"In December, we saw the long awaited start of a surface exploration drill programme.  The purpose of the programme is to drill some of the many potential vein extensions identified at Palito.  The initial programme is for approximately 8,000 metres but I hope that over the course of the year we will be able to undertake further drilling, including, in particular, a programme at Sao Chico.  The Palito orebody hosts a resource that extends over a one kilometre strike length, but sits within a trend and there are now clearly indications that have allowed the veins and their mineralisation to be traced over approximately four kilometres.  The continuity, grade and payability of the ore in these veins still needs to be established, but only drilling will determine this.  The Sao Chico orebody is completely open along strike with very little information outside the immediate mine limits.  Again there are strong indications that substantial strike extensions of the principal vein and adjacent veins are waiting to be defined.

"Ultimately, we have plans that would involve a much more ambitious drilling programme targeting up to two million ounces of total mineral resource across the two ore-zones, with the full programme, totalling 60,000 meters, to be completed in two phases.  This initial 8,000 metres forms part of phase one and is a programme we can start comfortably and commit to out of operational cash flow.  I will be providing further updates on this programme, as results are generated, during the first quarter of 2018.  

"A concern voiced by many investors about junior gold production companies is their ability to consistently, month after month, deliver on production.  Serabi has now since the start of 2016 enjoyed eight quarters of regular production and averaged over 9,500 ounces of gold per quarter over this period, which I feel clearly demonstrates our ability to deliver consistency and stability.     

"The acquisition of Coringa, it`s permitting and development over the forthcoming period along with successful exploration results in 2018 will, we hope, form the basis of significant expansion of gold production for Serabi, as we seek to establish ourselves as a significant gold producer in Brazil with a target of an annualised production rate of 100,000 ounces within the next two years."

Results

Total production for the fourth quarter of 2017 was 9,337 ounces of gold, generated from the processing of 43,345 tonnes of ore at overall average grades of 7.27 g/t of gold, which was sourced from mined ore from the Palito and Sao Chico orebodies, supplemented with lower grade surface stockpiled ROM and flotation tailings.  Mined tonnage for the quarter totalled 49,011 tonnes with a grade of 8.25 g/t of gold.   

At 31 December 2017, there were coarse ore stocks of approximately 15,000 tonnes of ore with an average grade of 3.0 g/t of gold, and approximately 40,000 tonnes of flotation tails with an average grade of 3.0 g/t of gold. These stockpiles are being consumed, albeit not as quickly as forecast, and for now the operation remains plant constrained. 

A total of 2,762 metres of horizontal development has been completed during the quarter, of which approximately 1,410 metres was ore development.  The balance is the ramp, cross cuts and stope preparation development. 

2018 Production Guidance

Management does not anticipate a major shift in mine performance and therefore hard rock gold production, in 2018 compared with 2017.  However, with the ability to process increased levels of stockpiled flotation tails in 2018, management expects that gold production for 2018 will exceed that of 2017 and be up to 40,000 ounces. 

Key Operational Information

1. Gold production figures are subject to amendment pending final agreed assays of the gold content of the copper/gold concentrate and gold doré that is delivered to the refineries.
2. Gold production totals for 2017 include treatment of 4,568 tonnes of flotation tails  at a grade of 3.97 g/t (2016 full year : 16,716 tonnes)
3. The table may not sum due to rounding.

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

The person who arranged for the release of this announcement on behalf of the Company was Clive Line, Director.

Enquiries:

Copies of this announcement are available from the Company`s website at www.serabigold.com.

Neither the Toronto Stock Exchange, nor any other securities regulatory authority, has approved or disapproved of the contents of this announcement.

GLOSSARY OF TERMS

The following is a glossary of technical terms:

 "Au" means gold.

 "assay" in economic geology, means to analyze the proportions of metal in a rock or overburden sample; to test an ore or mineral for composition, purity, weight or other properties of commercial interest.

"development" - excavations used to  establish access to the mineralised rock and other workings

"DNPM" is the Departamento Nacional de Produção Mineral.

"grade" is the concentration of mineral within the host rock typically quoted as grammes per tonne (g/t), parts per million (ppm) or parts per billion (ppb).

"g/t" means grams per tonne.

"granodiorite" is an igneous intrusive rock similar to granite.

"igneous" is a rock that has solidified from molten material or magma.

"Intrusive" is a body of igneous rock that invades older rocks.

"on-lode development" - Development that is undertaken in and following the direction of the Vein

 "mRL" - depth in metres measured relative to a fixed point - in the case of Palito and Sao Chico this is sea-level.  The mine entrance at Palito is at 250mRL.

"saprolite" is a weathered or decomposed clay-rich rock.

"stoping blocks" - a discrete area of mineralised rock established for planning and scheduling purposes that will be mined using one of the various stoping methods. 

"vein" is a generic term to describe an occurrence of mineralised rock within an area of non-mineralised rock.

Qualified Persons Statement
The scientific and technical information contained within this announcement has been reviewed and approved by Michael Hodgson, a Director of the Company. Mr Hodgson is an Economic Geologist by training with over 26 years` experience in the mining industry. He holds a BSc (Hons) Geology, University of London, a MSc Mining Geology, University of Leicester and is a Fellow of the Institute of Materials, Minerals and Mining and a Chartered Engineer of the Engineering Council of UK, recognising him as both a Qualified Person for the purposes of Canadian National Instrument 43-101 and by the AIM Guidance Note on Mining and Oil & Gas Companies dated June 2009.

Forward Looking Statements
Certain statements in this announcement are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ``believe``, ``could``, "should" ``envisage``, ``estimate``, ``intend``, ``may``, ``plan``, ``will`` or the negative of those, variations or comparable expressions, including references to assumptions. These forward looking statements are not based on historical facts but rather on the Directors` current expectations and assumptions regarding the Company`s future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors` current beliefs and assumptions and are based on information currently available to the Directors. A number of factors could cause actual results to differ materially from the results discussed in the forward looking statements including risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes, actions by governmental authorities, the availability of capital markets, reliance on key personnel, uninsured and underinsured losses and other factors, many of which are beyond the control of the Company. Although any forward looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with such forward looking statements.

ENDS

This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Serabi Gold plc via GlobeNewswire
HUG#2162169