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LONDON (Alliance News) - Gold explorer Serabi Gold PLC Thursday reported a wider loss for the first half of the year as administration costs increased, but is expecting a strong second half after commercial production was declared at its Palito site in Brazil at the start of July.
Its pretax loss for the six months to June 30 was USD2.9 million, wider than the USD2.3 million loss it posted a year earlier. The company didn't earn any revenue in either period.
The company's main project is the Palito gold mine in the Tapajos region of northern Brazil, as well as the surrounding 53,000 hectares of exploration tenements. It has been building a processing plant at the mine and is now producing, but also expects production to pick up after it completed the cyanide leaching tanks to improve gold recovery from tailings. It is predicting gold production of 23,000 to 24,000 tonnes in 2014 as a whole.
"The end of July also saw the completion of the Carbon in Pulp cyanide leaching tanks, which we will begin commissioning this month, and we expect this to increase gold recoveries to over 90%," Chief Executive Mike Hodgson said in a statement.
The company said it produced 3,242 ounces of gold in the second quarter, meaning it has produced 5,542 tonnes so far in 2014. It said it has recognised USD5.2 million of revenue in the first half from sales of about 3,900 ounces.
"With expanded milling capacity and the start of gold production from the CIP circuit during the third quarter, I anticipate a strong second half of 2014," Hodgson said.
The company also has another exploration area 23 kilometres south west of the Palito mine, called Sao Chico. Development at this site was delayed by heavy rains earlier in the year, but is now progressing well as the ground dries out quickly, the company said.
"Development work at Sao Chico is now progressing well, with a surface drill programme planned for later in the third quarter of this year and I look forward to providing shareholders with an updated geological resource for Sao Chico by the end of the first quarter of 2015," Hodgson said.
Serabi Gold shares were down 0.7% at 6.33 pence Thursday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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