Interview with Mike Hodgson, CEO of Serabi Gold

Our previous interview: https://www.cruxinvestor.com/posts/se...

Recording date: 16th April 2024

Serabi Gold (LSE: SRB, TSX: SBI), led by CEO Mike Hodgson, is making steady progress advancing its two Brazilian gold assets, the Palito Mining Complex and Coringa Project, both located in the prolific Tapajos region. Despite facing permitting delays and financial constraints in recent years, Serabi has persevered and is now well-positioned to deliver significant production growth.

A key tailwind currently is the surging gold price, not just in US dollars but also Brazilian Reais. At over R$12,000/oz, gold is trading at all-time highs in Brazil. With the majority of Serabi's costs in Reais, this provides a huge margin expansion opportunity. "If gold price goes up in Reais, it goes right to the bottom line," explains CEO Mike Hodgson.

This is timely as Serabi ramps up production, especially at Coringa. Key milestones are the installation of a crushing circuit in early Q3 and the addition of an ore sorter by end of Q3. The ore sorter will allow processing of stockpiles to produce a high-grade plant feed. "In Q4 we're going to have a bumper quarter with lots of stockpile to put through that ore sorter," notes Hodgson.

Looking ahead, Serabi sees a clear pathway to grow to 60,000 oz/year and potentially beyond. The keys are the Coringa ramp-up, debottlenecking and expansion at Palito, and modest capital expenditures. An updated resource, reserve, and PEA is planned for Q3 to support this.

While Serabi's near-term focus is on production growth, it also sees strong potential for new discoveries nearby. A recent 12-month exploration alliance with Vale allowed Serabi to advance several promising gold prospects with $2.5M of funding. Targets like Calico have the potential to become new Palito-type high-grade deposits.

The investment case for Serabi is compelling:

- Proven management team with deep Brazilian experience
- Path to 60,000 oz/year production from two mines
- Exposure to record high gold prices in Brazilian Reais
- Pending Q3 permit and PEA milestones to de-risk assets
- Strategic land position in prolific gold belt with discovery potential
- Increasingly self-funded growth from expanding margins
- While Serabi has overcome challenges in recent years, it is now in a strong position to realize its projects' potential. "All being well, we'll have a pivotal Q3 with the PEA done, full permits received, and the ore sorter switched on," concludes Hodgson. "That will be a real milestone for us."

For investors seeking a growing gold producer with a clear path to production and margin growth, Serabi Gold presents an attractive opportunity. With key catalysts pending, the company is poised for an exciting year ahead.

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