TIDMSRB
For immediate release
14 November 2017
Serabi Gold plc
("Serabi" or the "Company")
Unaudited Interim Financial Results for the three and nine month periods
to 30 September 2017 and Management's Discussion and Analysis
Serabi Gold (AIM:SRB, TSX:SBI), the Brazilian focused gold mining and
development company, today releases its unaudited interim financial
results for the three and nine month periods ending 30 September 2017
and at the same time has published its Management's Discussion and
Analysis for the same period.
Key Financial Information
SUMMARY FINANCIAL STATISTICS FOR THE THREE AND NINE
MONTHSING 30 SEPTEMBER 2017
3 months to 9 months to 3 months to 9 months to
30 September 2017 30 September 2017 30 September 2016 30 September 2016
US$ US$ US$ US$
Revenue 12,908,790 36,225,050 16,209,753 42,120,928
Cost of Sales (7,695,870) (24,558,180) (10,216,119) (25,828,941)
Depreciation
and
amortisation
charges (2,934,986) (7,545,847) (2,907,161) (6,552,101)
Gross profit 2,277,934 4,121,023 3,086,473 9,739,886
Profit /
(loss)
before tax 490,532 (337,135) 743,503 2,305,731
Profit after
tax 235,051 (770,629) 465,480 1,471,662
Earnings per
ordinary
share
(basic) 0.03c (0.11c) 0.07c 0.22c
Average gold
price
received US$1,238 US$1,256
As at As at
30 September 2017 31 December 2016
US$ US$
Cash and cash
equivalents 9,753,385 4,160,923
Net assets 64,598,323 63,378,973
Cash Cost and
All-In
Sustaining
Cost
("AISC")
9 months to 9 months to
30 September 2017 30 September 2016
Gold
production
for cash
cost and
AISC
purposes 27,666 29,900
Total Cash US$795 US$772
Cost of
production
(per ounce)
Total AISC of US$1,058 US$951
production
(per ounce)
Key Operational Information
SUMMARY PRODUCTION STATISTICS FOR THE THREE QUARTERS
TO 30 SEPTEMBER 2017
Quarter Quarter Quarter Year to Quarter Quarter Quarter Quarter
1 2 3 Date 1 2 3 4 Total
2017 2017 2017 2017 2016 2016 2016 2016 2016
Horizontal
development
- Total Metres 2,251 1,855 2,996 7,102 2,925 2,941 2,649 2,694 11,209
Mined ore -
Total Tonnes 36,918 42,075 41,263 120,256 37,546 33,606 43,133 44,579 158,864
Gold grade (g/t) 10.12 7.80 9.80 9.20 11.02 9.56 9.61 8.94 9.74
Milled ore Tonnes 46,663 43,905 44,954 135,522 36,615 39,402 42,464 40,485 158,966
Gold grade (g/t) 7.09 6.26 7.21 6.86 8.58 8.17 8.08 7.60 8.11
Gold
production
(1) (2) Ounces 9,861 8,148 9,657 27,666 9,771 9,896 10,310 9,413 39,390
(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 4,941 tonnes
of flotation tails (2016 full year : 16,716 tonnes)
Financial Highlights
-- Cash Cost for the year to date of US$795 per ounce of gold.
-- All-In Sustaining Cost for the year to date of US$1,058 per ounce of
gold.
-- Gross profit from operations for the first nine months of 2017 of US$4.12
million.
-- Profit per share of 3 cents for Q3 and loss per share of 11 cents for the
first nine months of 2017.
-- Cash holdings of US$9.75 million at 30 September 2017.
-- Average gold price of US$1,238 per ounce received on gold sales in the
first nine months of 2017.
2017 Guidance
-- Forecast gold production for the fourth quarter of 2017 of approximately
10,000 ounces to achieve full year production of approximately 38,000
ounces.
-- Cost guidance for 2017 of an All-In Sustaining Cost ("AISC") of US$1,000
to US$1,025 per ounce.
Operational Highlights
-- Third quarter production of 9,657 ounces of gold.
-- Mine production totalled 41,263 tonnes at 9.80 grammes per tonne ("g/t")
of gold.
