Announcement of Interim Financial Results for the 6 months to 30 June 2010

PRESS RELEASE - 15  September 2010

SERABI MINING plc ("Serabi" or "the Company")

Announcement of Interim Financial Results for the 6 months to 30 June 2010


Highlights

* Eldorado Gold subscribed for 120,000,000 new shares at 3 pence in June 2010
and have taken a 26.8% interest in the Company

* The IP survey undertaken in first half of the year has yielded nine drill
targets - a better than expected result

* Cash balances at the end of the period were US$7.2 million




   Overview
   2010 has so far been a year of relative success, with the identification of
nine drill targets at Palito and the completion of a share subscription by
senior Canadian based gold mining company Eldorado Gold Corporation
("Eldorado").

   Exploration undertaken in the first half of the year yielded better than
expected results, with activity comprising follow-up ground geophysics based on
the first twelve of eighteen anomalies identified in the 2008 airborne
geophysical survey.  Based on these and other exploration results we are now
planning a discovery drill programme that could potentially confirm the presence
of additional resources in close proximity to the Palito mine.  We believe that
this could form the basis for achieving our objective of establishing a minimum
1.5 million ounce resource in the area.

   Following a subscription agreement that was announced on 16 June 2010,
Eldorado acquired 120,000,000 shares in Serabi, which equates to a 26.8%
interest in the Company.  The gross proceeds were £3.6 million, equivalent at
the time to approximately US$5.4 million.  Eldorado has also recently completed
the acquisition of our near neighbour in the Tapajos, TSX listed Brazauro
Resources Corp for a consideration of approximately C$120 million.  As a result
of this transaction Eldorado has acquired a 100% interest in the Tocantinzinho
project which is located only 70 kilometres to the north-west of Palito.
 Eldorado has subsequently announced that it will be undertaking a
pre-feasibility study ("PFS") on the project which it hopes to complete during
Q4, 2010 and that, subject to the outcome of the PFS and the necessary
permitting applications, it hopes to be in a position to complete a Feasibility
Study by mid-2011 and make a construction decision prior to the end of 2011.  We
view all of this as very positive for the Tapajos region and its development and
hope that with its strategic position at the eastern edges of the Tapajos,
Serabi will be well placed to benefit from the improvements that the future
potential development of the Tocantinzinho project could be expected to bring to
the area.

   The financial results for the first six months ended 30 June 2010 ("the
Period"), show an operating loss for the Serabi Group of US$2,260,134, of which
US$1,017,458 relates to depreciation charges.  This compares with an operating
loss for the equivalent period in 2009 of US$4.44 million and a loss for the 12
month period to 31 December 2009 of US$9.76 million.  A total of 1,052 ounces of
gold were sold during the period generating revenues of US$1.15 million.

   Reflecting the increased activity in exploration and in particular the ground
geophysical surveys undertaken at Palito during the second quarter, exploration
charges recorded were US$799,564.  These costs have been capitalised and are
reflected in the Balance Sheet.

   The share subscription by Eldorado has strengthened the working capital
position of the Serabi Group which at the Period end, had cash holdings of
US$7.2 million.

   Tapajos Strategy
   As previously stated, in light of our experience at Palito, we believe that
it would be risky and therefore unwise to re-establish underground mining
operations at Palito until such time that we are confident that a more
substantial resource can be identified, thus underpinning production rates
required to support a larger and sustainable operation.  We consider that such
an operation needs to be of the order of 70,000 ounces per annum but as with all
mines, ultimately the production rate will be determined by the reserves and
resources identified.  Whilst there is clearly a desire from shareholders to use
operational cash flows to fund capital needs whenever possible, the decision to
go into production with any operation must be made on the basis of a solid
reserve and resource and a long term mine development and production plan.  Our
planned exploration programme over the next 18 months is therefore targeted to
establish just that.

