Serabi Gold (SRB) Q3 2024 earnings summary

Executive summary

• Stable gold production maintained for 20 years, primarily from Palito, with Coringa transitioning from development to production as the main growth driver over the next two years.

• Revenue for the nine months ended 30 September 2024 was $70.29 million, up from $47.90 million year-over-year, driven by higher gold sales volumes and prices.

• Production expected to rise from 38,000 ounces in 2024 to 60,000 ounces by 2026, funded entirely from internal cash flow without shareholder dilution.

• Ore sorting technology at Coringa and Palito is a game changer, doubling grades and reducing processing costs, enabling efficient trucking and eliminating the need for a new process plant at Coringa.

• Strong ESG credentials with dry stacking of tailings, minimal environmental footprint, and transition to hydro power at Palito.

Financial highlights

• Cash balance reached $20 million by end of Q3 2024, with further growth expected by year-end.

• All-in sustaining costs (AISC) currently in the $1,700s/oz, projected to fall to $1,400–$1,500/oz as production scales up.

• Average gold sales price achieved was $2,338/oz, up 20% from $1,940/oz year-over-year.

• FY 2024 production guidance of 38,000 ounces expected to be met, with Q4 anticipated as the strongest quarter.

• Net profit for the nine months was $17.84 million, up from $4.62 million in the prior year period.

Outlook and guidance

• 2025 production expected to exceed 45,000 ounces, with Coringa ramping up and Palito stable.

• 2026 target of 60,000 ounces, with further upside possible from brownfield exploration.

• Dividend policy under consideration as cash flow and balance sheet strengthen.

• Brownfield exploration to accelerate in 2025, aiming to double Coringa’s resource to 1 million ounces and expand Palito’s resource base.

• Management expects to continue gold production growth at Palito Complex and further ramp up at Coringa, targeting higher output than 2023.