Last checked at 
LONDON (Alliance News) - Serabi Gold PLC shares rose on Friday after it reported first quarter profit that was five times higher than the immediately previous quarter, as an increase in production was reinforced by the strong rally in gold prices since the start of 2016.
Serabi shares were up 17% to 5.12 pence per share on Friday morning.
The miner said it generated a pretax profit of USD1.5 million in the first three months of the year, multiplying from the USD285,221 profit made in the last three months of 2015 and the USD191,398 booked a year earlier.
A rise in production to 9,771 ounces of gold and a significant rise in gold prices to USD1,165 helped to push Serabi's revenue up to USD11.7 million - a large rise from the previous quarter and from a year earlier.
The miner booked revenue of USD8.0 million in the final quarter of last year through the production of 7,925 ounces at a price of USD1,105 per ounce, meaning prices have risen by around 5.5% quarter-on-quarter.
Looking at the year-on-year comparison, Serabi produced 7,389 ounces of gold in the first quarter of 2015 and sold it for an average of USD1,212 per ounce, which generated USD7.5 million worth of revenue.
Unsurprisingly, the rise in production pushed Serabi's cost of sales up and the miner's gross profit of USD1.5 million in the first quarter of 2016 was slightly lower than the USD1.6 million made in the previous quarter.
The all-in sustaining cash cost in the first quarter averaged USD858 per ounce - giving Serabi a gross margin of USD307 per ounce sold, whereas the margin in the previous quarter was around USD198.
Serabi said its full-year target is to produce around 37,000 ounces of gold for the full year at an all-in cost of USD840 to USD870 per ounce, meaning costs are expected to stay within the current range.
Based on the first quarter production, Serabi would produce over 39,000 ounces of gold - implying Serabi has been cautious with its guidance.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
