Serabi Mining (AIM: SRB), which owns and operates the Palito Gold Mine in Northern Brazil, announced its first ore reserve for the mine today.
The report was prepared after Serabi conducted extensive surface and underground drilling across twenty-five mineralised structures, and included three new structures discovered in the past 12 months. The total mineral resource (inferred, indicated and measured) was calculated to be 0.67 million ounces of gold, with a total proved and probable ore reserve of 187,538 ounces gold equivalent, or 732,500 tonnes @ 7.34 grams per tonne gold and 0.22% copper. The mineral resource was calculated using a 1 gram per tonne cut-off grade.
Not surprisingly, Serabi also confirmed that most of the structures still remained open in several directions, due to the nature of the typically narrow high grade gold veins, drilling out a vein in its totality does not make economic sense. Instead, mines like Palito tend to keep 3 to 5 years of reserves drilled out for mine planning, but do not spend additional capital drilling further out as it can become costly. The current ore reserve gives Serabi four years of mine life.
Mike Hodgson, CEO of Serabi Mining said:
"This is the first disclosure of an ore reserve at the Palito Operations, and it better positions the company to plan future production, and at current production rates indicates a minimum approximate mine life of a further 4 years.
Meanwhile, exploration success is continuing at Palito and significant drilling undertaken since the 31 March review demonstrates strike and dip extensions of known orebodies already in production at the mine and we are therefore confident that both the mineral resource and ore reserve can continue to grow. As all the known structures at Palito are sub-vertical dipping mineralized veins, it makes commercial sense to drill these structures to a limited depth and then further evaluate from underground mine workings at a later date once the relevant upper levels have been developed. It is therefore unrealistic to drill out these types of deposits to completion but it is not unusual to see them continue to operate over many years."