Unaudited interim results for the three-and nine-month periods ended 30 September 2024
Nine-month gold production 27,499 ounces, EBITDA $24.7m, cash $20m, profit $17.8m ahead of prior year.
| 9 months to 30 Sep 2024 | Now | Year before | Change |
|---|---|---|---|
| Revenue | £55.1m | £38.5m | +43.0% |
| Operating profit | £16.8m | £4.3m | +288.2% |
| Profit before tax | £16.2m | £4.7m | +247.1% |
| Net income | £14.0m | £3.7m | +276.2% |
| Cash from operations | £18.1m | £10.7m | +69.5% |
| Cash | £15.0m | £12.6m | +19.0% |
Figures as reported, converted to £ where needed – see all financials.
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Serabi (AIM:SRB, TSX:SBI, OTCQX:SRBIF), the Brazilian focused gold mining and development company, is pleased to release its unaudited interim results for the three and nine-month periods ended 30 September 2024.
A copy of the full interim statements together with commentary can be accessed on the Company’s website using the following link:- https://bit.ly/3Z8CJiX
“This has been another excellent quarter for Serabi, in particular for cash generation, said Clive Line, Serabi’s CFO. “The cash balance at the end of September was $20.0 million with $8.0 million generated during the quarter. EBITDA of $11.7 million for the quarter brings EBITDA for the year to date to a total of $24.7 million, a 42 per cent improvement compared with the second quarter.
"We benefited from inventory realisation to the sum of approximately $3.0M, boosting quarter sales, and whilst I do not expect similar additional inventory sales for Q4, I do anticipate cash growth to continue to the end of the year notwithstanding the cyclical effects of tax payments and 13th salary accruals that are due. The ability of the business to produce healthy cash flow is being further supported by the Coringa classification plant which is now operational and in the final stages of commissioning. We are already passing run of mine ore through this plant and will also start to work our way through the lower grade stockpiles that have been accumulated at Coringa. As a result of processing this stockpiled material we hope that this final quarter will continue the pattern of increasing production quarter on quarter that we have so far experienced in 2024.
"During the quarter we announced the results of the Preliminary Economic Assessment for Coringa which indicate an average project AISC of $1,241 over the project life from 1 January 2025 onwards. The full NI 43-101 compliant Technical Report was published on 21 November 2024."
Financial Highlights (all currency amounts are expressed in US Dollars unless otherwise stated)
Gold production for the first nine months of 2024 of 27,499 ounces (2023: 25,262 ounces).
Cash held on 30 September 2024 of $20.0 million (31 December 2023: $11.6 million including US$0.6 million relating to the exploration alliance with Vale).
EBITDA for the nine-month period of $24.7 million (2023: $8.8 million).
Post-tax profit for the nine-month period of $17.8 million (2023: $4.6 million),
Profit per share of 23.55 cents compared with a profit per share of 6.10 cents for the same nine month period of 2023.
Net cash inflow from operations for the nine-month period (after mine development expenditure of US$4.9 million) of US$18.2 million (2023: US$10.7 million inflow, after mine development expenditure of US$2.6 million).
Average gold price of US$2,338 per ounce received on gold sales during the nine month period (2023: US$1,940).
Cash Cost for the nine month period to 30 September 2024 of US$1,405 per ounce (nine months 2023: US$1,253 per ounce).
All-In Sustaining Cost for the nine-month period to 30 September 2024 of US$1,790 per ounce (nine months 2023: US$1,553 per ounce).
Overview of the financial results
In the first nine months of 2024, the Group has reported revenue and operating costs related to the sale of 28,912 ounces in the period (27,499 ounces produced). This compares to sales reported of only 23,733 ounces in the first nine months of 2023. Reported revenues and costs reflect the ounces sold in each period and as a result total costs for the nine-month period are significantly higher than for the corresponding period of 2023.
During the month of January 2024, the Group also completed and drew down a new US$5 million loan with Itaú Bank in Brazil. This new arrangement has an interest coupon of 8.47 per cent and is repayable as a bullet payment on 6 January 2025. This replaced a similar loan arranged with Santander Bank in Brazil that was repaid during the month of February 2024.
