the east of the current eastern limit of the mine and therefore the orebody remains open to the east and justifies additional step out drilling to test this eastern extension.

"Perhaps the most encouraging result is, however, what is now the deepest intersection at Sao Chico, where hole 19-SCUD-333 has reported a gold grade of 25.37 grams per tonne over a width of 4.08 metres.

"This hole is approximately 200 metres below the current lowest development level in the mine and therefore nearly 500 metres from surface.

An intersection of that quality provided the company with "strong" encouragement of continuity of the Sao Chico orebody at depth, Mike Hodgson said, and therefore potential further resource growth and extended life of the operation.

"We have now completed approximately 40% of the planned drilling programme which will continue until mid-2020, following which the company intends to undertake a new mineral resource estimate during the second half of the year.

"Results from the remainder of the drilling campaign will be issued as they become available over the coming months."

At 1513 GMT, shares in Serabi Gold were up 1.25% at 81p.

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