-- 44,954 tonnes processed through the plant for the combined mining
operations, with an average grade of 7.21 g/t of gold.
-- 2,996 metres of horizontal mine development completed in the quarter.
-- The Palito orebody saw development and production focus on the Senna,
Pipocas, G3 and Mogno veins principally, with three other veins, (Zonta,
G1, Jatoba) in development.
-- The mine ramp accessing the Sao Chico orebody has now reached the 26mRL,
approximately 230 vertical metres below surface. Production is coming
from the 128mRL and 100mRL levels with levels 86mRL, 70mRL, 56mRL, 40mRL
and now 26mRL all either developed or in development, comfortably ahead
of production.
-- By the end of the third quarter, surface ore stocks were approximately
15,000 tonnes (30 June 2017: 12,000 tonnes) with an average grade of 3.2
g/t of gold.
-- A surface diamond drill programme of approximately 10,000 metres has
commenced and will principally focus on the strike extensions of the
veins in the Palito orebody.
-- The results of a new 43-101 Technical Report comprising the geological
resource and mineable reserve are close to completion and are expected to
be issued before the end of November.
Mike Hodgson, CEO of Serabi commented,
"It was very pleasing to see third quarter production returning to
expected levels, after a slightly disappointing second quarter. We have
now achieved total production for the first nine months of the year of
27,666 ounces. Whilst a little below the production for the same period
in 2016, the shortfall was simply due to a short term operational
problem at Sao Chico during April and May, when we lost remote scoop
capability and therefore had to rely on lower grade development ore for
this period. By June the problem was over, and we have seen strong
monthly productions figures since.
"Even more pleasing is the relative financial strength of the Company at
the end of the quarter, with cash holdings increasing to over US$9.7
million. We have benefitted during the third quarter from a relatively
weak Real and a good gold price and with so much of our costs being in
Reais, it is the gold price in Reais that really dictates our margins
and cash generation.
"We have earmarked some of this cash to be reinvested back into the
operations and in addition to the acquisition of an ore-sorter, other
major capital investment include the acquisition of some new mine trucks,
and expansion our tailings management facilities.
"We have also commenced a 10,000 metre surface drilling programme which
is concentrating on the strike extensions of the veins at the Palito
orebody. We anticipate this is just the start of a larger programme
which will identify new orebodies, expand the resource base and support
increased levels of gold production in the longer term.
"Whilst profitability is down compared with 2016, it must be remembered
that not only is production slightly down, resulting in lower revenue,
but the Group has been impacted by the relative strength of the Real in
2017 when compared with 2016. The average exchange rate for the nine
months to 30 September 2016 was BrR$3.55 to US$1.00 and BrR$3.15 to
US$1.00 for the first nine months of 2017 a swing of almost eleven per
cent. Nonetheless our operating costs for the nine months have fallen by
almost US$2 million or over 7 percent, a reflection of the improvements
and efficiencies that we are constantly seeking to implement.
"We have reported a small profit before tax of US$0.5 million for the
third quarter which is a pleasing turnaround after the loss reported for
the second quarter and I hope that, if production during the fourth
quarter is in line with expectation, this can be continued."
SERABI GOLD PLC
Condensed Consolidated Statements of Comprehensive Income
For the three months ended For the nine months ended
30 September 30 September
2017 2016 2017 2016
(expressed in US$) Notes (unaudited) (unaudited) (unaudited) (unaudited)
CONTINUING OPERATIONS
Revenue 12,908,790 16,209,753 36,225,050 42,120,928
Operating expenses (7,295,870) (10,216,119) (23,938,180) (25,828,941)
Provision for impairment of inventory (400,000) - (620,000) -
Depreciation of plant and equipment (2,934,986) (2,907,161) (7,545,847) (6,552,101)
Gross profit 2,277,934 3,086,473 4,121,023 9,739,886
Administration expenses (1,407,836) (1,267,898) (3,828,194) (3,812,218)
Share based payments (101,665) (101,072) (279,697) (249,828)
Gain on disposal of assets 15,621 2,070 131,596 29,039
Operating profit 784,054 1,719,573 144,728 5,706,879
Foreign exchange loss (24,021) (28,860) (144,420) (101,268)
Finance expense (269,532) (947,250) (337,543) (3,299,989)
Investment income 31 40 100 109
Profit / (loss) before taxation 490,532 743,503 (337,135) 2,305,731
Income tax expense (255,481) (278,023) (433,494) (834,069)
Profit / (loss) for the period from continuing operations
(1) (2) 235,051 465,480 (770,629) 1,471,662
Other comprehensive income
Items that may be reclassified subsequently to profit
or loss
Exchange differences on translating foreign operations 2,367,977 (588,314) 1,710,282 9,041,254
Total comprehensive profit / (loss) for the period
(2) 2,602,028 (122,834) 939,653 10,512,916
Profit / (loss) per ordinary share (basic) (1) 3 0.03c 0.07c (0.11c) 0.22c
Profit / (loss) per ordinary share (diluted) (1) 3 0.03c 0.06c (0.11c) 0.21c
(1) All revenue and expenses arise from continuing operations.
