SOURCE: Serabi Mining plc

July 09, 2008 02:17 ET

Ore Reserve and Mineral Resource Update

LONDON--(Marketwire - July 9, 2008) -


PALITO ORE RESERVE & MINERAL RESOURCE UPDATE

Serabi Mining plc ("Serabi" or the "Company") announces an update of mineral resources at its 100% owned Palito gold mine in Para state, northern Brazil and, for the first time, reports an ore reserve for the mine.

* Mineral resource of 0.67 million total contained gold equivalent ounces established at the Palito gold mine

* Based on 25 mineralised structures, the resource definition has expanded to encompass three new mineralised areas discovered during the past year

* Ongoing exploration demonstrates possible further significant extension of a number of the mineralised veins, which also remain open

* Contained within the resource estimate, a total proved and probable ore reserve of 187,538 ounces gold equivalent established

* Mineral resource and ore reserve reported in this release have been reviewed and verified by the mining consultancy group NCL Brasil Ltda

Mineral Resources

The total mineral resource at the Palito mining operation, including all categories as at 31st March 2008, has been estimated at 0.67 million ounces of gold equivalent, assuming a 1.0 g/t cut-off. These resources are based on extensive surface and underground drilling combined with sampling results from underground development. Within the 0.67 million ounces of mineral resources, 224,300 ounces of gold equivalent occur in the higher confidence Measured and Indicated categories, with the balance in the Inferred resource category.

Details of the resource estimation as at 31st March 2008, are tabled below with mining depletion up to 31st March 2008 taken into account.

Table 1: Serabi Mining plc Mineral Resource Statement (1) (2) (3)
(5), as at 31 March 2008

Mineral                                   Contained   Contained Gold
Resource      tonnage   Gold g/t Copper % Gold Ounces Equivalent
                                                      Ounces (4)
Measured
Resources
Palito Main   97,448    9.51     0.26     29,793      32,045
Zone (PMZ)
Palito West   -         -        -        -           -
(PW)
Chico da      -         -        -        -           -
Santa (CS)
Ruari Ridge   -         -        -        -           -
(RR)
Total
Measured      97,448    9.51     0.26     29,793      32,045
Resources
Indicated
Resources
Palito Main   593,175   7.15     0.23     136,417     148,546
Zone (PMZ)
Palito West   46,844    13.16    0.26     19,825      20,902
(PW)
Chico da      78,987    5.91     0.23     15,011      16,681
Santa (CS)
Ruari's Ridge 34,740    4.85     0.22     5,420       6,100
(RR)
Total
Indicated     753,745   7.29     0.23     176,673     192,228
Resources
TOTAL
Measured +    851,193   7.54     0.23     206,466     224,272
Indicated
Inferred
Resources
Palito Main   821,405   6.04     0.18     159,614     172,927
Zone (PMZ)
Palito West   200,256   8.22     0.23     52,934      57,140
(PW)
Chico da      434,664   6.01     0.23     84,036      93,100
Santa (CS)
Ruari's Ridge 631,417   4.74     0.43     96,232      120,789
(RR)
Total
Inferred      2,087,741 5.85     0.27     392,817     443,956
Resources


(1) Mineral resources are reported at a cut-off grade of 1.0 g/t

(2) The Mineral Resources as set out in the table above have been
estimated by Rodrigo Mello, from NCL, who is a competent person under
the JORC Code for mineral deposits such as Palito.  The Mineral
Resources are classified as Measured, Indicated and Inferred, in
compliance with the JORC Code

(3) Numbers may not add up due to rounding

(4) Equivalent gold is calculated using an average long-term gold
price of US$700 per ounce, a long-term copper price of US$2.75 per
pound, average metallurgical recovery of 90.3% for gold and 93.9% for
copper

(5) It should be noted that the definition of the Inferred mineral
resource category typically has lower certainty as to resource
existence and economic viability.

The mineral resource estimate outlined is based on a total of 25 different veins of a minimum 70cm width, located within the larger mineralised sections of the Palito Main Zone (PMZ), the Palito West zone (PW), Chico da Santa area (CS) and the Ruari's Ridge zone (RR). Each vein has been interpreted and modelled in 3D using Gemcom modelling software. Samples contained within, and representative of these modelled ore envelopes have been selected and variography performed. Following this, the ordinary kriging algorithm was used to interpolate gold and copper block models. Tonnage and grade have then been estimated from the modelled ore envelopes and the grade block models.

The grade block models for the different orebodies were validated by NCL and Serabi staff, who concluded that these models were consistent with the original geological data available.

The PMZ resource mostly consists of eight vein structures . Two of the eight vein structures, the G3 and G2 veins, make up the bulk of the resource. These two veins have to date formed the majority of the 95,000 ounces gold equivalent mine production at Palito since the beginning of 2005. Significantly there is good evidence that both mineralised features remain open to the south and at depth. It should be noted that since the March 31st disclosure date further drilling of the PMZ as well as the other zones has been completed, though we await further assays. To date, over 2,350 drill-hole samples and 750 underground channel samples are outstanding. However, preliminary visual interpretation of the drill core indicates the potential for the PMZ to continue at least a further 300 metres to the south, and is still open at depth.

Palito West consists of six veins which also remain open to the north and south. As with the PMZ, we await assay confirmation of more recent drilling but visual interpretation of recent drill core indicates a potential strike extension of at least 200 metres to the north on two of the six veins since this estimation was carried out.

