Mr. Michael Hodgson reports

IMPROVED PRODUCTION FOR SECOND QUARTER OF 2023

Serabi Gold PLC has released operational results for the second quarter of 2023 and provided a review of its development and exploration activities.

Highlights:

• Second quarter gold production totalled 8,518 ounces, a 6-per-cent improvement on the first quarter in 2023;
• Mined grades were 6.94 grams per tonne gold, the highest since the third quarter of 2021; mined grades at Palito averaged 6.68 grams per tonne gold;
• Coringa mine development continued to progress well with mined grades of 7.83 grams per tonne gold; the development ore transported to Palito plant contributed over 2,000 ounces of gold production for the quarter;
• The Vale exploration alliance is progressing well with seven diamond drill holes for 3,200 metres completed at the Matilda prospect; a number of other regional targets have also tested with total drilling exceeding 5,500 metres; assay results from Matilda and the other targets are anticipated within the coming weeks;
• Cash held at June 30, 2023, was $13.3-million (U.S.) ($12.3-million (U.S.) net of cash held under the Vale exploration alliance) compared with $7.2-million (U.S.) at Dec. 31, 2022.

Mike Hodgson, chief executive officer of Serabi, commented: "An excellent second quarter to follow the first quarter production of 8,005 ounces keeps the company on course to meet its guidance for this year of between 33,500 to 35,000 ounces.

"The quarter saw improved grades coming from Palito, along with continued high-grade development ore from Coringa, which resulted in a plant feed grade of 6.84 grams per tonne gold, which we have not achieved since the third quarter of 2021.

"Mine development at Coringa continued to be very successful. The payability of the development is quite remarkable, with very limited low-grade or waste zones being encountered as the orebody is developed. The mine is still in development and only operating under the Guia trial mining licence. Even so, the small volumes of ore that are being extracted and transported to the Palito plant are proving to be very beneficial, with over 2,000 ounces of gold production attributed to Coringa in the second quarter.

"On the exploration front, the relationship with Vale is working well and the first phase of drilling was completed on the Matilda copper porphyry prospect with seven holes now drilled. Samples have gone for multielement external assaying, and we eagerly await the results. With three rigs on site, the focus has shifted to other regional targets, with a second round of drilling planned at Matilda when the assays from phase 1 have been received and the geological picture updated.

"Management remains hopeful that we are entering the final stages of satisfying the requests of the court and public prosecutor regarding the future licensing of Coringa and, in particular, that the project presents minimal impact to the environment and communities that live nearby. The indigenous study report (ECI) was completed in April. It has been circulated through the technical committees of the indigenous communities with comments received and being incorporated into a revised draft. In parallel, independent consultations have been carried out with the indigenous communities to seek project support, which have progressed very well. With the demands fulfilled, this should result in a cancellation of the court decision and open the door for SEMAS, the environmental agency, to issue the installation licence (LI) shortly thereafter."

Operational results

Total production for the second quarter of 2023 was 8,518 ounces. Coringa contributed 2,186 ounces to this total.

Total ore mined from the Palito complex during the quarter was 31,652 tonnes at 6.68 grams per tonne compared with 29,691 tonnes at 6.33 grams per tonne of gold for the first quarter of 2023. Development mining operations at Coringa generated a total of 9,370 tonnes at 7.83 grams per tonne in the quarter.

A total of 41,116 tonnes of ROM (run of mine) ore were processed through the Palito plant during the quarter, with an average grade of 6.84 grams per tonne of gold, compared with 39,004 tonnes at 6.75 grams per tonne in the first quarter of 2023. This included 9,215 tonnes of Coringa ore at a feed grade of 7.59 grams per tonne gold.

A total of 2,469 metres of horizontal development have been completed at Palito during the quarter, of which 1,619 metres were ore development. The balance is the ramp, crosscut and stope preparation development. Horizontal development at Coringa totalled 508 metres, of which 304 metres were in ore.

Exploration update

The Vale exploration alliance, signed in May, 2023, is progressing well with exploration activity across a number of key target areas of the Palito tenement package. This activity includes:

• Three contractor diamond drill rigs in operation having completed a total of 21 holes, seven of which were testing the Matilda copper porphyry target. The total metres drilled now exceed 5,500 metres of the planned 15,000-metre program.
• Samples have been sent to an independent laboratory for multielement assays with the initial results from Matilda expected within the coming weeks.
• Systematic soil sampling and auger drilling are being undertaken on areas not previously tested. Soils are being initially tested with a hand-held XRF (X-ray fluorescence) and delivering some interesting results. Following the receipt of results from the external laboratory, further mapping activities and a drilling program will be considered.

The initial phase of drilling at Matilda was designed to test the footprint of the target. Logging of the core suggests that a number of the holes intersected mineralization similar to that identified in the 2022 program. Other holes appear to be more weakly mineralized whilst two holes returned broad zones with what visually appears to be higher-grade mineralization, comparable with the highest-grade zones from the 2022 program where grades of 0.4 per cent to 0.7 per cent copper equivalent were intersected (see press release dated July 5, 2022). Assay results from an independent laboratory are awaited and will be announced in due course. Following full geological analysis of these assay results, a second phase of drilling will commence at Matilda. This will also be guided by a ground geophysics survey that has been programmed to support further geological interpretation.

The drill rigs have moved to other targets, including:

• Barbara and Maria Loura which are potential extensions of or parallel structures to the Sao Chico orebody;
• Cinderella, which is the site of major historic artisanal activity and has a strong gold-in-soil anomaly over a broad area;
• Calico, which is a target of comparable size with Matilda with a strong gold-in-soil anomaly but no historic drilling.

The regional exploration effort of soil sampling and auger drilling has been successful in identifying a number of new high-priority targets using a hand-held XRF device to generate preliminary results while external assays are pending. These targets include a significant copper-in-soil anomaly to the north of Matilda that will require follow-up mapping and potentially drilling later in the program. With 1,450 soil samples collected and 308 auger drill holes completed, these programs are 53 per cent and 72 per cent completed, respectively.

Finance update

Cash balances at the end of June, 2023, were $13.3-million (U.S.), which includes $940,000 (U.S.) of funds held for the Vale exploration alliance. This compares with a cash balance of $7.2-million (U.S.) at the end of December, 2022, and $13.9-million (U.S.) at March 31, 2023, which included a $5-million (U.S.) loan for a 12-month period from Santander Bank in Brazil received at the end of February, 2023. During May, 2023, the group repaid the $5-million (U.S.) loan facility that it had taken out with Itau BBA bank in May, 2022. Net cash attributable to the group has increased by $5.1-million (U.S.) during the first six months of the year.

The person who arranged for the release of this announcement on behalf of the company was Clive Line, director.

Qualified person statement

The scientific and technical information contained within this announcement has been reviewed and approved by Michael Hodgson, a director of the company. Mr. Hodgson is an economic geologist by training with over 30 years of experience in the mining industry. He holds a BSc (honours) in geology (University of London) and an MSc in mining geology (University of Leicester) and is a fellow of the Institute of Materials, Minerals and Mining and a chartered engineer of the Engineering Council of the United Kingdom, recognizing him as both a qualified person for the purposes of National Instrument 43-101 and by the AIM (Alternative Investment Market) guidance note on mining and oil and gas companies dated June, 2009.

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