Serabi Gold's Resurgence: EPS Surges to US$0.11 in Q3 2024

Serabi Gold, a Brazilian-focused gold mining and development company, has reported a remarkable turnaround in its earnings per share (EPS) for the third quarter of 2024. The company's EPS soared to US$0.11, a stark contrast from the US$0.005 loss reported in the same period the previous year. This significant improvement can be attributed to a combination of factors, including operational improvements, strategic financial decisions, and favorable market conditions.

One of the key drivers behind Serabi Gold's earnings growth was the increased production at the Coringa Gold operation. The Company's updated pre-economic assessment (PEA) for Coringa showed an 11-year mine life with average life of mine AISC of $1,241/oz. This indicates enhanced economic viability and potential for increased production and revenue. The construction of the classification plant (crusher and ore sorter) at Coringa, which is on track to be fully operational in Q4, will further boost efficiency and gold recovery. Additionally, the Company's reiteration of its FY2024 consolidated gold production guidance of 38,000 – 40,000 ounces, despite redeploying crews from Palito to Coringa, suggests improved overall operational management and strategic planning.



The strategic reallocation of resources and crews from the Palito mine to the Coringa operation also played a crucial role in Serabi Gold's improved financial performance. As crews shifted, development at Coringa surged, with the main Serra ramp reaching level 165m and development on levels 225m, 195m, and 165m. This accelerated mining at Coringa, leading to increased gold production, primarily from levels 290m and 260m. Consequently, total production for the quarter reached 9,489 ounces, a 5.4% increase from Q2 2024.

The completion and commissioning of the classification plant at Coringa significantly enhanced Serabi Gold's operational efficiency and profitability. The plant, which includes a crusher and ore sorter, has improved the process of pre-concentrating mined ore, enabling the company to truck preconcentrated product to the Palito plant 200km to the north. This new arrangement has helped to boost gold production and reduce costs. The ore sorter, in particular, has been instrumental in reducing dilution and increasing the grade of mined ore, leading to improved overall performance and profitability.

Serabi Gold's strategic financial decisions also contributed to the company's EPS growth. The company's cash balance increased to US$20.0M by Q3 2024, up from US$11.6M at the end of 2023, reflecting effective cash management. Key moves included replacing a loan with Itaú Bank, drawing down US$5.0M, and boosting cash flow through inventory realization of approximately US$3.0M. These strategic financial decisions, coupled with operational improvements like the classification plant's progress, drove Serabi Gold's EPS growth.

In conclusion, Serabi Gold's remarkable turnaround in earnings per share is the result of a combination of factors, including operational improvements at the Coringa Gold operation, strategic financial decisions, and favorable market conditions. The company's ability to adapt and respond to changing market dynamics has positioned it for continued growth and success. As Serabi Gold continues to optimize its operations and capitalize on emerging opportunities, investors should remain optimistic about the company's prospects.