   Exploration Programme
   Our exploration programme during the first half of 2010 comprised ground
based follow-up work to the aerial electro-magnetic VTEM survey of 2008. The
term 'Head-frame Exploration' is often used in the mining industry, to describe
exploration focused in and around existing mining areas and related
infrastructure.  Such a strategy seeks to discover similar additional
mineralised ore deposits in close proximity, whilst any discoveries made and
resources and reserves defined can also ultimately take advantage of such
infrastructure once production commences.  With this in mind Serabi flew the
original airborne geophysical survey in 2008, and the results of this survey
have formed the basis of our recent exploration.

   The majority of this activity to date has consisted of undertaking ground
Induced Polarisation ("IP") surveys over a number of the anomalies that the VTEM
work had identified.  The purpose of these surveys was to better define the
anomalies, with the view to either justify drilling, or discard the less
interesting ones.

   Our objective and hope was that out of the 18 VTEM anomalies we would
eventually identify at least two "Palito look-a-like" deposits, with minimum
gold resources of approximately 500,000 ounces each.  We are therefore very
encouraged that the initial IP programme has identified nine drill targets from
the first twelve of the VTEM anomalies surveyed and believe that this success
rate has improved the prospects of discovering these two new deposits.  It is
also worth noting that all of these drill targets are less than 3 kilometres
from the existing plant and infrastructure, comfortably within viable haulage
distance.  Furthermore, a number of the targets are located within the existing
mining lease, which should eliminate or at least simplify, the need for
additional permitting required in the event of any production decision.

   Based on these results, we are now preparing to begin a 7,500 metre discovery
drill programme over the nine identified targets.  This programme is intended to
establish if the anomalies are sufficiently gold mineralised to justify further
drilling in 2011.  Any subsequent programmes would be for resource definition
drilling to establish the size and continuity of identified mineralised
structures.

   Concurrently, we plan to undertake further IP surveys over the remaining VTEM
anomalies not yet tested and, dependent on results, would then undertake a
similar programme of drilling over those anomalies that warrant further
evaluation.  Clearly we need to keep the exploration programme flexible.  In the
event of initial success, we may consider re-prioritising the programme in order
to accelerate the resource definition drilling phase on any early discoveries.
 Shareholders should be aware that we consider each anomaly to be mutually
exclusive; success or failure in the discovery drilling phase of one anomaly is
by no means indicative of the outcome of the drilling of another anomaly.  It is
important to note that geophysics, of which VTEM and IP are tools, is only an
indicator of the potential for mineralisation.  However, based on the knowledge
and experience previously gained from the Palito ore bodies, we are very
encouraged by these recent results.

   In the event that the current outlined programme is successful, we are also
evaluating other areas in the vicinity of Palito and the Jardim do Ouro district
where we might consider undertaking further airborne VTEM surveys.  Serabi has
exploration tenement holdings of almost 60,000 hectares in this area but our
recent activity has to-date focused on an area of only 6,000 hectares
immediately adjacent to Palito.  On the basis of our experience, we now consider
that it is possible that in this part of the Tapajos, VTEM can be used as a very
effective, low cost 'first-pass' technique to screen large areas, subsequently
deploying IP to follow-up the identified areas of interest.  Such an approach
provides a methodology that could rapidly unlock the potential to find new
deposits and establish further mining opportunities.

   IBAMA Suspension Notice
   As previously announced, surface oxide mining operations at Palito were
suspended following the issue of a notice by the Brazilian Federal Environmental
Agency, IBAMA (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais
Renovavais) in June of this year.  The oxide production was only ever expected
to be a breakeven venture and after more than eighteen months of such activity
it had become in any event increasingly difficult to identify further adequate
surface resources to justify continuous operations of this nature and at a time
when our priority has moved to exploration.  Ultimately the long term value and
growth of Serabi will be derived from exploration success and not small scale
oxide mining, which could otherwise become a major distraction of management
time.  The current suspension of oxide mining activity has facilitated the
transfer of personnel and equipment resources for exploration purposes. Oxide
ore processing in the future will only be undertaken on a campaign basis,  thus
running the plant when adequate stocks of ore were available.  We have also now
reduced and reconfigured the workforce to a more versatile team who can be used
in exploration, mining and processing as required.