Final commissioning of the ore sorter and crushing plant for Coringa is almost complete, with the crushing plant operational during October and the ore-sorter starting up during November. During the remainder of the fourth quarter in addition to passing run of mine ore extracted from Coringa, the Company will also be processing some of the lower grade material that has been stockpiled at Coringa providing an additional boost to gold production in the remainder of the fourth quarter.
Key Financial Information
SUMMARY FINANCIAL STATISTICS FOR THE THREE-AND NINE MONTHS ENDING 30 SEPTEMBER 2024
| 9 months to 30 September 2024 US$ (unaudited) | 9 months to 30 September 2023 US$ (unaudited) | 3 months to 30 September 2024 US$ (unaudited) | 3 months to 30 September 2023 US$ (unaudited) | |
|---|---|---|---|---|
| Revenue | 70,290,641 | 47,897,264 | 27,626,034 | 17,373,682 |
| Cost of sales | (39,840,803) | (34,405,882) | (14,160,734) | (13,341,448) |
| Gross operating profit | 30,449,838 | 13,491,382 | 13,465,300 | 4,032,234 |
| Administration and share based payments | (5,728,359) | (4,702,467) | (1,719,359) | (1,864,200) |
| EBITDA | 24,721,479 | 8,788,915 | 11,745,941 | 2,168,034 |
| Depreciation and amortisation charges | (3,297,323) | (3,409,994) | (1,056,517) | (1,384,957) |
| Operating profit before finance and tax | 21,424,156 | 5,378,921 | 10,689,424 | 783,077 |
| Profit after tax | 17,837,221 | 4,620,779 | 8,615,387 | (359,112) |
| Earnings per ordinary share (basic) | 23.55c | 6.10c | 11.38c | 0.47c |
| Average gold price received (US$/oz) | US$2,338 | US$1,940 | US$2,478 | US$1,930 |
| As at 30 September 2024 US$ (unaudited) | As at 31 December 2023 US$ (audited) | |||
| Cash and cash equivalents | 20,029,407 | 11,552,031 | ||
| Net funds (after finance debt obligations) | 14,007,367 | 5,148,947 | ||
| Net assets | 103,439,147 | 92,792,049 | ||
| Cash Cost and All-In Sustaining Cost (“AISC”) | ||||
| 9 months to 30 September 2024 | 9 months to 30 September 2023 | 12 months to 31 December 2023 | ||
| Gold production for cash cost and AISC purposes | 27,499 ozs | 25,262 ozs | 33,152 ozs | |
| Total Cash Cost of production (per ounce) | US$1,405 | US$1,253 | US$1,300 | |
| Total AISC of production (per ounce) | US$1,790 | US$1,553 | US$1,635 | |
Engage Investor Presentation – 3 December 2024
Shareholders and investors are advised that Mike Hodgson, Chief Executive Officer of the Company will provide a live interactive presentation via the Engage Investor platform, on the 3rd of December at 2:30pm GMT.
Serabi Gold plc welcomes all current shareholders and interested investors to join and encourages investors to pre-submit questions. Investors can also submit questions at any time during the live presentation.
Investors can sign up to Engage Investor at no cost and follow Serabi Gold plc from their personalised investor hub.
Shareholders and investors can register interest in this event using the following link - https://engageinvestor.news/SRB_Ei
Notice
See www.serabigold.com for more information and follow us on twitter @Serabi_Gold
The following information, comprising, the Income Statement, the Group Balance Sheet, Group Statement of Changes in Shareholders’ Equity, and Group Cash Flow, is extracted from the unaudited interim financial statements for the three and nine months to 30 September 2024.
