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            31 August 2018

Serabi Gold plc
("Serabi" or the "Company")

Step out drilling at Palito continues to extend mining potential to the south

Serabi Gold plc ((AIM:SRB, TSX:SBI), the Brazilian-focused gold mining and development company, is pleased to announce the results from its ongoing exploration programmes being undertaken at its operations in the Tapajos.  

Highlights

  • Serabi is undertaking a systematic step-out drill programme along the Palito trend.  The drilling is focused on a series of closely spaced drill traverses south of Palito towards the Currutela Prospect.    
  • Drilling to date has returned multiple high-grade gold intersections from a newly discovered pay shoot, on the G3 vein, located 200 metres to the south of the current mine workings. 
  • The newly identified, high grade intersections (see Table 2 below) include:
    • 2.0 metres at 29.82 grammes per tonne ("g/t") gold ("Au") from 337.85m (PDD0557) including 1.3m at 44.75 g/t Au
    • 1.5m @ 8.08 g/t Au from 371.7m (PDD0534) including 0.89m at 12.88 g/t Au.
    • 0.65m @ 3.87 g/t Au from 290.83m (PDD0556)
    • 2.0m @ 33.76 g/t Au from 76.75m (PDD0558) including 1.0m at 64.63 g/t Au
  • The results continue to suggest that the Palito orebody has the potential to extend south into the Currutela Prospect, which would open up an overall southerly strike of three kilometres.

                         

Mike Hodgson, CEO of Serabi, commented:

"I am delighted to announce these positive results from our ongoing exploration programmes.  The results, which include multiple, newly identified, high grade gold intersections on the G3 ore zone, indicate this vein's further continuity.  The vein is now established over a one and a half kilometre strike length, and this recent drilling indicates the vein remains open to the south and reinforces our belief that the Palito orebody will ultimately extend and be continuous with the Currutela Prospect. Additionally, the success of this exploration drilling has helped to identify the longer term production potential of the Palito Complex.

"On the Sao Chico orebody we have concentrated on drilling the geophysical anomalies identified in 2016, and have intersected mineable grade and widths, which suggest a parallel ore zone. Drilling is continuing there.  

"These ongoing drill programmes on both the Palito and Sao Chico orebodies are focussing on strike extensions of the main veins and are designed to provide the Company with organic growth opportunities. Serabi is also carrying out wider, regional exploration activities including both airborne and ground-based geophysical surveys and soil geochemical sampling.

"I look forward to updating the market on the continued progress of our exploration programmes in due course."

PALITO OREBODY

The recent exploration drilling conducted at the Palito Operations has returned multiple high-grade gold intersections from a newly discovered pay shoot, on the G3 vein, located 200 metres to the south of the current Palito underground workings and only 800 metres from the northern limits of the Currutela Prospect.

These intersections reinforce the Company's belief that the Palito orebody continues into the Currutela Prospect, where positive exploration results were reported from a drilling campaign conducted during 2011 and completed early in 2012.  Both the new results and the historic results suggest the multiple veins of the Palito orebody continue south towards the multi-vein Currutela Prospect.

The new intersections returned along the G3 Structural Zone from the latest drilling campaign (further details of which are set out in Table 2 below) include;

  • 2.0m @ 29.82 g/t Au and 1.2% Cu from 337.85m (PDD0557) including 1.3m @ 44.75 g/t Au
  • 1.5m @ 8.08 g/t Au from 371.7m (PDD0534) including 0.89m @ 12.88 g/t Au.
  • 0.65m @ 3.87 g/t Au from 290.83m (PDD0556)
  • 2.0m @ 33.76 g/t Au from 76.75m (PDD0558) including 1.0m @ 64.63 g/t Au

These drill-holes formed part of a systematic step-out drill programme along the strike projection of the G3 structure south of the Palito Mine. The drill campaign has also been testing the strike projection of a number of the key lode structures being mined at Palito, including the Pipocas and Mogno veins as well as the G3 vein.