(2) The Group has no non-controlling interests and all losses are
attributable to the equity holders of the parent company.
SERABI GOLD PLC
Condensed Consolidated Balance Sheets
As at As at As at
30 September 30 September 31 December
2017 2016 2016
(expressed in US$) (unaudited) (unaudited) (audited)
Non-current assets
Deferred exploration costs 10,235,454 9,731,144 9,990,789
Property, plant and equipment 44,260,723 44,860,837 45,396,140
Deferred Taxation 3,164,441 - 3,253,630
Total non-current assets 57,660,618 54,591,981 58,640,559
Current assets
Inventories 7,196,529 7,865,290 8,110,373
Trade and other receivables 1,433,010 9,165,344 1,233,049
Prepayments and accrued income 4,950,976 2,652,081 3,696,550
Cash and cash equivalents 9,753,385 3,116,123 4,160,923
Total current assets 23,333,900 22,798,838 17,200,895
Current liabilities
Trade and other payables 5,313,706 6,564,033 4,722,139
Secured loan 1,290,000 1,425,058 1,371,489
Trade and asset finance facilities 1,054,632 3,260,272 1,592,568
Derivative financial liabilities 732,470 262,000 -
Accruals 450,867 367,646 635,446
Total current liabilities 8,841,675 11,879,009 8,321,642
Net current assets 14,492,225 10,919,829 8,879,253
Total assets less current
liabilities 69,135,527 65,511,810 67,519,812
Non-current liabilities
Trade and other payables 2,276,769 2,275,312 2,211,078
Secured loan 3,125,000 - -
Provisions 1,905,230 2,284,002 1,851,963
Trade and asset finance facilities 247,521 210,657 77,798
Total non-current liabilities 7,554,520 4,769,971 4,140,839
Net assets 64,598,323 60,741,839 63,378,973
Equity
Share capital 5,540,960 5,540,960 5,540,960
Share premium 1,722,222 1,722,222 1,722,222
Option reserve 1,355,583 1,237,581 1,338,652
Other reserves 3,404,624 361,461 3,051,862
Translation reserve (28,897,566) (30,185,281) (30,607,848)
Distributable surplus 81,472,500 82,064,896 82,333,125
Equity shareholders' funds 64,598,323 60,741,839 63,378,973
The interim financial information has not been audited and does not
constitute statutory accounts as defined in Section 434 of the Companies
Act 2006. Whilst the financial information included in this announcement
has been compiled in accordance with International Financial Reporting
Standards ("IFRS") this announcement itself does not contain sufficient
financial information to comply with IFRS. The Group statutory accounts
for the year ended 31 December 2016 prepared under IFRS as adopted in
the EU and with IFRS and their interpretations adopted by the
International Accounting Standards Board have been filed with the
Registrar of Companies following their adoption by shareholders at the
next Annual General Meeting. The auditor's report on these accounts was
unqualified but did contain an Emphasis of Matter with respect to the
Company and the Group regarding Going Concern. The auditor's report did
not contain a statement under Section 498 (2) or 498 (3) of the
Companies Act 2006.
