SOURCE: Serabi Mining plc

April 23, 2008 03:06 ET

1st Quarter Results - correction

LONDON--(Marketwire - April 23, 2008) -

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

4th Quarter Investor Update Announcement

Serabi Mining plc (AIM: SRB) announces that it has today issued a 4th

Quarter Investor Update for the quarter ended 31st December 2007.

The full text of the quarterly update is available from the Serabi

offices at 30 - 32 Ludgate Hill, London, EC4M 7DR or from the


The company has highlighted in its update the following matters:

- Delays to new mining equipment have contributed to lower Q1 production of 4,985 oz gold equivalent

- The arrival of key mining equipment is forecast to have a material positive impact on production during the rest of 2008

- Implementation of a revised mine plan and optimisation of the mining method at Palito expected to enhance productivity and mine grades

- New areas of high-grade mineralisation on the PMZ and adjacent structures to contribute to production

- Geophysical survey indicates eight previously undetected large targets

Following last year's mining problems, we look forward to a much improved 2008. The focus is on profitable, quality production as well as establishing a detailed understanding and quantification of the wider ore potential in the Palito / Jardim do Ouro district. However, the first quarter has been very disappointing operationally. New equipment scheduled to be delivered early in the period was seriously delayed as the manufacturers were unable to adhere to their production schedules.

This delay came at the same time that we experienced an abnormal level of downtime with existing equipment. This limited our drilling capability in the early part of the period and in particular our ability to mine the higher grade stoping blocks. The affected equipment is now operational again and the arrival of additional equipment will limit the future impact in the unlikely event of similar problems.

After these setbacks we are now pleased to announce that this important mining equipment has now started to arrive at site and much improved results are now anticipated. The first two mini-scoops and the first drilling mini- jumbo arrived on site in April and will be followed by a number of other key items during the rest of the second quarter. The introduction of this equipment and revised mining plans are expected to lead to a significant escalation of production during the rest of the year.

Palito - Operating Results (1)
                        2008   2007
                        Q1     Q1     Q4
Total Mined         t   57,542 55,251 56,926
(per day)               (632)  (614)  (619)
Mined Ore           t   33,022 42,217 41,148
(per day)               (363)  (469)  (447)
Milled              t   32,479 42,705 40,481
(per day)               (357)  (475)  (440)
Head Grade          g/t 4.52   6.50   5.40
Recovery            %   89.00  89.60  89.80
Gold                oz  4,217  8,044  5,989
Copper              t   85.80  125.60 110.40
Gold Equivalent (2) oz  4,985  9,301  7,069

Operations and Outlook

As discussed in the Q4 2007 Investor Update, the main goal in 2008 is to produce some 40,000 of gold equivalent ounces at sub $400/oz AuEq cash costs, through the following measures:

- Expanding the mining fleet with specialised narrow-vein mining equipment

- Improved mine planning, management systems and personnel training

The introduction of specialised narrow-vein, "slim-size" machines will enable mechanised mining of narrower development drifts, with the overall aim of reducing mining widths in ore from 1.8m to an average of 1.2m, thus greatly benefitting mined ore grades. The range of slim-size machines coming to Palito includes two new drilling rigs (mini-jumbos), one for face drilling and a second for long-hole stoping and four narrow scoops (mini-scoops) to complement the three existing larger scoops already in operation. Despite our best efforts to obtain the equipment from the manufacturers as quickly as possible, we suffered severe delays in delivery which had a direct and adverse effect upon Q1 production. This was further compounded by the failure of some of the existing equipment, which only made the delays in the delivery of new equipment harder to tolerate. These failures impacted primarily on activity in January and February but with the return to operation of this equipment during March, mine production has now improved.

Despite these production difficulties, considerable success was achieved over the quarter in optimising the long-hole stoping technique, which last year proved to be problematical. Narrow stoping widths of 1.2m are now being achieved and at times, where required, even narrower. The combination of improved long-holing and the use of specialized narrow-vein mining equipment is forecast to bring greater selectivity and improved grades. Planning for the year anticipated the possibility that Q1 2008 production might be adversely affected by these delays and we remain optimistic that the 2008 targets of approximately 40,000 oz AuEq at costs of sub $400/oz AuEq can be met with the following key actions now in progress:

* Staged delivery of additional mining fleet

* The mining of the Ruari's Ridge oxide deposit by open pit

* Continued refurbishment of the process plant to maximise its capability in preparation for latter part of 2H 2008


During mid-2007, a decision was taken to escalate and focus exploration activities on assessing the full potential of the Jardim do Ouro (JdO) district, with the objective of turning exploration success into production ounces as quickly as possible. As a result, the company increased its efforts on the near-mine area, and during Q1 2008 over 9,000m of drilling was completed across known near-mine prospects.

Besides drilling activity, and as reported in January, the company completed its most ambitious exploration activity to date by flying a 6,000 hectare, helicopter-borne electromagnetic (VTEM) geophysical survey at the start of the year. The results have now been received and the initial review indicates potential for an additional eight mineralised bodies within the Jardim do Ouro district. Detailed analysis of the results is ongoing but an initial drilling campaign on selected targets is due to commence during this quarter. With the deployment of new mining equipment, refinement of the mining method to improve ore quality and additions to the mine management team, we believe we are now well placed to achieve significant production improvements during the rest of 2008. Furthermore, it is hoped that during the year we can significantly advance our existing prospects and the new near-mine exploration prospects being generated. If successful we should be in a position to expand geological resources and during the next twelve months make investment decisions to increase future gold production. This will place Serabi on a strong footing to reach its goal of becoming a well established, emerging producer.

Graham Roberts - Chairman

Mike Hodgson - CEO


Serabi Mining plc:

Graham Roberts Tel: 020 7246 6830

Chairman Mobile: 07768 902475

Mike Hodgson Tel: 020 7246 6830

CEO Mobile: 07799 473621

Clive Line Tel: 020 7246 6830

Finance Director Mobile: 07710 151692

Robyn Hodson Tel: 020 7246 6830

Investor Relations



Numis Securities Limited:

John Harrison Tel: 020 7260 1000

James Black Tel: 020 7260 1000

Farmstreet Communications:

Simon Robinson Tel: 07887 985671

Notes to Editors

The Tapajos region of northern Brazil encompasses an area of approximately 100,000 km², primarily situated in south-west Para State. It has a significant history of alluvial gold production with estimated gold production of some 30 million ounces having being recovered, primarily from artisanal workings.

Present in the Tapajos since 1999, Serabi has established the only 'hard rock' mine in the region to date at its Palito gold mine.

Serabi has a significant exploration programme focused on the Tapajos region, operates four surface drilling rigs and has its own assay laboratory.

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