The Company has always felt there was strong potential for the continuity of the Palito ore zones to the Currutela prospect.  Currutela was discovered in 2011 and the prospect itself covers an approximate strike length of one kilometre.  Its northern most extent lies approximately one kilometre from southernmost point of the current Palito Mine, and during 2011-2012 broadly spaced drilling into the Currutela prospect and intermediate area towards the Palito Mine returned numerous significant intersections which are set out in Table 1 below:

Table 1: Currutela significant historic assay results, as previously reported in 2011 / 2012

Hole East North RL Depth Dip/Azm From To Width Au g/t Cu %
  (UTM) (UTM) (UTM) (m)   (m) (m) (m)    
                     
PDD0464 635621.41 9300232.7 235.18 251 -59/208 65.41 66.86 1.45 0.4 NA
            184.66 185.42 0.76 5.3 NA
            226.35 227.21 0.86 0.74 NA
PDD0465 635799.24 9300176.26 216.43 300 -48/024 208.54 210.68 2.14 12.92 NA
          Including 208.54 209.54 1 25.6 NA
PDD0466 635853.56 9300262.83 253.26 275.1 -50/030 182.99 183.58 0.59 1.35 NA
PDD0467 635534.93 9300085.46 202.97 253.75 -51/211 100.03 101.23 1.2 1.84 NA
            127.08 127.58 0.5 0.72 NA
            166 166.88 0.88 1.23 NA
PDD0468 635422.54 9300311.02 248.3 352.45 -51/208 284.32 285.25 0.93 1.01 NA
PDD0469 635330.3 9300138.32 213.37 250.5 -58/27 209.07 210.27 1.2 6.39 NA
            216.76 217.61 0.85 1.66 NA
PDD0471 635274.69 9300049.93 188.36 154.7 -59/26 39.21 40.21 1 0.5 NA
            55.85 56.88 1.03 5.1 NA
PDD0472 635455.74 9299954.89 186.81 243 -60/30 No significant Assays   
PDD0470 634661.32 9300795.13 201.01 145.55 -49/217 84.25 85.01 0.76 1.14 NA
            89.5 93.82 4.32 1.58 NA
          Including 90.98 91.86 0.88 5.25 NA
            97.78 101.31 3.53 2.89 NA
          Including 100.7 101.31 0.61 10.9 NA
PDD0519 634410 9300977 204 126.3 -64/211 96.39 97.11 0.72 8.91 0.76
PDD0520 634367 9300979 209 124.85 -69/211 No significant Assays  
PDD0521 634367 9300980 209 75.1 -58/208 No significant Assays  
PDD0522 634300 9301054 224 150.1 -64/210 100.25 100.75 0.5 0.87 0
            104.86 105.76 0.9 21.60 4.63
PDD0523 634270 9301072 223 105.3 -49/210 71.21 72.57 1.36 43.24 2.92
          Including 72 72.57 0.57 90.90 6.51
PDD0524 634270 9301073 223 150 -68/211 No significant Assays  
PDD0525 634339 9300992 215 84.8 -48/225 37.94 38.57 0.63 1.52 0.01
            72.45 73.45 1 1.02 0.00
            76.26 77.26 1 2.18 0.01
PDD0526 634339 9301001 215 120.5 -69/211 66.15 68.01 1.86 5.22 0.15
          Including 66.15 66.96 0.81 8.79 0.26

Notes:

  1. Holes PDD0464 – PDD0466: As announced on 13 June 2011.
  2. Holes PDD0467 – PDD0472: As announced on 11 July 2011.
  3. Hole PDD0470: As announced on 15 July 2011,
  4. Holes PDD0464 – PDD0472: Assay intercepts calculated based on a minimum weighted average grade of 0.5g/t Au using a 0.5g/t Au weighted average lower cut and a maximum internal waste interval of 1.2m. All assays were completed by EcoTech Laboratory using 30gm Fire Assay charge with an AAS analysis.
  5. Holes PDD0519 – PDD0526: As announced on 24 January 2012. Reported intercepts calculated based on a minimum weighted average grade of 0.5g/t Au using a 0.5g/t Au weighted average lower cut and a maximum internal waste interval of 1.2m based on ALS reported analyses. All assays completed by ALS used a 30gm Fire Assay charge with an AAS analysis.  Where initial Au results exceed 10g/t, analysis is done with a gravimetric charge. 

Despite the success of the 2011/12 drilling campaign, the Company has only now been in a position to follow up, and recent drilling has focused on a series of closer spaced drill traverses between Palito and Currutela. 

On the Pipocas Vein a series of new drill traverses have been completed on strike projections of the vein.   The results demonstrate that the vein structure has strong lateral continuity to the northwest, with multiple intersections having been reported.  Mine development will now be undertaken along this strike extension.

Drilling of the Palito orebody and its potential extensions is continuing with further extension targets currently being pursued on the G3 plunge position and the Mogno Vein north-western strike position. Further drilling over the discoveries at the Piaui and Currutela prospects is also scheduled for later in the year.