The Chico da Santa area to the east of the PMZ consists of five mineralised vein-type orebodies, and all remain open to the north, south and at depth. Finally the Ruari's Ridge zone comprises of seven mineralised vein structures extending over a strike length of up to 900 metres and with gold and copper grades down to 300 metres depth.

Ore Reserves

Within the total mineral resource estimate, NCL Brasil Ltda has estimated an ore reserve of 187,500 ounces gold equivalent, comprising of 732,500 tonnes @ 7.34 g/t gold and 0.22% copper. It should be noted that these reserves are derived from the Measured and Indicated resource categories within the Total Mineral Resource of 0.67 million ounces tabulated above, and are NOT additional.

In reporting an ore reserve at Palito for the first time, it is important to note the parameters adopted at the base of the table.

Table 2: Serabi Mining plc Ore Reserve Statement (1) (2) (3) (5) as
at 31 March 2008

                        Gold     Copper Contained   Contained Gold
Ore Reserve     tonnage (g/t Au) (% Cu) Gold Ounces Equivalent Ounces
                                                    (4)
Proved Reserves
Palito Main     56,464  9.06     0.29   16,456      17,910
Zone (PMZ)
Palito West     -       -        -      -           -
(PW)
Chico da Santa  -       -        -      -           -
(CS)
Ruari's Ridge   -       -        -      -           -
(RR)
Total Proved    56,464  9.06     0.29   16,456      17,910
Reserves
Probable
Reserves
Palito Main     547,535 6.92     0.22   121,904     132,614
Zone (PMZ)
Palito West     54,642  10.85    0.2    19,063      20,063
(PW)
Chico da Santa  55,485  6.52     0.23   11,639      12,786
(CS)
Ruari's Ridge   18,365  6.39     0.24   3,773       4,166
(RR)
Total Probable  676,028 7.19     0.22   156,379     169,628
Reserves
TOTAL Proved +  732,492 7.34     0.22   172,836     187,538
Probable

(1) Ore reserves are reported at a cut-off grade of 4.7 g/t.  2007
and 2008 year to date costs have been assumed.  An exchange rate of
US$1 = R$1.90 has been considered over the reserve life

(2) Minimum mining widths of 1.2m have been assumed

(3) The Ore Reserves as set out in the table above have been
estimated by Carlos Guzmán, from NCL, who is a competent person under
the JORC Code.  The Ore Reserves are classified as Proved and
Probable, in compliance with the JORC Code

(4) Equivalent gold is calculated using an average long-term gold
price of US$700 per ounce, a long-term copper price of US$2.75 per
pound, average metallurgical recovery of 90.3% for gold and 93.9% for
copper

(5) Numbers may not add up due to rounding

Commenting on the resource and reserve update Mike Hodgson, Chief Executive Officer of Serabi Mining plc said:

"This is the first disclosure of an ore reserve at the Palito Operations, and it better positions the company to plan future production, and at current production rates indicates a minimum approximate mine life of a further 4 years. NCL Brasil Ltda have been working with Serabi at Palito since last year in order to review the Company's resources, related practices and mine planning. Their expertise, combined with that of our in-house technical team, applied in this resource and reserve estimation, further underpins our production planning and outlook.

Meanwhile, exploration success is continuing at Palito and significant drilling undertaken since the 31 March review demonstrates strike and dip extensions of known orebodies already in production at the mine and we are therefore confident that both the mineral resource and ore reserve can continue to grow. As all the known structures at Palito are sub-vertical dipping mineralized veins, it makes commercial sense to drill these structures to a limited depth and then further evaluate from underground mine workings at a later date once the relevant upper levels have been developed. It is therefore unrealistic to drill out these types of deposits to completion but it is not unusual to see them continue to operate over many years."

Qualified Person's Statement

The information contained within this press release has been reviewed and verified by Mr Rodrigo Melo for the resource estimate and by Carlos Guzmán for the reserve estimate, both of NCL Brasil Ltd.

Both meet the requirements as the Qualified Person for the purposes of the AIM Guidance Note on Mining, Oil and Gas Companies dated March 2006. Mr Melo is a Bachelor of Geology for the University of Minas Gerais, Brazil (1985). He is a member of the Australasian Institute of Mining and Metallurgy (membership number 209332) and a registered Geologist with the Regional Council of Engineering. He has worked as a geologist and project manager in the minerals industry for 22 years. Mr Guzmán is a Mining Engineer for the Universidad de Chile, Santiago, Chile (1995). He is a member of the Australasian Institute of Mining and Metallurgy (membership number 220036). He has worked as a mining engineer for 13 years.

NCL is a consulting company formed in Santiago, Chile in 1985. Its main objective is to provide focused advice and solutions for mining companies requiring specialised services mainly in the fields of ore resources estimation, mine design and planning (for open pit and underground methods), mine equipment selection, optimisation of mining operations and mining cost estimation. In 2001, NCL formed NCL Brazil Ltda, a company established in Belo Horizonte, Brazil.

A PDF version of this release can be accessed by clicking on the link at the end of this release

Enquiries

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

Mike Hodgson         Tel: 020 7246 6830
Chief Executive      Mobile: 07799 473 621

E-mail               contact@serabimining.com
Website              www.serabimining.com

Numis Securities Limited
John Harrison        Tel: 020 7260 1000
Nominated Adviser

James Black          Tel: 020 7260 1000
Corporate Broker

Farm Street Communications
Simon Robinson       Tel: 07787 985 671

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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