Business
Announcement of Strategic Review
Announcement of Strategic Review.
About this update from Serabi Gold Plc
[{"type":"text","content":"\n \n\n\n\nPRESS RELEASE - 17th September 2008\n\nSERABI MINING plc (\"Serabi\" or \"the Company\")\n\nAnnouncement of Strategic Review\n\nSerabi Mining plc, the AIM listed Brazilian gold mining company,\nannounces that following a review of the performance of its Palito\nMine the Board of Directors are considering a number of strategic\noptions for the Company.\n\nAfter an improvement in gold production levels at the Palito Mine\nduring June and July of this year following the commissioning of new\nequipment, the Board was hopeful that operations would return to\nforecast production levels. However, mine production has fallen\nsignificantly below target levels for the month of August and the\ninitial weeks of September, prompting the decision to undertake the\nperformance review. This review, carried out by the Company's Chief\nExecutive, has concluded that the mine is not currently able to\nmaintain the levels of development and production required by the\nCompany. Performance was adversely impacted earlier this year by\ndelays in the delivery of new equipment combined with abnormal levels\nof breakdown in existing plant and equipment, which limited mine\ndevelopment activities. This in turn reduced production to levels\nmaterially below management targets.\n\nIn addition it has proved difficult to recruit, train and retain\nmining staff with the necessary level of expertise and experience in\nnarrow vein mining. Production has also been impacted by the\ndeparture of a number of key equipment operators over the past two\nmonths.\n\nThe Board had been confident that, as described in the Q2 Investor\nUpdate released on 30 July, a return to target production levels\nwould be possible once the mine was fully equipped and that the\noperations would generate the cash-flows required to sustain the\nCompany's development strategy. However continued production\nshortfalls along with the reduced levels of development in the first\nhalf of this year, as described above, have materially impacted the\nfinancial position of the company. The continuing unbudgeted monthly\nlosses have required further and unforecast injections of working\ncapital in order to sustain the mine operation.\n\nThe review of performance led the Directors to conclude that\noperations are now approaching the point where it would become\nnecessary to enter a significa...