Coringa Gold Project Conditional Acquisition

BRAZIL - Serabi Gold plc reported that it signed a conditional acquisition agreement to acquire 100 per cent. of the issued share capital and inter-company debt of Chapleau Resources Ltd wholly-owned by Anfield Gold Corp, which holds the Coringa gold project  located in the Tapajos gold province in Para, Brazil.

Coringa hosts a mineral resource estimate of 376,000 ounces of gold, including an Indicated Resource of 195,000 ounces of gold with an average grade of 8.4 grammes per tonne ("g/t"), which has been prepared in accordance with the reporting requirements of the standards of NI 43 101.  Estimated mineral reserves included with the mineral resource are 160,000 ounces of gold with an average grade of 8.4g/t. Coringa is located some 70 kilometers to the south-east of the town of Novo Progresso which is approximately 130 kilometers by road to the south of Serabi's current mining operations at Palito.

Serabi will acquire the entire issued share capital of Chapleau together with its outstanding inter-company debts owed to Anfield. Serabi will make an initial payment to Anfield on closing of the transaction of US $5 million in cash. A further US $5 million in cash is payable within three months of Closing and a final payment of US $12 million in cash will be due upon the earlier of either the first gold being produced or 24 months from the date of Closing (both payments together being the "Deferred Consideration"). The total proposed consideration for the acquisition amounts to US $22 million in aggregate. The Board of Serabi considers that the Initial Consideration and the first installment of the Deferred Consideration can be settled from an extension of its existing loan facilities and current cash holdings (which, as at 30 September 2017, were US $9.75 million) and is evaluating its options for the longer term development finance requirements of the Coringa project and the Company's existing organic growth prospects.

Michael Hodgson, CEO of Serabi said, ”Coringa is an advanced gold project that we have been interested to acquire for some time and know well. It always appeared to us to be an excellent bolt-on opportunity to expand Serabi's production and leverage our existing infrastructure and management.  Anfield's recent NI 43-101 compliant feasibility study for Coringa shows robust economics as a stand-alone project and I am sure that, with our experience and resources, we can both reduce the upfront construction and development costs as well as generate operating costs synergies with our existing operations. 

"Last year Anfield undertook a 26,400 meter infill drilling program at Coringa, including 183 exploration holes over the principal Meio, Serra and Galena veins. Anfield also completed the acquisition of a 750 tonnes-per-day crushing, milling and CIP process plant for Coringa and invested in essential initial infrastructure including a 200 person accommodation facility, offices and laboratory facilities.  Anfield's feasibility study projects that Coringa will produce an average of 32,000 ounces over the life of the mineable reserves. This incremental production, over and above our current levels, makes this project work very well for us.  As well as this near-term gold production growth, the feasibility study highlights a number of other areas of geological interest within the tenement holdings of over 13,000 hectares. As we are finding with our Sao Chico and Palito orebodies, I feel there is significant opportunity to expand the resource and extend the life of the operation well into the future. With Anfield now involved in a merger with Trek Mining and Newcastle Gold, we have taken the opportunity to acquire the Coringa project which, whilst no longer core for this enlarged entity, makes clear sense for Serabi offering an obvious opportunity to grow."