   We have delayed the start of the initial discovery drill programme in the
light of the suspension notice.  Despite considerable efforts, IBAMA have not
yet provided formal confirmation that exploration activities are excluded by the
notice and we are therefore unwilling to risk further possible sanctions by
undertaking work that could be considered to be in breach of the IBAMA
suspension notice.  Notwithstanding this delay, the IBAMA suspension notice has
to date not had serious implications for our exploration activities.

   With respect to the suspension, we have made our submission to IBAMA
rebutting the alleged breaches of the operating licence and have made
representations to senior officials within the Mines Department and IBAMA in
Brasilia.  Whilst they are verbally supportive of Serabi's case, at this stage a
resolution rests with the IBAMA officials within Para state.  In the light of
the delays in obtaining any formal decision we have also lodged an injunction
with the courts in Para for the suspension notice to be lifted whilst the matter
is discussed and resolved between ourselves and IBAMA.  We are pressing the
court for a decision to be made as soon as possible.  There is no provision
within the law establishing specific time frames within which the defence must
be considered or within which a judge must rule on an application for an
injunction. We remain confident that the matter can be resolved satisfactorily.

   Taking account of developments during 2010 so far, we believe that the
drilling programme can soon be started and are hopeful that the potential
exploration success will mark a new, positive and exciting chapter in Serabi's
life.


Graham Roberts Mike Hodgson

Chairman Chief Executive

15 September 2010




Enquiries

Serabi Mining plc

Graham Roberts Tel: 01737 773691

Chairman Mobile: 07768 902475



Clive Line Tel: 020 7246 6830

Finance Director Mobile: 07710 151 692



Email:contact@serabimining.com

Website:  www.serabimining.com



Beaumont Cornish Limited
Nominated Adviser and Broker

Roland Cornish Tel: 020 7628 3396

Michael Cornish Tel: 020 7628 3396



Hybridan LLP
Broker

Claire Noyce Tel: 020 7947 4350



Farm Street Communications
Public Relations

Simon Robinson 07593 340107


Copies of this release and the interim Financial Statements are available from
the company's websitewww.serabimining.com.

STATEMENT OF COMPREHENSIVE INCOME

    Group
------------------------------------
    For the For the For the

    six months six months year

    ended ended ended

    30 June 30 June 31 December

    2010 2009 2009

(expressed in US$) Notes (unaudited) (unaudited) (audited)
--------------------------------------------------------------------------------
CONTINUING OPERATIONS

Revenue   1,148,999 3,601,349 5,512,804

Operating expenses   (1,494,386) (3,061,975) (5,755,002)
--------------------------------------------------------------------------------
Gross profit/(loss)   (345,387) 539,375 (242,198)

Administration expenses   (842,391) (1,178,935) (1,851,937)

Option costs   (50,204) (40,161) (147,038)

Write-off of past exploration costs   - - (495,138)

Increase in rehabilitation provision   - - (346,000)

Loss on asset disposals   (4,694) (209,661) (181,237)

Impairment 9 - (2,422,737) (4,343,048)

Depreciation of plant and equipment   (1,017,458) (1,126,106) (2,157,026)

Depreciation of mine asset   - -
--------------------------------------------------------------------------------
Operating loss   (2,260,134) (4,438,226) (9,763,622)

Foreign exchange gain   (272,573) 93,755 (14,533)

Finance costs   (60,579) (158,936) (215,916)

Investment income   5,103 1,481 3,569
--------------------------------------------------------------------------------
Loss before taxation   (2,588,183) (4,501,926) (9,990,502)

Income tax expense   - - -
--------------------------------------------------------------------------------
Loss for the period from continuing   (2,588,183) (4,501,926) (9,990,502)
operations (1) (2)



Other comprehensive income (net of
tax)

Exchange differences on translating   (1,237,968) 6,119,656 10,072,895
foreign operations
--------------------------------------------------------------------------------
Total comprehensive (loss)/income for   (3,826,151) 1,617,730 82,393
the period (2)
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Loss per ordinary share (basic and 3 (0.67c) (3.21c) (6.16c)
diluted) (1)
--------------------------------------------------------------------------------
(1) All revenue and expenses arise from continuing operations.
(2) The Group has no minority interests and all income / (losses) are
attributable to the equity holders of the Parent Company.