SERABI GOLD PLC
Condensed Consolidated Statements of Changes in Shareholders' Equity
Share
(expressed in US$) Share Share option Other Translation Retained
reserves Total
capital premium reserve (1) reserve earnings equity
Equity shareholders' funds at 31 December 2015
(audited) 5,263,182 - 2,747,415 450,262 (39,226,535) 77,549,321 46,783,645
Foreign currency adjustments - - - - 9,041,254 - 9,041,254
Profit for the period - - - - - 1,471,662 1,471,662
Total comprehensive income for the period - - - - 9,041,254 1,471,662 10,512,916
Warrants lapsed - - - (88,801) - 88,801 -
Shares Issued in period 277,778 1,722,222 - - - - 2,000,000
Release of fair value provision on convertible
loan - - - - 1,195,450 1,195,450
Share options lapsed in period - - (1,759,662) - - 1,759,662 -
Share option expense - - 249,828 - - - 249,828
Equity shareholders' funds at 30 September 2016
(unaudited) 5,540,960 1,722,222 1,237,581 361,461 (30,185,281) 82,064,896 60,741,839
Foreign currency adjustments - - - - - 2,958,630 2,958,630
Loss for the period - - - - (422,567) - (422,567)
Total comprehensive income for the period - - - - (422,567) 2,958,630 2,536,063
Transfer to taxation reserve - - - 2,690,401 - (2,690,401) -
Share option expense - - 101,071 - - - 101,071
Equity shareholders' funds at 31 December 2016
(audited) 5,540,960 1,722,222 1,338,652 3,051,862 (30,607,848) 82,333,125 63,378,973
Foreign currency adjustments - - - - 1,710,282 - 1,710,282
Loss for the period - - - - - (770,629) (770,629)
Total comprehensive income for the period - - - - 1,710,282 (770,629) 939,653
Transfer to taxation reserve - - - 352,762 - (352,762) -
Share options lapsed in period - - (262,766) - - 262,766 -
Share option expense - - 279,697 - - - 279,697
Equity shareholders' funds at 30 September 2017
(unaudited) 5,540,960 1,722,222 1,355,583 3,404,624 (28,897,566) 81,472,500 64,598,323
1. Other reserves comprise a merger reserve of US$361,461 and a taxation
reserve of US$3,043,163 (2016: merger reserve of US$ 361,461 and a
taxation reserve of US$2,690,401)
SERABI GOLD PLC
Condensed Consolidated Cash Flow Statements
For the three months For the nine months
ended ended
30 September 30 September
2017 2016 2017 2016
(expressed in US$) (unaudited) (unaudited) (unaudited) (unaudited)
Operating activities
Profit / (loss) before taxation 235,051 465,480 (770,629) 1,471,662
Depreciation - plant, and equipment 2,934,986 2,907,161 7,545,847 6,552,101
Net financial expense 293,522 976,071 481,863 3,401,148
Provision for impairment of inventory 400,000 - 620,000 -
Taxation 255,481 278,023 433,494 834,069
Share-based payments 101,665 101,072 279,697 249,828
Foreign exchange (gain) / loss (359,590) 38,109 (319,030) 207,785
Changes in working capital
(Increase) / decrease in inventories (374,877) 1,286,509 612,487 505,768
Decrease / (increase) in receivables, prepayments
and accrued income 1,076,370 330,084 (1,500,915) (2,434,886)
(Decrease) / increase in payables, accruals and
provisions (409,010) (68,421) (405,421) 1,411,427
Net cash inflow from operations 4,153,598 6,314,088 6,977,393 12,198,902
Investing activities
Purchase of property, plant and equipment and projects
in construction (265,246) (713,069) (1,349,085) (2,840,740)
Mine development expenditures (1,191,322) (469,608) (3,155,641) (1,718,759)
Exploration and development expenditure - (247,479) (2,501) (247,479)
Proceeds from sale of assets 59,659 2,070 175,634 29,039
Interest received 31 40 100 109
Net cash outflow on investing activities (1,396,878) (1,428,046) (4,331,493) (4,777,830)
Financing activities
Repayment of short-term secured loan - (1,333,334) - (2,666,667)
Draw-down of short-term loan facility 3,628,511 - 3,628,511 -
Draw-down of short-term convertible loan facility - - - 2,000,000
Receipts from short-term trade finance - 4,454,632 - 16,355,730
Repayment of short-term trade finance - (9,411,663) - (20,921,538)
Payment of finance lease liabilities (346,566) (161,210) (478,730) (542,731)
Interest paid and other finance costs (166,363) (125,901) (233,818) (624,233)
Net cash inflow / (outflow) from financing activities 3,115,582 (6,577,476) 2,915,963 (6,399,439)
Net increase / (decrease) in cash and cash equivalents 5,872,302 (1,691,434) 5,561,863 1,021,633
Cash and cash equivalents at beginning of period 3,832,218 4,774,537 4,160,923 2,191,759
Exchange difference on cash 48,865 33,020 30,599 (97,269)
