Serabi Gold (AIM:SRB, TSX:SBI) PLC shares fell 19% to 27.55p after a media investigation accused the company of mining gold in the Amazon rainforest on disputed land, with licences contested by state agencies and before a nearby Indigenous tribe has been consulted.
Federal land reform agency Incra also says that the mine was originally developed through a deal with alleged land grabbers, according to a report from Greenpeace’s Unearthed team, and the UK’s Guardian and Brazil’s Sumauma newspapers.
The Coringa mine, where Serabi trucked out 8,005 ounces of gold in the past quarter, is sited inside a sustainable farming settlement owned by Incra, which said it has not authorised the mining and that, despite a high court ruling in 2021 that no more licences should be given until an Indigenous impact study is complete, two government agencies renewed existing licences on the site last year.
Serabi told reporters it is “completely comfortable” with its legal position and complies with all the necessary permits for Coringa.
The AIM and TSX-listed company also issued a trading statement today, where it noted that Brazilian law provides for an automatic extension of the trial mining licence or Guia de Utilização (GUIA) and the GUIA Operating Licence (LOG) if a formal renewal has not been issued at the date of their initial expiry and provided that renewal applications have been submitted prior to the expiry date.
The automatic 12-month extension period for the GUIA currently runs until 8 February 2024, it said, which takes account of a previous six-month pandemic-related extension to the original expiry dates for the GUIA and LOG of 8 August 2022.
Chief executive Mike Hodgson said completion and submission of the Indigenous Impact Study (ECI) to the FUNAI indigenous peoples body is “imminent”.
Last month, the company said the report will be presented to indigenous communities for review and approval, with meetings expected to take place in “late April, early May”.
“Following approval by the indigenous communities, the ECI will be shared with FUNAI for final approval, which we believe should take place within a further period of one month,” it said at the time.
Hodgson said in today’s statement that the performance in the first three months of the year has been “very satisfying” and that development of the pilot mine at Coringa is “continuing as planned” and the grades of gold have been “spectacular”.