Member Info for Kensal

In case anyone is unaware there is an interview with Mike Hodgson posted on the website in the media page https://www.serabigold.com/media/. Mike Hodgson says in this interview a few things which are of interest:

1. In relation to Coringa licensing, he says that they have been in discussion with ANM about an extension of the temporary licence and that they have been told verbally that an extension will be granted and that it might even be expanded (i.e. the tonnage that can be mined and taken off site). The LI is being progressed;

2. He says that they will be moving from 40,000oz / pa (2025) to 60,000oz pa (2026) by reason of the operation of the ore sorter. My understanding of this is that he is saying that by the end of 2026 production could be at an annualised rate of 60,000 oz pa, not that 2026 production will be 60,000 oz. He refers to a figure of 54,000 oz for 2026.

3. He says that the mineral resource (due very soon) will come in at 1.2m to 1.3m.

4. He says that the confidence in the mineral resource increase is what has driven the decision to deploy the fourth ball mill., along with the reopening of San Chico (assuming gold remains high). He says that the fourth ball mill could add 10,000 to 15,000oz pa from 2027.

5. He talks about being disciplined about M&A opportunities but suggests that they are looking at local opportunities which can tie in with their existing infrastructure.

6. He suggests that Q1 2026 will be modest.

7. I've noted that the website also indicates that SRB's shorter term strategy is to increase production to 60,000oz pa by the end of 2026 and that the strategy beyond that is to become a 100k-200k oz producer in 3-5 yrs.

I think the interview reflects increasing confidence in licensing and production increases.

The main risks for investors remain (1) gold price, (2) licensing for Coringa (which is perhaps being partially de-risked in light of his comments), (3) Safety, and (4) key-man - is there a replacement for MH in 3-4 years (he is 64).

Simon Thompson has written about what he considers to be LST's potential in the past. He has written again yesterday following the raise. He notes the dilution but remains of the view that the business has strong potential. He notes that Shore Capital believes operating profit could increase as follows - £0.44mn (2026), £1.28mn (2027) and £2.95mn (2029) based on revenue of £11.7mn (2026), £15.6mn (2027) and £21.5mn (2028), with a fair value of 4.6p a share. ST says he thinks that is a conservative estimate, and he suggests averaging down via the retail offer.

I'm not going to do that as my position in the company is too large to justify more investment. After the shock of yesterday, it is good to see some positivity in this article, but I think what he says needs to be caveated:

1. Brokers' forecasts often seem to me to be somewhat divorced from market expectations, and Shore's 4.6p following the raise seems somewhat outlandish given that it was a long way below that before the raise;

2. The projected figures for operating profit and revenue must be based on the assumption of excellent execution in securing contracts in the quoted pipeline and delivering on those contracts. We don't I think have much evidence to suggest that LST can deliver on that - it might be able to or might not, but there isn't much visible history to go on;

3. My hope is that the significant fall in revenue in H2 2025 has a specific reason - the delays in BSR regulatory approvals. which LST has mentioned in the past, and that these delays will be resolved. However, it isn't really clear why BSR approval is an issue for LST particularly, as approval is required for each building project involving a higher risk building. Is approval being delayed in projects LST is involved in because of the use of Injectaclad, and the BSR is ensuring that Injectaclad is an appropriate solution and once it gets comfortable with it, approvals for future projects will be agreed more quickly or because there is just a lot of higher risk building projects being considered and the BSR doesn't have capacity to give approvals quickly enough. There's quite a lot of uncertainty around this. May be it will cleared up when the final accounts are presented - certainly there should be some explanation given for the very big drop in H2 revenue;

4. the final point to make is that even if the revenue and profit figures are achieved, this is a micro-cap and likely to remain so for a very long while if not permanently. As such it is always going to suffer a share price discount. In LST's case, the very abrupt and significant discounting and dilution of the existing shareholders will also probably have a drag effect on the share price for a long time, even if the business prospers.

Hopefully it will recover

"The hugely discounted placing is indeed bad news for holders, but the reason for it although short term massive disappointing could still prove long term rewarding if the acquisition the placing funding will integrated successfully, especially if you are buying at the current level."

"If" is doing a lot of heavy lifting here :)

I think MB11's forecast profit is broadly in the right area. Post tax profit for the first nine months was just under $35m, based on turnover of $104.5m. With production of 11,534 oz in Q4, average gold price of $4,135, turnover for Q4 was likely to be in the region of $47m. That correlates with forecast estimated turnover of $149m for 2025 as a whole published elsewhere. Post tax profit based on that might be $50m+ based on conversion of turnover to post tax profit in the first nine months of 2025 of roughly 33%, perhaps a bit more if they were able to reduce AISC during the quarter as production increase and ore sorting improved efficiencies.

Remember that AISC doesn't include capex, and capex in 2025 and 2026 includes their drilling programme., forecast cost of $18m in 2025 and $28m in 2026, so you need to account for that on top of AISC when working out post tax profit.

For 2026, 53,000oz at $5,000 per oz = turnover of $265m and that might reasonably generate post tax profit of $88m-$90m based on 2025 conversion rate. If they significantly improve efficiency because of increased production, perhaps $105m. But I don't think we can assume that gold will definitely maintain above $5,000 for the whole year, so probably better to budget for $99m.

AIM Rule 11

General disclosure of price sensitive information

11. An AIM company must issue notification without delay of any new developments which

are not public knowledge which, if made public, would be likely to lead to a significant

movement in the price of its AIM securities. By way of example, this may include matters

concerning a change in:

— its financial condition;

— its sphere of activity;

— the performance of its business; or

— its expectation of its performance.

Revenue in H1 (to 31 May 2025) was £5.1m, so revenue in H2 to 31 December 2025 was only £3.5m. That is a reduction in revenue of 31%., which is information that ought to have been notified to the market when they became aware of it. Instead they've sat on it during January and February, and made no mention of it in the CEO's video update. Anyone who bought shares in February - March can certainly feel aggrieved.

I think that market sentiment is now so bad that a good update may not make any difference at present. It would be good for the long term to get an idea how the business is progressing though.

Https://www.londonstockexchange.com/news-article/SRB/provides-operational-and-exploration-update-for-2025-brownfield-drilling-campaigns-at-palito-complex-and-coringa-announces-2026-brownfield-exploration-programme/17482573?showDisclaimer=true

Good drilling results, on track. Even more importantly some detail on progress towards Coringa permit - land change use application submitted in its final form, and good progress on FUNAI.

"We continue to pursue the full mining license at Coringa to unlock the full potential of Coringa. This is issued by SEMAS, the state environmental agency, who in turn are waiting for two approvals. The first approval is an authorisation for ‘change of land use’ which is issued from the land registry body, INCRA. The second approval is from FUNAI, who need to approve the Indigenous Study (ECI). Serabi submitted the change of land use in final form this year. The change of land use authorisation is in its final stages at state level and will then go to Brasilia for final approval at the federal level. We are hopeful this will be received in the first half of 2026. The approval of the ECI is now progressing well and I am pleased to report numerous positive consultations between Serabi and the indigenous community. FUNAI are now presenting the ECI to the indigenous community, from which a compensation study will be agreed. At this stage the ECI can be approved."

It's the price of gold. If and when positive news comes in about licences, resources and results we will hopefully see an effect on the share price independent of the price of gold, but at present the share price is reacting to the increase in gold.

Thank you for posting this.

Thank you for the update LSTH. While it was timely, it was thin on detail for what was stated on the video to be a Q1 investor update. There were no figures at all and no real sense of where y/e 2025 will land. It would be helpful to get some forward guidance on the y/e 2025 before the results are posted.