Serabi Gold (AIM:SRB, TSX:SBI) shares traded higher in Tuesday’s early deals after a project update revealed a potentially extended lifespan for the miner’s Palito project in Brazil, thanks to a new estimate of the mine’s resources.
Palito proven and probable reserves increased "three-fold", Serabi told investors, increasing to 206,400 ounces from 67,344 (estimated in December 2021). It comes as the estimated grade increased by 11% to 7.78 grams per tonne.
It means the mine presently has more than six years worth of reserves at current production levels, before any of the project's estimated mineral resources are developed.
Previously, in October, Serabi estimated that Palito hosted 377,800 ounces of gold contained within measured and indicated resources, plus 153,900 ounces of inferred resources. October’s measured and indicated resource estimate represented a 50% increase on the prior assessment, Serabi noted.
Chief executive Mike Hodgson described today’s reserves estimate as “an outstanding outcome” and a “significant reward for an aggressive 18-month underground drilling campaign”.
“Palito, like many small vein mines, faces challenges demonstrating longevity,” he said in a statement.
“Serabi has nonetheless established a track record of resource replenishment, as well as a strong history of converting resources to reserves."
Hodgson added: “Palito is a generational deposit, its production having started in 2005 albeit often exhibiting only a two-to-three year reserve life.
“This latest reserve and resource estimate confirms that it remains a long-life asset capable of supporting current production levels for many years.”