Serabi Mining plc: Financial Results for First Quarter 2011 and Management Discussion and Analysis
LONDON -- (Marketwire) -- 05/16/11 -- Serabi Mining plc (AIM: SRB) (TSX: SBI) (TSX: SBI.WT), the Brazilian focused gold exploration company, advises that it
has today published its unaudited financial results for the first quarter
of 2011 and at the same time has also published its Management's Discussion
and Analysis for the same period. Both documents, together with this
announcement, have been posted on the Company's website at
www.serabimining.com and are also available on SEDAR at www.sedar.com. The
full text of both the financial results and Management's Discussion and
Analysis are also available by following the links contained in this press
release.
Financial Highlights
Quarter ended 31 Quarter ended 31 Year ended 31
March 2011 March 2010 December 2010
(unaudited) (unaudited) (audited)
US$ US$ US$
Operating Loss
for period (742,642) (953,599) (5,980,011)
Loss per ordinary
share (basic and
diluted) (1.65) cents (2.91) cents (15.21) cents
Exploration
expenditures during
the period 1,639,267 305,019 2,481,665
Cash at end
of period 11,100,828 3,423,326 8,598,755
Equity Shareholders
funds at end
of period 54,097,874 41,445,493 44,351,818
For the three month period ended 31 March 2010 the Company recorded a net
loss of US$742,642 (1.65 US cents per share) compared to a net loss of
US$953,599 (2.91 US cents per share) for the comparative period last year.
The decrease in the loss reflects reduced administrative costs and a
foreign exchange gain recorded during the period of US$187,297, compared
with a foreign exchange loss in the comparative period of US$1,180. At the
same time in the corresponding period in 2009, the Company had limited gold
production which yielded a gross profit of US$78,866. There has been no
mining operation during the three month period ended 31 March 2011 and as a
result the Company incurred a gross loss of US$183,822.
Operational Highlights
-- January 2011 - Completed an additional 8,000 hectare helicopter borne
electromagnetic ('VTEM') survey over adjacent areas to the original 2008
mine site survey area within the Jardim do Ouro project.
-- February 2011 - The Company received the positive outcome of its appeal
to the Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais
Renovaveis ('IBAMA') that the original penalty of Brazilian Reals 3,597,300
(~US$2.2 million) was cancelled with immediate effect.
-- February 2011 - Positive geochemical results received from trenching
over the Piaui drill target including 1 metre at 33.6 g/t and 3.2 metres at
16.1 g/t (see press release 22 February 2011 for all results).
-- April 2011 - Results received for the first five drill holes into the
Piaui target indicated significant gold mineralization in all five holes
including 1.93 metres at 22.86 g/t and 2.5 metres at 6.22 g/t (see press
release 7 April 2011 for all results).
Corporate Highlights
-- Following the completion of a private placement of 10,070,000 Special
Warrants on 2 December 2010, for gross proceeds of C$5,538,500, the Company
completed on 30 March 2011 an Initial Public Offering ('IPO') of 9,000,000
units in Canada at a price of C$0.55 per share for gross proceeds of C$4.95
million.
-- Each of the 9,000,000 units were comprised of one ordinary share and
one half warrant of one ordinary share purchase warrant of the Company,
with each warrant being exercisable to acquire one Ordinary Share at an
exercise price of C$0.75 until 2 December 2012.
-- The completion of the IPO and the listing of the Ordinary Shares and
Warrants on the TSX on 30 March also resulted in the automatic exercise of
the 10,070,000 previously issued special warrants of the Company in
December 2010.
-- The appointment on 30 March 2011 of Messrs Sean Harvey and Melvyn
Williams and Dr Doug Jones as independent directors of the Company.
Outlook
Serabi's short term strategy for the JDO Project (phase 1) to be followed
for the next 6 months continues to focus on 'head-frame' exploration with
the objective of discovering more Palito style deposits. In further detail
this will involve:
-- Continuing with the 8,100 metre discovery drilling programme into 9
high priority targets within 3km of the plant (2,700 metres of this
programme had been drilled by the end of April)
-- Follow-up ground geophysics (Induced Polarisation) on the remaining
five VTEM geophysical anomalies located in the original 2008 airborne
survey area (6,000 Ha) with the objective of generating further drill
targets - this is planned to commence July 2011.
-- Conduct a further 7,000 Ha airborne geophysical VTEM survey over
further JDO tenements - (an 8,000 Ha survey was completed in January 2011
and results from which are expected later in May 2011).
-- Follow-up ground geophysics (Induced Polarisation) on the January 2011
8,000 Ha airborne geophysical VTEM survey area.
-- Commencing a thorough mine-site deep geochemistry
Geochemical/Trenching/Auger program.
-- The initial phase one of the exploration budget is in the region of
US$8 million and is aimed to investigate the mine site targets as well as
some of the immediate surrounding tenements (within 20km of the operation).