Cash and cash equivalents at end of period 9,753,385 3,116,123 9,753,385 3,116,123
Notes
1. General Information
The financial information set out above does not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006. Whilst the
financial information included in this announcement has been compiled in
accordance with International Financial Reporting Standards ("IFRS")
this announcement itself does not contain sufficient financial
information to comply with IFRS. A copy of the statutory accounts for
2016 has been filed with the Registrar of Companies following their
adoption by shareholders at the last Annual General Meeting. The full
audited financial statements, for the year end 31 December 2016, do
comply with IFRS.
2. Basis of Preparation
These interim condensed consolidated financial statements are for the
three and nine month periods ended 30 September 2017. Comparative
information has been provided for the unaudited three and nine month
periods ended 30 September 2016 and, where applicable, the audited
twelve month period from 1 January 2016 to 31 December 2016. These
condensed consolidated financial statements do not include all the
disclosures that would otherwise be required in a complete set of
financial statements and should be read in conjunction with the 2016
annual report.
The condensed consolidated financial statements for the periods have
been prepared in accordance with International Accounting Standard 34
"Interim Financial Reporting" and the accounting policies are consistent
with those of the annual financial statements for the year ended 31
December 2016 and those envisaged for the financial statements for the
year ending 31 December 2017. The Group has not adopted any standards or
interpretation in advance of the required implementation dates. It is
not anticipated that the adoption in the future of the new or revised
standards or interpretations that have been issued by the International
Accounting Standards Board will have a material impact on the Group's
earnings or shareholders' funds.
These financial statements do not constitute statutory accounts as
defined in Section 434 of the Companies Act 2006.
1. Going concern
On 1 February 2016, the Group announced that, with effect from 1 January
2016, the Sao Chico Mine had achieved Commercial Production. The Palito
Mine has been in Commercial Production since 1 July 2014.
The Directors anticipate the Group now has access to sufficient funding
for its immediate projected needs. The Group expects to have sufficient
cash flow from its forecast production to finance its on-going
operational requirements, to repay its secured loan facilities and to,
at least in part, fund exploration and development activity on its other
gold properties. On 30 June the Group completed a re-negotiation of an
increased secured loan facility of US$5 million (including the existing
loan to US$1.37 million). The new facility is repayable by 31 December
2019 and the incremental funds were received by the Company on 5 July
2017.
The Directors consider that the Group's operations are performing at the
levels that they anticipate, but the Group remains a small scale gold
producer with limited cash resources to support any unplanned
interruption or reduction in gold production, unforeseen reductions in
the gold price, or appreciation of the Brazilian currency, all of which
could adversely affect the level of free cash flow that the Group can
generate on a monthly basis. In the event that the Group is unable to
generate sufficient free cash flow to meet its financial obligations as
they fall due, or to allow it to finance exploration and development
activity on its other gold properties, additional sources of finance may
be required. Should additional working capital be required the
Directors consider that further sources of finance could be secured
within the required timescale.
On this basis, the Directors have therefore concluded that it is
appropriate to prepare the financial statements on a going concern
basis. However, there is no certainty that such additional funds either
for working capital or for future development will be forthcoming and
these conditions indicate the existence of a material uncertainty, which
may cast significant doubt over the Group's ability to continue as a
going concern and, therefore, that it may be unable to realise its
assets and discharge its liabilities in the normal course of business.