Statement of Comprehensive Income
For the three and nine-month periods ended 30 September 2024.
| For the three months ended 30 September | For the nine months ended 30 September | ||||||
|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | ||||
| (expressed in US$) | Notes | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||
| CONTINUING OPERATIONS | |||||||
| Revenue | 27,626,034 | 17,373,682 | 70,290,641 | 47,897,264 | |||
| Cost of sales | (14,160,734) | (11,769,256) | (39,840,803) | (32,463,690) | |||
| Stock impairment provision | — | — | — | (370,000) | |||
| Depreciation and amortisation charges | 2 | (1,056,517) | (2,957,149) | (3,297,323) | (4,982,186) | ||
| Total cost of sales | (15,217,251) | (14,726,405) | (43,138,126) | (37,815,876) | |||
| Gross profit | 12,408,783 | 2,647,277 | 27,152,515 | 10,081,388 | |||
| Administration expenses | (1,679,357) | (1,934,235) | (5,484,788) | (4,834,129) | |||
| Share-based payments | (65,010) | (52,151) | (183,902) | (138,017) | |||
| Gain on disposal of assets | 25,008 | 122,186 | (59,669) | 269,679 | |||
| Operating profit | 10,689,424 | 783,077 | 21,424,156 | 5,378,921 | |||
| Other income – exploration receipts | 3 | __ | 1,992,344 | 351,186 | 3,042,879 | ||
| Other expenses – exploration expenses | 3 | __ | (1,856,520) | (317,746) | (2,876,431) | ||
| Foreign exchange gain/(loss) | 129,429 | (43,421) | (690,927) | 56,645 | |||
| Finance expense | 4 | (127,729) | (381,478) | (438,032) | (500,588) | ||
| Finance income | 4 | 109,262 | 199,792 | 345,727 | 703,823 | ||
| Profit/(loss) before taxation | 10,800,386 | 693,794 | 20,674,364 | 5,805,249 | |||
| Income tax expense | 5 | (2,184,999) | (1,052,906) | (2,837,143) | (1,184,470) | ||
| Profit/(loss) after taxation | 8,615,387 | (359,112) | 17,837,221 | 4,620,779 | |||
| Other comprehensive income (net of tax) | |||||||
| Exchange differences on translating foreign operations | 808,689 | (2,952,047) | (7,374,025) | 1,751,104 | |||
| Total comprehensive profit/(loss) for the period (1) | 9,424,076 | (3,311,159) | 10,463,196 | 6,371,883 | |||
| Profit/(loss) per ordinary share (basic) | 6 | 11.38c | (0.47c) | 23.55c | 6.10c | ||
| Profit/(loss) per ordinary share (diluted) | 6 | 11.38c | (0.47c) | 23.55c | 6.10c | ||
| Balance Sheet as at 30 September 2024 | |||||||
| (expressed in US$) | As at 30 September 2024 (unaudited) | As at 30 September 2023 (unaudited) | As at 31 December 2023 (audited) | ||||
| Non-current assets | |||||||
| Deferred exploration costs | 20,211,858 | 19,775,603 | 20,499,257 | ||||
| Property, plant and equipment | 56,310,566 | 49,107,705 | 53,340,903 | ||||
| Right of use assets | 4,928,263 | 5,214,315 | 5,316,330 | ||||
| Deferred taxes | 7,110,445 | 1,520,710 | 4,653,063 | ||||
| Taxes receivable | 1,903,307 | 3,891,201 | 1,791,983 | ||||
| Total non-current assets | 90,464,439 | 79,509,534 | 85,601,536 | ||||
| Current assets | |||||||
| Inventories | 12,338,958 | 9,819,171 | 12,797,951 | ||||
| Trade and other receivables | 2,100,956 | 1,579,886 | 2,858,072 | ||||
| Derivative financial assets | — | 197,864 | 115,840 | ||||
| Prepayments and accrued income | 1,633,602 | 1,750,470 | 2,320,256 | ||||
| Cash and cash equivalents | 20,029,407 | 15,352,099 | 11,552,031 | ||||
| Total current assets | 36,102,923 | 28,699,490 | 29,644,150 | ||||
| Current liabilities | |||||||
| Trade and other payables | 10,672,705 | 7,798,873 | 8,626,292 | ||||
| Interest bearing liabilities | 5,886,714 | 6,211,791 | 6,403,084 | ||||
