SOURCE: Serabi Mining plc

June 11, 2008 02:01 ET

AGM Statement

LONDON--(Marketwire - June 11, 2008) -

Serabi Mining plc advises that at 11:00 today, it will be holding its Annual General Meeting.

The following reproduces the text of the statement that will be made by Graham Roberts, Chairman of the Company:

"Whilst I consider that much progress and many achievements were made throughout the Company during 2007, particularly on the exploration front, the focus for many followers has been on production at Palito. It was therefore clearly disappointing that the transition to fully-mechanised operations last year was not as smooth as we had anticipated. The reasons for low mining grades, which resulted in lower production levels, have been well documented and I will not labour them further. Suffice to say that Mike Hodgson was initially brought in as Technical Director in 2007 and quickly realised the potential difficulties that we faced. Whilst we considered a variety of solutions, ultimately a decision was taken in the second half of the year that more specialised mining equipment was required in order to allow the introduction of a more selective and thus more economic mining method.

For this purpose, two narrow-width scoop trams have recently arrived on site along with two narrow-width jumbo drilling rigs, with a further two narrow-width scoop trams due to be released from the factory later this month. As we have already reported, the arrival of the scoop trams from the manufacturer was significantly delayed, which resulted in their late commissioning at the end of April. The two narrow-width jumbo drill rigs, although delivered according to the original schedule, have also only arrived on site in this quarter, with the second commissioned in the last few days.

The consequence of the delays in obtaining the required equipment was that production for the first quarter was expected to be low. However it was further hampered by a significant breakdown of one of the existing drill rigs and then by the failure of an air compressor required for one of the two other drill rigs. The net result was that the mine was unable to produce the budgeted levels of the higher grade stoping ore and was instead more reliant upon lower grade ore mined from development drives.

We anticipated that, provided we had the drilling capability, the arrival of the new scoop trams in the second quarter would enable us to reduce development widths and thus improve the mined grade of ore from development headings. I have to report that limited drill availability in the second quarter has continued to hamper these plans resulting in lower mined tonnage than planned during April and much of May. However, I am pleased to advise that since the last week of May and following the commissioning of the first of the new narrow-width jumbo drills, we are achieving the daily milled throughputs of 450 - 500 tonnes per day that we previously anticipated. Following the arrival of the additional new narrow-width jumbo drill we can also now undertake the necessary repairs to the two older machines and return them to their full production capability.

Whilst we have seen some operating progress this year, it is only on completion of the mill refurbishments in the third quarter and with the full deployment of the new mining equipment imminent, that the full extent of the production recovery plans will manifest themselves. Against this background we are therefore targeting a significant production uplift for the second half of the year, to around 21,000 to 23,000 gold equivalent ounces. However, following reduced production levels against original forecasts for the first half of the year, we anticipate that (assuming no further setbacks) full year production for 2008 is now unlikely to be greater than 34,000 gold equivalent ounces.

Meanwhile, on the exploration front we have been very successful in identifying new areas of mineralisation at Jardim do Ouro and continue to be excited by the potential for further discoveries in the district. Work will include follow up of the airborne geophysical survey completed in January this year, with drilling on some of the priority targets that were identified. Outside of Jardim do Ouro we have concentrated our efforts on completing the initial screening of the Pison and Modelo prospects, which we see as having the potential to host low-grade, bulk-tonnage deposits. During the remainder of 2008 we also expect to undertake limited drill programmes outside of Jardim do Ouro, with the main focus on the Goiano prospect which is located adjacent to our Castenheira project, some 150 kms to the south west of Palito, close to the Transgarimpeiro highway.

In conclusion, while we have experienced some disappointments over the last 12 months, the management of Serabi and I remain convinced that following a number of significant initiatives that have been put in place, these are now behind us and we can move forward in our near-term objective of building Serabi into a profitable junior gold producer with good growth potential."


Serabi Mining plc

Graham Roberts                  Tel: 020 7246 6830
Chairman                        Mobile: 07768 902 475

Clive Line                      Tel: 020 7246 6830
Finance Director                Mobile: 07710 151 692

Robyn Hodson                    Tel: 020 7246 6830
Investor Relations


Numis Securities Limited
John Harrison                   Tel: 020 7260 1000
James Black                     Tel: 020 7260 1000

Farm Street 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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