CONSOLIDATED BALANCE SHEET

    Group
---------------------------------------
    As at As at As at

    30 June 30 June 31 December

    2010 2009 2009

(expressed in US$) Notes (unaudited) (unaudited) (audited)
--------------------------------------------------------------------------------
Non-current assets

Development and deferred 4 7,475,863 6,225,795 6,880,038
exploration costs

Property, plant and equipment 5 33,024,475 34,445,949 35,327,788
--------------------------------------------------------------------------------
Total non-current assets   40,500,338 40.671,744 42,207,826
--------------------------------------------------------------------------------
Current assets

Inventories 6 1,180,385 1,005,956 1,259,764

Trade and other receivables   193,136 264,388 275,538

Prepayments and accrued income   1,552,439 1,089,099 1,413,158

Cash at bank and in hand 7 7,272,296 1,370,442 4,081,882
--------------------------------------------------------------------------------
Total current assets   10,198,256 3,729,885 7,030,342
--------------------------------------------------------------------------------
Current liabilities

Trade and other payables   4,137,435 3,254,544 4,170,712

Accruals   113,441 205,627 122,269

Interest bearing liabilities   - 150,200 80,499
--------------------------------------------------------------------------------
Total current liabilities   4,250,876 3,610,371 4,373,480
--------------------------------------------------------------------------------
Net current assets   5,947,380 119,514 2,656,862
--------------------------------------------------------------------------------
Total assets less current   46,447,718 40,791,258 44,864,688
liabilities
--------------------------------------------------------------------------------
Non-current liabilities

Trade and other payables   20,462 84,037 68,873

Provisions   1,363,516 784,788 1,374,200

Interest bearing liabilities   235,680 - 216,898
--------------------------------------------------------------------------------
Total non-current liabilities   1,619,658 868,825 1,659,971
--------------------------------------------------------------------------------
Net assets   44,828,060 39,922,433 43,204,717
--------------------------------------------------------------------------------


Equity

Called up share capital 8 27,752,834 25,285,679 26,848,814

Share premium reserve   40,754,032 33,402,649 36,268,991

Option reserve   1,583,877 3,101,256 1,523,444

Other Reserves   260,882 - 260,882

Translation reserve   1,031,189 (1,684,082) 2,269,157

Profit and loss account   (26,554,754) (20,183,069) (23,966,571)
--------------------------------------------------------------------------------
Equity shareholders' funds   44,828,060 39,922,433 43,204,717
--------------------------------------------------------------------------------
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 2009,
prepared under IFRS as adopted in the EU, have been filed with the Registrar of
Companies. The auditors' report on these accounts was unqualified but did
contain an Emphasis of Matter with respect the ability of the Company and the
Group to continue as a going concern.  The auditors' report did not contain a
statement under Section 498 (2) or 498 (3) of the Companies Act 2006.


CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(expressed in Share Share Share Other Translation Profit and
US$) option

(unaudited) capital premium reserve reserves reserve loss account Total equity
----------------------------------------------------------------------------------------------
Equity
shareholders' -
funds at 31 25,285,679 33,402,649 3,061,095 (7,803,738) (15,681,143) 38,264,542
December 2008
----------------------------------------------------------------------------------------------
Foreign
currency - - - - 6,119,656 - 6,119,656
adjustments

Loss for the - - - - - (4,501,926) (4,501,926)
period
----------------------------------------------------------------------------------------------
Total
comprehensive -
income  for - - - 6,119,656 (4,501,926) 1,617,730
the period

Share option - - 40,161 - - - 40,161
expense
----------------------------------------------------------------------------------------------
Equity
shareholders' -
funds at 30 25,285,679 33,402,649 3,101,256 (1,684,082) (20,183,069) 39,922,433
June 2009
----------------------------------------------------------------------------------------------
Foreign
currency - - - - 3,953,239 - 3,953,239
adjustments

Loss for the - - - - - (5,488,576) (5,488,576)
period
----------------------------------------------------------------------------------------------
Total
comprehensive - - 3,953,239 (5,488,576) (1,535,337)
income for - -
the period

Issue of new
ordinary 1,563,135 3,129,079 - - - - 4,692,214
shares

Costs
associated
with issue of - (262,737) - - - - (262,737)
new ordinary
shares

Equity
portion of - - - 260,882 - - 260,882
convertible
loan stock

Cancellation
of share - - (1,705,074) - - 1,705,074 -
options

Share option - - 127,262 - - - 127,262
expense
----------------------------------------------------------------------------------------------
Equity
shareholders' 26,848,814 36,268,991 1,523,444 260,882 2,269,157 (23,966,571) 43,204,717
funds at 31
December 2009
----------------------------------------------------------------------------------------------
Foreign
currency - - - - (1,237,968) - (1,237,968)
adjustments

Loss for the - - - - - (2,588,183) (2,613,242)
period
----------------------------------------------------------------------------------------------
Total
comprehensive - - (1,237,968) (2,588,183) (3,851,210))
income for - -
the period

Issue of new
ordinary 904,020 4,520,100 - - - - 5,424,120
shares

Costs
associated
with issue of - (35,059) - - - - (35,059)
new ordinary
shares

Share option - - 60,433 - - - 60,433
expense
----------------------------------------------------------------------------------------------
Equity
shareholders' 27,752,834 40,754,032 1,583,877 260,882 1,031,189 (26,554,754) 44,828,060
funds at 30
June 2010
----------------------------------------------------------------------------------------------



CONSOLIDATED STATEMENT OF CASH FLOWS

  Group
------------------------------------
  For the For the For the

  six months six months Year

  ended ended Ended

  30 June 30 June 31 December

  2010 2009 2009

(expressed in US$) (unaudited) (unaudited) (audited)
--------------------------------------------------------------------------------
Operating activities

Operating loss (2,260,134) (4,438,226) (9,763,622)

Depreciation - plant, equipment and mining 1,017,458 1,126,106 2,157,026
properties

Impairment charges - 2,422,737 4,343,048

Increase in rehabilitation provision - - 346,000

Loss on sale of assets 4,694 209,661 181,237

Option costs 50,204 40,161 167,423

Share based payment expense - - 334,987

Write-off of past exploration costs - - 495,138

Interest paid (41,798) (158,936) (215,916)

Foreign exchange (28,794) (90,224) (650,272)

Changes in working capital

  Decrease/(increase) in inventories 37,144 (151,299) 452

  (Increase)/decrease in receivables, (106,849) (32,621) 1,179,755
prepayments and accrued income

  Increase/decrease in payables, accruals 46,926 597,677 (96,684)
and provisions
--------------------------------------------------------------------------------
Net cash flow from operations (1,281,149) 111,853 (1,521,428)
--------------------------------------------------------------------------------


Investing activities

Proceeds from sale of fixed assets 155,806 903,017 1,220,691

Purchase of property, plant and equipment - (59,780) (74,578)

Exploration and development expenditure (789,335) (139,037) (620,490)

Interest received 5,103 1,481 3,569
--------------------------------------------------------------------------------
Net cash (outflow)/inflow on investing (628,426) 705,681 529,192
activities
--------------------------------------------------------------------------------