| Accruals | 431,716 | 593,435 | 649,225 | ||||
| Total current liabilities | 16,991,135 | 14,604,099 | 15,678,601 | ||||
| Net current assets | 19,111,788 | 14,095,391 | 13,965,549 | ||||
| Total assets less current liabilities | 109,576,227 | 93,604,925 | 99,567,085 | ||||
| Non-current liabilities | |||||||
| Trade and other payables | 3,676,181 | 3,884,102 | 3,960,920 | ||||
| Interest bearing liabilities | 135,326 | 304,262 | 150,224 | ||||
| Deferred tax liability | — | 130,967 | — | ||||
| Provisions | 2,325,573 | 1,252,631 | 2,663,892 | ||||
| Total non-current liabilities | 6,137,080 | 5,571,962 | 6,775,036 | ||||
| Net assets | 103,439,147 | 88,032,963 | 92,792,049 | ||||
| Equity | |||||||
| Share capital | 11,213,618 | 11,213,618 | 11,213,618 | ||||
| Share premium reserve | 36,158,068 | 36,158,068 | 36,158,068 | ||||
| Option reserve | 359,475 | 116,246 | 175,573 | ||||
| Other reserves | 17,609,380 | 16,167,780 | 15,960,006 | ||||
| Translation reserve | (69,154,766) | (64,525,667) | (61,780,741) | ||||
| Retained surplus | 107,253,372 | 88,902,918 | 91,065,525 | ||||
| Equity shareholders’ funds | 103,439,147 | 88,032,963 | 92,792,049 | ||||
| Statements of Changes in Shareholders’ Equity | |||||||
| For the nine-month period ended 30 September 2024 | |||||||
| (expressed in US$) | |||||||
| (unaudited) | Share capital | Share premium | Share option reserve | Other reserves (1) | Translation reserve | Retained Earnings | Total equity |
| Equity shareholders’ funds at 31 December 2022 | 11,213,618 | 36,158,068 | 1,324,558 | 14,459,255 | (66,276,771) | 84,644,335 | 81,523,063 |
| Foreign currency adjustments | — | — | — | — | 1,751,104 | — | 1,751,104 |
| Profit for the period | — | — | — | — | — | 4,620,779 | 4,620,779 |
| Total comprehensive income for the period | — | — | — | — | 1,751,104 | 4,620,779 | 6,371,883 |
| Transfer to taxation reserve | — | — | — | 1,708,525 | — | (1,708,525) | — |
| Share Options Expired | — | — | (1,346,329) | — | — | 1,346,329 | — |
| Share incentives expense | — | — | 138,017 | — | — | — | 138,017 |
| Equity shareholders’ funds at 30 September 2023 | 11,213,618 | 36,158,068 | 116,246 | 16,167,780 | (64,525,667) | 88,902,918 | 88,032,963 |
| Foreign currency adjustments | — | — | — | — | 2,744,926 | — | 2,744,926 |
| Profit for the period | — | — | — | — | — | 1,954,833 | 1,954,833 |
| Total comprehensive income for the period | — | — | — | — | 2,744,926 | 1,954,833 | 4,699,759 |
| Transfer to taxation reserve | — | — | — | (207,774) | — | 207,774 | — |
| Share Options Expired | — | — | — | — | — | — | — |
| Share incentives expense | — | — | 59,327 | — | — | — | 59,327 |
| Equity shareholders’ funds at 31 December 2023 | 11,213,618 | 36,158,068 | 175,573 | 15,960,006 | (61,780,741) | 91,065,525 | 92,792,049 |
| Foreign currency adjustments | — | — | — | — | (7,374,025) | — | (7,374,025) |
| Profit for the period | — | — | — | — | — | 17,837,221 | 17,837,221 |
| Total comprehensive income for the period | — | — | — | — | (7,374,025) | 17,837,221 | 10,463,196 |
| Transfer to taxation reserve | — | — | — | 1,649,374 | — | (1,649,374) | — |
| Share incentives expense | — | — | 183,902 | — | — | — | 183,902 |
| Equity shareholders’ funds at 30 September 2024 | 11,213,618 | 36,158,068 | 359,475 | 17,609,380 | (69,154,766) | 107,253,372 | 103,439,147 |
- Other reserves comprise a merger reserve of US$361,461 and a taxation reserve of US$17,247,919 (31 December 2023: merger reserve of US$361,461 and a taxation reserve of US$15,598,545).