The condensed consolidated financial statements do not include the
adjustments that would result if the Group was unable to continue as a
going concern.
(ii) Use of estimates and judgements
There have been no material revisions to the nature and amount of
changes in estimates of amounts reported in the 2016 annual financial
statements.
(iii) Impairment
At each balance sheet date, the Group reviews the carrying amounts of
its property, plant and equipment and intangible assets to determine
whether there is any indication that those assets have suffered
impairment. Prior to carrying out of impairment reviews, the significant
cash generating units are assessed to determine whether they should be
reviewed under the requirements of IFRS 6 - Exploration for and
Evaluation of Mineral Resources or IAS 36 - Impairment of Assets. Such
determination is by reference to the stage of development of the project
and the level of reliability and surety of information used in
calculating value in use or fair value less costs to sell. Impairment
reviews performed under IFRS 6 are carried out on a project by project
basis, with each project representing a potential single cash generating
unit. An impairment review is undertaken when indicators of impairment
arise; typically when one of the following circumstances applies:
(i) sufficient data exists that render the resource
uneconomic and unlikely to be developed
(ii) title to the asset is compromised
(iii) budgeted or planned expenditure is not expected in the
foreseeable future
(iv) insufficient discovery of commercially viable resources
leading to the discontinuation of activities
Impairment reviews performed under IAS 36 are carried out when there is
an indication that the carrying value may be impaired. Such key
indicators (though not exhaustive) to the industry include:
(i) a significant deterioration in the spot price of gold
(ii) a significant increase in production costs
(iii) a significant revision to, and reduction in, the life of
mine plan
If any indication of impairment exists, the recoverable amount of the
asset is estimated, being the higher of fair value less costs to sell
and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money
and the risks specific to the asset for which the estimates of future
cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is
estimated to be less than its carrying amount, the carrying amount of
the asset (or cash-generating unit) is reduced to its recoverable
amount. Such impairment losses are recognised in profit or loss for the
year.
Where an impairment loss subsequently reverses, the carrying amount of
the asset (or cash-generating unit) is increased to the revised estimate
of its recoverable amount, but so that the increased carrying amount
does not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset (or cash-generating
unit) in prior years. A reversal of an impairment loss is recognised in
profit or loss for the year.
3. Earnings per share
3 months ended 30 September 9 months ended 30 September
3 months ended 30 September 2017 2016 9 months ended 30 September 2017 2016
US$ US$ US$ US$
(unaudited) (unaudited) (unaudited) (unaudited)
Profit / (loss) attributable to ordinary shareholders
(US$) 235,051 465,480 (770,629) 1,471,662
Weighted average ordinary shares in issue 698,701,772 678,005,407 698,701,772 663,647,199
Basic profit/ (loss) per share (US cents) 0.03 0.07 (0.11) 0.22
Diluted ordinary shares in issue (1) 748,461,772 727,915,407 698,701,772 713,557,199
Diluted profit / (loss) per share (US cents) 0.03 0.06 (0.11)(2) 0.21
1. Assumes exercise of all options and warrants outstanding as of that date
where the Group has reported a profit for the period.
2. As the effect of dilution is to reduce the loss per share, the diluted
loss per share is considered to be the same as the basic loss per share.
4. Post balance sheet events
On 13 November 2017, Serabi signed a conditional acquisition agreement
to acquire 100 per cent. of the issued share capital and inter-company
debt of Chapleau Resources Ltd ("Chapleau"), a Canadian registered
company wholly-owned by Anfield Gold Corp ("Anfield"), which holds the
Coringa gold project ("Coringa") located in the Tapajos gold province in
Para, Brazil.
Serabi will acquire the entire issued share capital of Chapleau together
with its outstanding inter-company debts owed to Anfield. Serabi will
make an initial payment to Anfield on closing of the transaction
("Closing") of US$5 million in cash from existing resources. A further
US$5 million in cash is payable within three months of Closing. A final
payment of US$12 million in cash will be due upon the earlier of either
the first gold being produced or 24 months from the date of Closing. The
total proposed consideration for the acquisition amounts to US$22
million in aggregate.