SERABI MINING PLC
Condensed Consolidated Statements of Comprehensive Income
For the For the For the
Three months Three months year
ended ended ended
31 March 31 March 31 December
2011 2010 2010
(expressed in US$) (unaudited) (unaudited) (audited)
------------ ------------ ------------
CONTINUING OPERATIONS
Revenue -- 840,639 1,229,551
Operating expenses (183,822) (761,773) (2,416,746)
------------ ------------ ------------
Gross (loss)/profit (183,822) 78,866 (1,187,195)
Administration expenses (124,946) (397,634) (2,266,912)
Option costs (30,571) (25,102) (103,876)
Loss on asset disposals (13,515) (54,568) (124,179)
Depreciation of plant and
equipment (567,336) (509,949) (2,112,445)
------------ ------------ ------------
Operating loss (920,190) (908,387) (5,794,607)
Foreign exchange gain/ (loss) 187,297 (1,180) (27,396)
Finance costs (22,152) (44,032) (187,912)
Investment income 12,403 -- 29,904
------------ ------------ ------------
Loss before taxation (742,642) (953,599) (5,980,011)
Income tax expense -- -- --
------------ ------------ ------------
Loss for the period from
continuing operations (1) (2) (742,642) (953,599) (5,980,011)
------------ ------------ ------------
Other comprehensive income (net
of tax)
Exchange differences on
translating foreign operations 943,210 (835,842) 1,613,011
------------ ------------ ------------
Total comprehensive income/(loss)
for the period (2) 200,568 (1,789,441) (4,367,000)
------------ ------------ ------------
------------ ------------ ------------
Loss per ordinary share (basic
and diluted) (1) (1.65c) (2.91c) (15.21c)
------------ ------------ ------------
(1) All revenue and expenses arise from continuing operations.
(2) The Group has no non-controlling interests and all income / (losses)
are attributable to the equity holders of the Parent Company.
SERABI MINING PLC
Condensed Consolidated Balance Sheets
As at As at As at
31 March 31 March 31 December
2011 2010 2010
(expressed in US$) (unaudited) (unaudited) (audited)
----------- ----------- -----------
Non-current assets
Development and deferred exploration
costs 11,679,390 7,058,548 9,797,406
Property, plant and equipment 34,088,905 33,917,842 33,951,140
----------- ----------- -----------
Total non-current assets 45,768,295 40,976,390 43,748,546
----------- ----------- -----------
Current assets
Inventories 1,488,737 1,460,550 1,417,804
Trade and other receivables 168,419 156,494 96,143
Prepayments and accrued income 1,175,068 1,249,760 1,061,945
Cash at bank and cash equivalents 11,100,828 3,423,326 8,598,755
----------- ----------- -----------
Total current assets 13,933,052 6,290,130 11,174,647
----------- ----------- -----------
Current liabilities
Trade and other payables 3,282,582 3,595,567 3,147,258
Accruals 313,577 83,752 174,348
Interest bearing liabilities -- 31,285 --
Special warrants -- -- 5,059,995
----------- ----------- -----------
Total current liabilities 3,596,159 3,710,604 8,381,601
----------- ----------- -----------
Net current assets 10,336,893 2,579,526 2,793,046
----------- ----------- -----------
Total assets less current
liabilities 56,105,188 43,555,916 46,541,592
----------- ----------- -----------
Non-current liabilities
Trade and other payables 340,174 496,103 552,027
Provisions 1,396,249 1,367,225 1,388,571
Interest bearing liabilities 270,891 247,095 249,176
----------- ----------- -----------
Total non-current liabilities 2,007,314 2,110,423 2,189,774
----------- ----------- -----------
Net assets 54,097,874 41,445,493 44,351,818
----------- ----------- -----------
Equity
Share capital 29,291,551 26,848,814 27,752,834
Share premium 48,282,042 36,268,991 40,754,032
Option reserve 1,686,032 1,553,661 1,648,484
Other reserves 702,095 260,882 260,882
Translation reserve 4,825,378 1,433,315 3,882,168
Accumulated loss (30,689,224) (24,920,170) (29,946,582)
----------- ----------- -----------
Equity shareholders' funds 54,097,874 41,445,493 44,351,818
----------- ----------- -----------
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 2010, 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.
The auditors' report on these accounts was unqualified but did contain an
Emphasis of Matter with respect to the ability of the Company and the Group
regarding the future availability of project finance. The auditors' report
did not contain a statement under Section 498 (2) or 498 (3) of the
Companies Act 2006.