Condensed Consolidated Cash Flow Statement
For the three and nine-month periods ended 30 September 2024
| For the three months ended 30 September | For the nine months ended 30 September | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| (expressed in US$) | (unaudited) | (unaudited) | (unaudited) | (unaudited) |
| Post tax profit/(loss) for period | 8,615,387 | (359,112) | 17,837,221 | 4,620,779 |
| Depreciation – plant, equipment and mining properties | 1,056,517 | 2,957,149 | 3,297,323 | 4,982,186 |
| Provision for inventory impairment | — | — | — | 370,000 |
| Gain on asset disposals | (25,008) | (122,186) | 59,669 | (269,679) |
| Net financial expense | (110,962) | 225,107 | 749,792 | (259,880) |
| Provision for taxation | 2,184,999 | 1,052,906 | 2,837,143 | 1,184,470 |
| Share-based payments | 65,010 | 52,151 | 183,902 | 138,017 |
| Taxation paid | (347,589) | (415,722) | (789,287) | (811,612) |
| Interest paid | (10,091) | (22,900) | (39,599) | (408,714) |
| Foreign exchange (loss) / gain | (291,702) | (45,098) | (343,986) | (117,170) |
| Changes in working capital | ||||
| Decrease/(increase) in inventories | 217,474 | (696,001) | (1,049,888) | (696,782) |
| Decrease/(increase)/decrease in receivables, prepayments and accrued income | 1,238,492 | (1,477) | (1,002,244) | 2,763,565 |
| Increase/(decrease) in payables, accruals and provisions | 979,209 | 1,550,835 | 1,384,012 | 1,798,796 |
| Net cash inflow from operations | 13,571,736 | 4,175,652 | 23,124,058 | 13,293,976 |
| Investing activities | ||||
| Purchase of property, plant and equipment and assets in construction | (2,219,242) | (706,419) | (6,231,132) | (1,686,505) |
| Mine development expenditure | (1,977,182) | (1,274,305) | (4,913,351) | (2,613,395) |
| Geological exploration expenditure | (922,400) | (101,611) | (1,835,856) | (459,035) |
| Pre-operational project costs | (393,044) | — | (865,728) | — |
| Proceeds from sale of assets | 21,474 | 123,408 | 73,955 | 314,923 |
| Interest received | 109,262 | 101,574 | 338,895 | 181,373 |
| Net cash outflow on investing activities | (5,381,132) | (1,857,353) | (13,433,217) | (4,262,639) |
| Financing activities | ||||
| Receipt of short-term loan | — | — | 5,000,000 | 5,000,000 |
| Repayment of short-term loan | — | — | (5,000,000) | (5,096,397) |
| Payment of finance lease liabilities | (210,366) | (295,583) | (708,816) | (906,565) |
| Net cash (outflow) / inflow from financing activities | (210,366) | (295,583) | (708,816) | (1,002,962) |
| Net increase / (decrease) in cash and cash equivalents | 7,980,238 | 2,022,716 | 8,982,025 | 8,028,375 |
| Cash and cash equivalents at beginning of period | 12,041,017 | 13,285,447 | 11,552,031 | 7,196,313 |
| Exchange difference on cash | 8,152 | 43,936 | (504,649) | 127,411 |
| Cash and cash equivalents at end of period | 20,029,407 | 15,352,099 | 20,029,407 | 15,352,099 |
Notes
Basis of preparation
Basis of preparation
These interim condensed consolidated financial statements are for the three and nine month periods ended 30 September 2024. Comparative information has been provided for the unaudited three and nine month periods ended 30 September 2023 and, where applicable, the audited twelve month period from 1 January 2023 to 31 December 2023. These condensed consolidated financial statements do not include all the disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2023 annual report.
Accounting standards, amendments and interpretations effective in 2024
The following Accounting Standards have not yet been ratified in UK law but are expected to be ratified during 2024. The Group expects to make appropriate compliant disclosures in its Annual Report for the year needed 31 December 2024.
IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information
IFRS S2 Climate-related Disclosures
Management do not consider that the following other amendments to existing standards are applicable to the current operations of the Group or will have any material impact on the financial statements.
Lease Liability in a Sale and Leaseback (amendments to IFRS 16)
Supplier Finance Arrangements (amendments to IAS 7 and IFRS 17))
Going concern
On 30 September 2024 the Group held cash of US$20.03 million which represents an increase of US$8.45 million compared to 31 December 2023.
On 7 January 2024, the Group completed a US$5.0 million unsecured loan arrangement with Itaú Bank in Brazil. The loan is repayable as a bullet payment on 6 January 2025 and carries an interest coupon of 8.47 per cent. The proceeds raised from the loan are being used for working capital and secure adequate liquidity to repay a similar arrangement which was repaid on 22 February 2024.
Depreciation and amortisation
Whilst the Coringa Gold Project has been in production for some time, it is still in a development and ramp-up stage and has not yet attained the operational scale that the Board considers is required to be considered in Commercial Production. As a result no amortisation charge in respect of the underlying mine asset costs has been reflected in the financial statements to date.
- Other Income and Expenses
- Finance expense and income
| 3 months ended 30 September 2024 (unaudited) | 3 months ended 30 September 2023 (unaudited) | 9 months ended 30 September 2024 (unaudited) | 9 months ended 30 September 2023 (unaudited) | |
|---|---|---|---|---|
| US$ | US$ | US$ | US$ | |
| Loss on revaluations of hedging derivatives | — | (226,883) | — | — |
| Interest expense on short term loan | (93,486) | (106,197) | (335,563) | (349,515) |
| Interest expense on trade finance | (22,120) | (24,267) | (54,333) | (66,158) |
| Interest expense on finance leases | — | — | — | — |
| Total Financial expense | (12,123) | (24,131) | (48,136) | (84,915) |
| (127,729) | (381,478) | (438,032) | (500,588) | |
| Gain on revaluation of hedging derivatives | — | — | — | 385,512 |
| Realised gain on hedging derivatives | — | 98,217 | 6,832 | 136,938 |
| Interest income | 109,262 | 101,575 | 338,895 | 181,373 |
| Total Financial income | 109,262 | 199,792 | 345,727 | 703,823 |
| Net finance (expense) / income | (18,467) | (181,686) | (92,305) | 203,235 |
Taxation
The Group has recognised a deferred tax asset to the extent that the Group has reasonable certainty as to the level and timing of future profits that might be generated and against which the asset may be recovered. The deferred tax liability arising on unrealised exchange gains has been eliminated in the nine-month period to 30 September 2024 reflecting the movement in the Brazilian Real exchange rate at the end of the period and resulting in deferred tax income of US$946,220 (nine months to 30 September 2023 – income of US$23,113).
The Group has also incurred a tax charge in Brazil for the six-month period of US$3,783,403 (nine months to 30 September 2023 tax charge - US$1,207,583).
Earnings per Share
| 6 months ended 30 June 2024 (unaudited) | 6 months ended 30 June 2023 (unaudited) | 3 months ended 30 June 2024 (unaudited) | 3 months ended 30 June 2023 (unaudited) | |
|---|---|---|---|---|
| Profit/(loss) attributable to ordinary shareholders (US$) | 8,615,387 | (359,112) | 17,837,221 | 4,620,779 |
| Weighted average ordinary shares in issue | 75,734,551 | 75,734,551 | 75,734,551 | 75,734,551 |
| Basic profit/(loss) per share (US cents) | 11.38c | (0.47c) | 23.55c | 6.10c |
| Diluted ordinary shares in issue (1) | 75,734,551 | 75,734,551 | 75,734,551 | 75,734,551 |
| Diluted profit/(loss) per share (US cents) | 11.38c | (0.47c) | 23.55c | 6.10c |
- On 30 September 2024 there were 2,814,541 conditional share awards in issue (30 September 2023 – 2,075,400). These are subject to performance conditions which may or not be fulfilled in full or in part. These CSAs have not been included in the calculation of the diluted earnings per share.
- Post balance sheet events
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