LONDON (ShareCast) - (Sharecast News) - Brazil-focussed gold development and mining company Serabi Gold reported a "robust" second quarter on Thursday, with gold production totalling 9,274 ounces, making for the best quarterly performance since 2019.
The AIM-traded firm said total ore mined during the quarter was 43,051 tonnes at 7.12 grams of gold per tonne, which was a 27% improvement in grade compared to the 2020 average.

A total of 39,976 tonnes of run of mine ore was processed through the plant from the combined Palito and São Chico orebodies, with an average grade of 7.32 grams of gold per tonne, making for a 17% and a 39% improvement on the first quarter of 2021 and the fourth quarter of 2020, respectively.

Serabi completed 2,961 metres of horizontal development during the quarter, bringing the year-to-date total to 6,534 metres.

Preparation for the Coringa underground development was underway, the board said, with the operating fleet brought in and key hires made.

Initial development of the portal was planned to begin later in July.

On the financial front, cash balances at the end of June totalled $18.1m, with all debt obligations now repaid.

Cash was higher than initially forecast, partly because of higher gold sales in June than originally projected, the directors explained.

Net cash generation was $2.17m in the first six months of 2021 after accounting for all operational and capital expenditures of the Palito Complex, all corporate outgoings, and all exploration and Coringa pre-development payments.

Serabi maintained its previously-stated guidance that production for 2021 from the current Palito Complex operations would be between 33,000 and 36,000 ounces, with forecast production in 2022 then increasing to around 45,000 ounces.

"After an encouraging first quarter in 2021, we have built on that with an excellent second quarter producing over 9,200 ounces," said chief executive officer Mike Hodgson.

"This is largely the result of a healthy improvement in mined grades.

"As I have mentioned before, the restrictions the pandemic put on us in 2020 meant fewer people at site and a simplified operation with fewer mine faces being worked."

Hodgson said that resulted in "less optionality" to maintain higher grades, meaning the firm had to mine some lower grade ore blocks.

"The gradual return to normality has allowed us to increase the available mine faces and with that, the option to 'cherry pick' the better grades to feed the plant with the best ore resulting in mine and plant grades currently 27% and 30% above last year's average grades.

"At the mid-year we remain ahead of our internal production forecast and remain on track to meet 2021 guidance."

At 1011 BST, shares in Serabi Gold were up 3.71% at 66.38p.

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