The Palito trend has now been traced over a distance of approximately four kilometres extending from the Copper Hill discovery located to the north of to the southernmost extent of the Currutela prospect.

SAO CHICO OREBODY

At the Sao Chico orebody, exploration drilling commenced in mid May 2018.  Drilling at Sao Chico is focussing on strike extensions of the Main Vein and potential parallel targets identified as geophysical induced polarisation ("IP") anomalies in 2016.

Drilling is underway on the first of these anomalies, the Crossroads anomaly, and the initial drill holes have intersected promising sulphide and vein intersections. Whilst assay results on all holes completed to date are being awaited, initial results include an intersection of 1.35m at 12.02 g/t Au from 178.80m (18-SC-109) as set out in Table 3 below.

REGIONAL EXPLORATION ACTIVITY

Regional exploration activity has been undertaken in the form of both airborne and ground-based geophysical surveys.  A 4,343 line-kilometre HeliTEM survey was completed in late July covering the balance of the Jardim do Ouro tenements (approximately 25,000 hectares) that were not covered in the 2008 and 2011 surveys. The Company expects the contractor to release the final collated survey data during September, following which Serabi will be able to work with its consultants on the interpretations.

A ground-based IP programme is also underway over the strike extensions of the Sao Chico orebody following the line-of-lode and extended to cover the five kilometre strike length of the structure.

Serabi has also completed, during August, a regional soil geochemical sampling programme over a number of previously identified geophysical and structural targets. Geochemical analyses of the samples are pending at this time.

Intercepts from the current drill program to date include:

Table 2: Palito new significant assay results:

Hole East North RL Depth Dip/Azm From To Width Assay
  (UTM- SAD69) (UTM- SAD69) (UTM- SAD69) (m) (°/°UTM)  (m) (m) (m) Au g/t
PDD0527 633945.0050 9300850.0080 213.2490 300.50 -59.8/359.35 75.15 76 0.85 0.52
PDD0528 633706.6360 9301036.9460 234.6480 301.30 -65.7/40.45 12.05 12.8 0.75 0.73
            76.2 76.8 0.60 0.58
            93.5 95.3 1.80 0.57
            141.7 142.35 0.65 0.62
            165.8 166.8 1.00 1.47
PDD0529 633706.2440 9301036.3330 234.7480 251.45 -51.6/37.85 45.8 46.9 1.10 1.61
PDD0530 633767.7270 9301000.6390 227.5210 325.75 -64.7/40.65 141.15 141.55 0.40 0.75
            227.75 228.25 0.50 0.99
PDD0531 633276.6620 9301308.9040 300.6420 356.40 -55.9/28.05 123.45 125.15 1.70 0.68
            125.9 126.5 0.60 2.09
            135.45 135.95 0.50 0.93
            142.55 143.05 0.50 0.55
            280.25 280.75 0.50 1.52
            318.4 319.1 0.70 1.26
            319.5 320.05 0.55 0.57
PDD0532 634530.7150 9300982.2120 204.5810 289.58 -60.7/212.85 No significant assays
PDD0533 634560.3780 9301040.8180 219.4220 400.01 -61.1/208.55 80.7 81.2 0.50 1.39
            179.15 179.95 0.80 1.86
PDD0534 634661.4860 9301003.3270 215.2560 409.07 -57.2/211.75 124.15 124.65 0.50 2.06
            199.25 199.95 0.70 1.46
            371.7 373.2 1.50 8.08
          Including     0.89 12.88
PDD0535 633282.1400 9301430.3370 293.9290 297.15 -70.8/27.35 No significant assays
PDD0536 634637.7130 9300950.3820 204.2600 334.74 -52.6/211.35 No significant assays
PDD0537 633474.9960 9301537.4910 307.1200 265.18 -47.9/226.45 157.9 158.5 0.60 0.58
PDD0538 633455.5080 9301500.8080 307.7980 187.23 -49.8/229.15 No significant assays
PDD0539 633404.8920 9301606.0700 294.4720 242.62 -55.6/219.85 54.8 56.7 1.90 0.60
            100.15 101.25 1.10 2.93
PDD0540 633404.5360 9301605.6020 294.2160 211.21 -47.2/215.95 79.45 80.75 1.30 0.98
            91.15 92.15 1.00 1.86
            114.4 114.9 0.50 1.06
PDD0541 633351.9960 9301564.9640 292.4180 163.96 -54.9/216.35 33.75 34.25 0.50 1.00
            77.85 79.35 1.50 0.73
            110.8 111.5 0.70 0.72
PDD0542 633285.0970 9301624.9590 272.3340 130.43 -52/216.15 106 106.5 0.50 0.76
PDD0543 633189.8890 9301466.7050 276.0570 286.36 -60.8/31.95 8.1 10.1 2.00 1.66
PDD0544 633306.1710 9301643.8590 271.1530 201.51 -50.6/221.55 71.7 72.2 0.50 1.67
PDD0545 633330.0230 9301662.2590 271.1810 229.17 -53.7/221.25 137.7 138.2 0.50 0.83
            155.5 156 0.50 1.00
            188.55 189.05 0.50 1.37
            213.76 214.65 0.89 2.64
PDD0546 632660.0200 9301724.9960 238.3410 250.12 -56.6/234.85 No significant assays
PDD0547 634424.7080 9300803.0800 209.0940 180.99 -51.2/30.15 No significant assays
PDD0548 634514.0490 9300784.8940 207.7630 206.49 -52/32.35 No significant assays
PDD0549 634210.001 9300865.997 205.854 406.86 -57.5/13.15 350.55 351.15 0.60 0.65
PDD0550 634213.517 9300863.37 205.908 425.57 -58.4/63.05 115.2 116.35 1.15 0.90
PDD0551 634242.204 9300918.394 205.9 309.11 -66.3/28.95 No significant assays
PDD0552 634444.898 9301035.018 219.87 346.67 -65/210.15 No significant assays
PDD0553 634443.911 9300627.825 223.588 175.06 -55.4/212.55 No significant assays
PDD0554 634378.645 9301395.185 239.781 245.88 -49.5/216.15 133.55 134.2 0.65 2.50
            143.55 144.36 0.81 1.06
            208.03 208.53 0.50 0.69
PDD0555 633943.042 9300850.557 212.74 293 -58.3/60.55 95.5 96.3 0.80 0.87
PDD0556 634055.783 9301031.973 210.818 347.95 -56.2/71.95 290.83 291.66 0.83 3.87
PDD0557 634638.068 9300950.663 204.39 381.44 -59.6/202.75 184.5 185.5 1.00 0.90
            337.85 339.85 2.00 29.82
          Including     1.30 44.75
PDD0558 634529.889 9300983.071 204.847 383.65 -64.8/190.55 76.75 78.75 2.00 33.76
          Including     1.00 64.63
            351 352 1.00 0.58
PDD0559 634374.26 9301398.41 238.01 312.23 -61.4/216.45 175.5 176.05 0.55 2.53
            179.45 180.84 1.39 1.33
            181.85 182.85 1.00 0.65

