Serabi advises that it has today dispatched to shareholders its investor newsletter for the second quarter of 2007 ending 30 June 2007.

 

The Company has highlighted in its newsletter the following matters. The full version of the quarterly update is available from Serabi's offices, Cleary Court, 21-23 St Swithins Lane, London EC4N 8AD, or from the Company's website: www.serabimining.com

 

 

 

 

 

The Company undertook with Numis Securities Limited a placing of shares during the quarter raising gross proceeds of �12.50 million.  Investments from the funds combined with cash-flow will facilitate the development of new production, initiate an enhanced exploration programme, optimise financial management and place the company in a more competitive position to acquire new opportunities.

 

Detailed evaluation is underway on the Ruari's Ridge, Chico do Santo and Palito West projects following recent discoveries.  Drill programmes are underway on all the prospects.  At Ruari's Ridge the 10,000 metre programme will be supplemented with an on-lode development entering from the north-west end.  An access decline is planned to commence during the fourth quarter assuming this evaluation is successful.  This decline would cross the Palito West zone providing immediate ore access.

 

Exploration at Chico do Santo has indicated five high-grade, gold-copper mineralised structures with potential for future development mining access from the existing Palito Main Zone operations.

 

The Company remains confident of the further potential of the Jardim do Ouro and has a goal to establish resources over the next 24 months to support annual production of over 100,000 ounces gold equivalent.

 

Production for the quarter has remained relatively flat after some difficulties were encountered with the introduction of long-hole mining, resulting in lower than planned grades.  The Company has adapted its mining technique to the cut-and-fill method which has brought immediate grade benefits, and recent results point to an improved third quarter aided also by an increase in planned daily milling rates to approximately 550 tonnes.

 

Subject to the detailed evaluation being undertaken at Ruari's Ridge, Chico do Santo and Palito West, the Company envisages that annualised production rates could rise to between 60,000 and 70,000 ounces gold equivalent during 2008 at a projected capital cost of US$7 million.

 

The price of copper has risen by 142% since the Company's IPO in May 2005, and in the light of supply concerns analysts have been raising their forecast for the next the next two years.  Such an outlook is positive for Serabi, which at current prices generates 15% of revenue for copper sales.