SERABI MINING PLC
Condensed Consolidated Cash Flow Statements
For the For the For the
three months three months Year
ended ended Ended
31 March 31 March 31 December
2011 2010 2010
(expressed in US$) (unaudited) (unaudited) (audited)
------------ ------------ ------------
Operating activities
Operating loss (920,190) (908,387) (5,794,607)
Depreciation - plant, equipment
and mining properties 567,336 509,949 2,112,445
Loss on sale of assets 13,515 54,568 124,179
Option costs 30,571 25,102 103,876
Interest paid (10,326) (34,542) (149,439)
Foreign exchange loss (48,930) (1,460) (175,671)
Changes in working capital
(Increase) / decrease in
inventories (37,481) (17,385) (95,530)
(Increase) / decrease in
receivables, prepayments and
accrued income (158,356) 39,088 569,010
(Decrease) / increase in
payables, accruals and
provisions (11,749) (75,840) (631,396)
------------ ------------ ------------
Net cash flow from operations (575,610) (408,907) (3,937,133)
------------ ------------ ------------
Investing activities
Proceeds from sale of fixed
assets 40,642 106,851 501,209
Purchase of property, plant and
equipment (27,383) -- (7,225)
Exploration and development
expenditure (1,639,267) (305,019) (2,481,665)
Interest received 12,403 -- 29,904
------------ ------------ ------------
Net cash outflow on investing
activities (1,613,605) (198,168) (1,957,777)
------------ ------------ ------------
Financing activities
Issue of ordinary share capital 4,961,179 -- 5,424,120
Issue of warrants 208,229 -- --
Issue of special warrants -- -- 5,453,761
Capital element of finance lease
payments -- (46,052) (79,303)
Payment of share issue costs (706,564) -- (35,059)
Payment of special warrant issue
costs (14,900) -- (393,765)
------------ ------------ ------------
Net cash inflow/(outflow) from
financing activities 4,447,944 (46,052) 10,369,754
------------ ------------ ------------
Net increase/(decrease) in cash
and cash equivalents 2,258,729 (653,127) 4,474,844
Cash and cash equivalents at
beginning of period 8,598,754 4,081,882 4,081,882
Exchange difference on cash 243,345 (5,429) 42,029
------------ ------------ ------------
Cash and cash equivalents at end
of period 11,100,828 3,423,326 8,598,755
------------ ------------ ------------
Copies of this release are available from the Company's website at
www.serabimining.com
Forward-looking statements
This press release contains forward-looking statements. All statements,
other than of historical fact, that address activities, events or
developments that the Company believes, expects or anticipates will or may
occur in the future (including, without limitation, statements regarding
the estimation of mineral resources, exploration results, potential
mineralization, potential mineral resources and mineral reserves) are
forward-looking statements. Forward-looking statements are often
identifiable by the use of words such as 'anticipate', 'believe', 'plan',
may', 'could', 'would', 'might' or 'will', 'estimates', 'expect', 'intend',
'budget', 'scheduled', 'forecasts' and similar expressions or variations
(including negative variations) of such words and phrases. Forward-looking
statements are subject to a number of risks and uncertainties, many of
differ materially from those discussed in the forward-looking statements.
Factors that could cause actual results or events to differ materially from
current expectations include, among other things, without limitation,
failure to establish estimated mineral resources, the possibility that
future exploration results will not be consistent with the Company's
expectations, the price of gold and other risks identified in the Company's
most recent annual information form filed with the Canadian securities
regulatory authorities on SEDAR.com. Any forward-looking statement speaks
only as of the date on which it is made and, except as may be required by
applicable securities laws, the Company disclaims any intent or obligation
to update any forward-looking statement.
Qualified Persons Statement
The information contained within this announcement has been reviewed and
verified by Michael Hodgson, CEO of the Company. Mr Hodgson is an
Economic Geologist by training with over 25 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, recognizing him as both a Qualified Person for the purposes
of Canadian National Instrument 43-101 and by the AIM Guidance Note on
Mining. Oil and Gas Companies dated March 2006.
Q1 2011 Financial Results (PDF version):
http://hugin.info/137617/R/1516111/452402.pdf
Q1 2011 Management Discussion and Analysis (PDF version):
http://hugin.info/137617/R/1516111/452405.pdf
Enquiries:
Serabi Mining plc
Michael Hodgson
Chief Executive
Tel: 020 7246 6830
Mobile: 07799 473621
Clive Line
Finance Director
Tel: 020 7246 6830
Mobile: 07710 151692
Email: contact@serabimining.com
Website: www.serabimining.com
Beaumont Cornish Limited
Nominated Adviser
Roland Cornish
Tel: 020 7628 3396
Michael Cornish
Tel: 020 7628 3396
Hybridan LLP
UK Broker
Claire Noyce
Tel: 020 7947 4350
Farm Street Communications
Public Relations
Simon Robinson
Tel: 07593 340107
Fig House Communications
Investor Relations
Rebecca Greco
Tel: 1 416 822 6483