Financing activities

Issue of ordinary share capital 5,424,120 - 4,266,740

Capital element of finance lease payments (77,663) (1,057,638) (1,178,381)

Issue of convertible loan stock - - 477,780

Payment of share issue costs (35,059) - (172,250)
--------------------------------------------------------------------------------
Net cash inflow/(outflow) from financing 5,311,398 (1,057,638) 3,393,889
activities
--------------------------------------------------------------------------------


Net increase/(decrease) in cash and cash 3,401,823 (240,104) 2,401,653
equivalents

Cash and cash equivalents at beginning of 4,081,882 1,538,956 1,538,956
period

Exchange difference on cash (211,409) 71,590 141,273
--------------------------------------------------------------------------------
Cash and cash equivalents at end of period 7,272,296 1,370,442 4,081,882
--------------------------------------------------------------------------------



Notes to the Interim Financial Statements

1. Basis of preparation
These interim accounts are for the six month period ended 30 June 2010.
Comparative information has been provided for the unaudited six month period
ended 30 June 2009 and the audited twelve month period from 1 January to 31
December 2009.

The accounts for the period 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 2009 and those envisaged for the financial statement for the year
ended 31 December 2010:

* The financial statements are presented in US Dollars. They are prepared on
the historical cost basis or the fair value basis where the fair valuing of
relevant assets and liabilities has been applied.


* The financial statements have been prepared in accordance with International
Financial Reporting Standards in force at the reporting date and their
interpretations issued by the International Accounting Standards Board and
adopted for use within the European Union (IFRS), and those parts of the
Companies Act 2006 applicable to companies reporting under IFRS.


* The following new standards and amendments to standards are mandatory for
the first time for the financial year beginning 1 January 2010:


         IFRS 3 (revised) - Business combinations/consolidated and separate
financial statements - a revision to IFRS 3 effective from 1 July 2009 changed
the accounting for goodwill, the cost of business combinations, and the
methodology of accounting for business combinations that are undertaken on a
staged basis. During the period there have been no transactions that would be
subject to the provisions of this standard

* The following standards, amendments and interpretations to existing
standards are effective in 2010 but not relevant to the group:


         IFRIC 17, 'Distributions of non-cash assets to owners', effective for
annual periods beginning on or after 1 July 2009. This is not currently
applicable to the Group, as it has not made any non-cash distributions.

         IFRIC 18, 'Transfers of assets from customers', effective for transfer
of assets received on or after 1 July 2009. This is not relevant to the Group,
as it has not received any assets from customers.


* The Company 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.


(i)  Going Concern
In respect of the financial statements of the Company and the Group for the year
ended 31 December 2009 and which were approved by the Board on 27 May 2010, the
Directors, following a review of the Company's financial position and its
budgets and plans, concluded that sufficient financial resources would be
available to meet the Company's current and foreseeable working capital
requirements, this being a period of not less than twelve months from the date
of approval of those financial statements. On this basis, they considered it
appropriate to prepare those financial statements on the going concern basis.
The Directors consider that it remains appropriate to prepare the financial
statements for the period ended 30 June 2010 on the same going concern basis.
 However, they would anticipate that the Company will, prior to the end of a
twelve month period ending in September 2011, need to receive additional funds
to supplement its current cash holdings.   The level of such fund raising will
be determined primarily by the Board's view on the work programmes required to
continue the Group's exploration activity at the levels that they consider
appropriate.  The Group is pursuing plans under which it is seeking to secure
additional funding through a number of routes including a plan to secure a loan
from Superintendencia do Desenvolvimento da Amazonia ("SUDAM") a government body
responsible for assisting business development in the Amazon region of Brazil.
Although not all of these potential sources of funding are guaranteed and in
particular the potential loan from SUDAM remains subject to certain conditions
which the Group may not be able to fulfil, the Directors are confident that
additional equity or loan funding will be available as required and that there
remains sufficient flexibility in its plans to be able to restrict future
expenditure if needed.