The Agreement is conditional on a number of items including:
-- Completion by Serabi of its due diligence, including the receipt of
satisfactory legal opinions as to mining title, labour, environmental and
tax matters;
-- Approval of the shareholders of Anfield and approval of the TSX-V; and
-- Approval of Serabi's secured lender (Sprott).
Pursuant to the Agreement, Anfield has provided Serabi with certain
indemnities in respect of future claims relating to activities prior to
Closing, including labour and tax liabilities. In addition, the
Agreement includes representations and warranties from Anfield in favour
of Serabi as would be customary for a transaction of this nature both on
execution of the Agreement and at Closing.
Serabi has agreed, on Closing, to grant to Anfield, subject to the
approval of Serabi's secured lender and, if required, sub-ordinated to
any security granted by Serabi to its secured lender, a pledge over the
shares of Chapleau as security for the full and irrevocable payment of
the Deferred Consideration.
Anfield proposes to hold its shareholder meeting to approve the proposed
transaction on 19 December 2017, and Closing is anticipated to occur
shortly thereafter.
Chapleau is not required to prepare audited financial statements. Based
on information provided by Anfield and extracted from the unaudited
consolidated financial statements of Anfield to 31 December 2016,
Chapleau on a consolidated basis, reported a loss before taxation of
C$22.3 million for the 12 month period ended 31 December 2016 after (i)
expensing exploration and evaluation expenditure of C$7.9 million, (ii)
recognising a foreign exchange loss of the capitalisation of intergroup
loans into shares of Chapleau Brazil of C$13.7 million, and (iii) other
one-off costs estimated at C$1.3 million. Chapleau had no revenues. As
at 30 June 2017 total assets and shareholders' equity amounted to C$19.6
million and C$(20.3 million) respectively, with shareholder loans
totalling C$38.6 million. The balance sheet carrying value of property,
plant and equipment associated with the Coringa project as at 30 June
2017 amounted to C$16.6 million which excludes past exploration costs as
these have been expensed. As at 30 June 2017 Chapleau had net cash and
cash equivalents of C$2.5 million and except for intercompany loans
(amounting to C$38.6 million), which will be assigned to Serabi on
Closing, had no borrowings.
Enquiries:
Serabi Gold plc
Michael Hodgson Tel: +44 (0)20 7246 6830
Chief Executive Mobile: +44 (0)7799 473621
Clive Line Tel: +44 (0)20 7246 6830
Finance Director Mobile: +44 (0)7710 151692
Email: contact@serabigold.com
Website: www.serabigold.com
Beaumont Cornish Limited
Nominated Adviser and Financial Adviser
Roland Cornish Tel: +44 (0)20 7628 3396
Michael Cornish Tel: +44 (0)20 7628 3396
Peel Hunt LLP
UK Broker
Ross Allister Tel: +44 (0)20 7418 9000
Chris Burrows Tel: +44 (0)20 7418 9000
Blytheweigh
Public Relations
Tim Blythe Tel: +44 (0)20 7138 3204
Camilla Horsfall Tel: +44 (0)20 7138 3224
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.
The Company will, in compliance with Canadian regulatory requirements,
post the Unaudited Interim Financial Statements and the Management
Discussion and Analysis for the three and nine-month periods ended 31
September 2017 on SEDAR at www.sedar.com. These documents will also
available from the Company's website - www.serabigold.com.
Serabi's Directors Report and Financial Statements for the year ended 31
December 2016 together the Chairman's Statement and the Management
Discussion and Analysis, are available from the Company's website -
www.serabigold.com and on SEDAR at www.sedar.com.
This announcement is inside information for the purposes of Article 7 of
Regulation 596/2014.
GLOSSARY OF TERMS
The following is a glossary of technical terms:
"Au" means gold.
"assay" in economic geology, means to analyse 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.
"doré - a semi-pure alloy of gold silver and other metals produced
by the smelting process at a mine that will be subject to further
refining.
"DNPM" is the Departamento Nacional de ProduĂ§Ă£o Mineral.
"grade" is the concentration of mineral within the host rock typically
quoted as grams 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
http://www.serabigold.com
(END) Dow Jones Newswires
November 14, 2017 02:00 ET (07:00 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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