Note: Reported intercepts are calculated based on a minimum weighted average grade of 0.5g/t Au using a 0.5g/t Au weighted average lower cut and a maximum internal waste interval of 1.2m based on SGS reported analyses. All assays were completed by SGS Geosol Laboratory using a 30gm Fire Assay charge with an AAS analysis.

Table 3: Sao Chico new significant assay results:

Hole East North RL Depth Dip/Azm From To Width Assay
  (UTM- WGS84) (UTM- WGS84) (UTM- WGS84) (m) (°/°UTM)  (m) (m) (m) Au g/t
18-SC-109 613898.445 9290149.907 301.381 242.95 -69.7/210 178.8 180.15 1.35 12.02
18-SC-110 613944.424 9290154.485 295.322 250.40 -60.4/210 No significant assays
18-SC-111 613973.772 9290118.760 300.516 284.40 -57.38/210 No significant assays
18-SC-112 613991.042 9290149.353 292.391 300.00 -58.8/210 No significant assays
18-SC-113 614045.162 9290070.105 309821 251.20 -65/210 No significant assays
18-SC-114 614024.829 9290099.923 305.538 275.05 -59.86/210 No significant assays
18-SC-115 614079.971 9290599.968 226.029 215.10 -64.77/200 176.05 177.10 1.05 0.52
            203.15 203.65 0.50 1.28

Note: Reported intercepts are calculated based on a minimum weighted average grade of 0.5g/t Au using a 0.5g/t Au weighted average lower cut and a maximum internal waste interval of 1.2m based on ALS reported analyses. .All assays were completed by ALS Laboratory using a 50gm Fire Assay charge with an AAS analysis, where initial Au results exceed 10g/t, analyses is done on a gravimetric charge.

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:

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 8900
James Bavister Tel: +44 (0)20 7418 8900
   
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.

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

"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

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