(ii)  Impairment
The Directors have undertaken a review of the carrying value of the mining and
exploration assets of the Group, and considered the implications of the
operational difficulties experienced and the current operational status of
Palito. Following this review they have assessed the value of the existing
assets on the basis of value in use involving a future recommencement of
underground mining operations which is dependent on the ability of the Group to
raise future finance and to operate the mine in line with the mine plan that
forms the basis of the value in use calculation.The carrying values of assets
have not been adjusted to reflect a failure to raise sufficient funds, only
maintaining the current levels of operation or that if a sale transaction were
undertaken the proceeds may not realise the value as stated in the accounts.

(iii)  Inventories
Inventories  - are valued at the lower of cost and net realisable value.

(iv) Property, plant and equipment
Property, plant and equipment are depreciated over their useful lives.

 (v) Mining property
The Group commenced commercial production at the Palito mine effective 1 October
2006. Prior to this date all revenues and operating costs were capitalised as
part of the development costs of the mine. Effective from 1 October 2006 the
accumulated development costs of the mine were re-classified as Mining Property
costs and such cost is being amortised over the anticipated life of the mine on
a unit of production basis.  As the underground mine is currently on care and
maintenance and there is no depletion of the reserves and resources attributable
to the mine, no amortization charge has been recorded in the period.

 (vi) Revenue
Revenue represents amounts receivable in respect of sales of gold and
by-products. Revenue represents only sales for which contracts have been agreed
and for which the product has been delivered to the purchaser in the manner set
out in the contract. Revenue is stated net of any applicable sales taxes. Any
unsold production and in particular concentrate is held as inventory and valued
at production cost until sold.

2. Taxation
Taxation represents a provision for corporate taxes due on taxable profits
arising in Brazil. No deferred tax asset arising from carried forward losses
incurred outside of Brazil has been recognised in the financial statements
because of uncertainty as to the time period over which this asset may be
recovered.

3. Earnings per share
The calculation of the basic loss per share of 0.67 cents per share is based on
the loss attributable to ordinary shareholders of $2,588,183 and on the weighted
average number of ordinary shares in issue during the period of 337,685,346
ordinary shares.

4. Exploration and development costs
  30 June 31 December

  2010 2009

  (unaudited) (audited)
---------------------------------------------------------------------
Cost

Opening balance 6,880,038 5,251,921

Exploration and development expenditure 799,564 640,875

Write-off of past exploration costs - (495,138)

Exchange (203,739) 1,570,728

Transfer to tangible assets - (188,348)
---------------------------------------------------------------------
Balance at end of period 7,475,863 6,880,038
---------------------------------------------------------------------

5. Property, plant and equipment
  30 June 31 December

  2010 2009

  (unaudited) (audited)
-------------------------------------------------------------
Cost

Balance at beginning of period 48,566,891 38,295,092

Additions - 238,578

Transfer from intangible assets - 188,348

Exchange (1,460,599) 11,564,549

Disposals (211,261) (1,764,676)
-------------------------------------------------------------
Balance at end of period 46,895,031 48,566,891
-------------------------------------------------------------


Depreciation

Balance at beginning of period 13,239,103 6,674,728

Charge for period 1,017,458 2,157,026

Impairment charge - 2,590,532

Exchange (335,245) 2,380,893

Eliminated on sale of asset (50,760) (564,076)
-------------------------------------------------------------
Balance at end of period 13,870,556 13,239,103
-------------------------------------------------------------
Net book value at 30 June 2010 33,024,475 35,327,788
-------------------------------------------------------------

6. Inventories
  30 June 30 June 31 December

  2010 2009 2009

  (unaudited) (unaudited) (audited)
-------------------------------------------------------
Consumables 1,180,385 1,005,956 1,259,764
-------------------------------------------------------
Inventories 1,180,385 1,005,956 1,259,764
-------------------------------------------------------

7. Cash and cash equivalents
  30 June 30 June 31 December

  2010 2009 2009

  (unaudited) (unaudited) (audited)
---------------------------------------------------------------------
Cash at bank and in hand 7,272,296 1,370,442 4,081,882
---------------------------------------------------------------------
Cash and cash equivalents 7,272,296 1,370,442 4,081,882
---------------------------------------------------------------------

8. Share capital
  30 June 30 June 31 December 31 December

  2010 2010 2009 2009

  (unaudited) (unaudited) (audited) (audited)

Ordinary Shares Number $ Number $
-------------------------------------------------------------------------
Opening balance 327,740,595 2,827,419 140,139,065 25,285,679

Sub-division of shares - - - (24,021,395)

Issue of shares for cash 120,000,000 904,020 187,601,530 1,563,135
-------------------------------------------------------------------------
Balance at end of period 447,740,595 3,731,439 327,740,595 2,827,419
-------------------------------------------------------------------------

  30 June 30 June 31 December 31 December

  2010 2010 2009 2009

  (unaudited) (unaudited) (audited) (audited)

Deferred Shares Number $ Number $
------------------------------------------------------------------------
Opening balance 140,139,065 24,021,395 - -

Sub-division of shares - - 140,139,065 24,021,395
------------------------------------------------------------------------
Balance at end of period 140,139,065 24,021,395 140,139,065 24,021,395
------------------------------------------------------------------------
9. Impairment
Consistent with the review process performed as at 31 December 2009, the
Directors have undertaken an impairment review of the Group's exploration,
development and production assets.  The Directors note that the carrying value
of these assets relating to the Palito Mine have reduced compared with the value
at 31 December 2009.  This is as a result of variation in exchange rates,
depreciation charges made during the period and asset disposals.  At the same
time the Net Present Value of the Palito project has increased in value compared
with the calculation undertaken as of 31 December 2009, but such increase is
entirely due to the variations in the exchange rates ruling at the end of each
of the respective periods.  As a result and in accordance with the provisions of
IAS 36 - Impairment of Assets, the Directors have agreed not to make any
adjustment to the impairment provision currently carried in the books of the
group

In deriving an estimate of the value in use in respect of the Palito mine the
Directors' have calculated a Net Present Value of the projected cash flow to be
derived from the exploitation of the known reserves of 187,538 gold equivalent
ounces as estimated at the end of March 2008.  The key assumptions underlying
the Net Present Value are unchanged from those detailed in the Annual Report
2009 save that commencement of operations has been set as 1 July 2012 (six
months later than previously), the exchange rate BrR$ to US$ has been set at
1.8015 (previously 1.7412). The long term gold price has not been amended and is
set at US$850.  The value in use taking into account these parameters of Palito
has been estimated at US$36.2 million (previously US$35.3 million)

10. Contingent Liability
In June 2010, the Company's wholly owned subsidiary Serabi Mineracao Limitada
("SML") was held to be in breach of certain conditions of its operating licence
by the Brazilian Federal Environmental Agency IBAMA, as a result of which SML
was required to suspend activities at the Palito Mine and a fine was levied of
R$3,597,300 (approximately US$2 million).  SML has submitted its defence to
IBAMA and is also seeking an injunction through the Brazilian courts.  The
Directors, based on legal advice received, consider that the fine levied is
inappropriate to the nature of the alleged breaches and that IBAMA has not
followed due process in making its actions and decisions.  The Directors are
confident that the initial fine imposed will be waived or significantly reduced,
but at this stage are not in a position to estimate with any certainty what
level of penalty, if any, may become due.  Accordingly no provision for any
penalty has been accrued at this time.

Qualified Persons Statement
All technical information contained within this Interim Report has been reviewed
by and verified by Michael Hodgson as required by the AIM Guidance Note on
Mining, Oil and Gas Companies dated March 2006.  Michael Hodgson is an Economic
Geologist by training with 20 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 the UK.


[HUG#1444592]








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Unternehmen: Serabi Mining plc - ISIN: GB00B074J639