Exploration Release

 

Serabi Mining plc (SRB: AIM) announces further exploration success at the Palito mine and adjacent Jardim do Ouro district.  

Since April 2007, exploration activity around the Palito mine / Jardim do Ouro concessions has been accelerated following a number of key successes (see Exploration Update press release, dated June 4).  These have included excellent drill results at Palito West, the discovery and continued success at the Ruari's Ridge prospect and successful FLEM geophysical surveys at Palito South, and most spectacularly at Chico da Santa.

 

The recent discoveries at the Ruari's Ridge and Chico da Santa prospects and extended success at Palito West  will hopefully provide the basis for near term production expansion.  Detailed evaluation of these satellites is now underway, through a 12,000 metre drilling programme, trenching and aerial geophysics.  This work will culminate in an updated geological resource at the year-end, together with a new mine production plan.   

 

 

 

Located 200 metres to the south-west of the Palito mine, Palito West was reported in the Exploration Update of March 26.  Since then, additional drilling has been ongoing and assays received.  Previous drilling and sampling defined Palito West mineralisation as a single feature over 80 metres strike length and to a vertical depth of 50 metres.  The previously reported holes were part of a drill programme designed to test the zone to the south in preparation for an "on-lode" development.

 

Recent significant assays returned are as follows:

Hole	From (m)	To (m)	Interval (m)	Au(g/t Au)	Cu (%)
PDD0281*	23.54	24.54	1.00	24.64	0.63
	40.40	41.30	0.75	1.81	0.11
	88.70	91.62	2.92	1.19	0.04
PDD0298	33.73	34.40	0.67	3.18	0.65
PDD0300	38.75	40.24	1.49	24.50	0.41
PDD0302	49.33	50.00	0.67	66.30	2.00
PDD0305	44.82	45.44	0.62	96.50	2.20

(* previously reported with results from Palito Laboratory only)

 

The intersections in PDD0298, PDD0300, PDD0302 and PDD0305 and in PDD0281 of 2.92m @ 1.19g/t gold represent intersections on the interpreted main Palito West Zone.  Two recent holes, PDD0334 and PDD0339 have intersected excellent visual sulphide rich mineralisation, which fit the Palito West projected position and extend the strike length to at least 200 metres.  A strong geophysical electromagnetic (EM) conductor a further 200 metres south-east of PDD0334 indicates further strike extension potential.     

 

Interpretation also suggests a second parallel lode to Palito West approximately 40 metres to the north-east, which returned intercepts in PDD0281 of 1.0 metre @ 24.64g/t gold and 0.63% copper and includes historical intercepts in PDD0270 of 0.66 metre @ 13.62 g/t gold.  

 

Following these encouraging results the potential to expand the Palito West resource is being accelerated to optimise capital development planning required to bring the deposit into production as quickly as possible.  Initial detailed follow-up consists of an enlarged programme of 40 x 40 metre spaced resource drilling now designed to investigate a target zone of 200 meters strike and 150 meters depth, a substantially larger zone than first anticipated.  On surface the mineralised zone is being exposed for surface sampling along the strike length.  This will also provide early production in Q4 of this year.

 

 

 

 

The discovery of significant mineralization at Ruari's Ridge was reported in the Exploration Update, dated June 4.  Initial drilling and trenching highlighted up to four mineralised zones, with structural continuity for 3 zones of up to 900 metres and 300 metres vertical depth, of which the most prominent zone has been confirmed on surface by trenches for over 600 metres.  Following these discoveries a detailed exploration and evaluation drilling programme has commenced over a central targeted area with a strike of 600 metres and 150 metres vertical depth.

 

Thirty three (33) diamond drill holes have been completed (8,000 metres), 30 assayed to date, 3 awaiting assay and sixteen (16) trenches have been cut.  The significant results returned from this campaign are listed below. A further 4,000 metres (15 holes) are now planned to assess the strike extension.  The revised target block will be drilled on a 50 x 50 metre grid, to investigate the top 150 metres, with deeper holes below the top 150 metres every 100 to 150 metres along strike.

Ruari's Ridge Significant Drill Sampling Results include:

Hole	From (m)	To (m)	Interval (m)	Au    (g/t )	Cu      (%)
PDD0315	83.93	84.68	0.75	1.52	0.04
PDD0317	54.48	55.48	1.00	2.35	0.13
PDD0318	55.06	57.95	2.89	4.58	0.60
	135.92	136.47	0.55	2.47	0.00
	195.30	195.89	0.59	1.44	0.03
PDD0322	155.10	156.18	1.08	3.47	0.02
	156.85	157.36	0.51	1.44	0.04
	206.75	207.38	0.63	2.56	0.11
PDD0323	81.00	82.22	1.22	2.96	0.08
PDD0325	42.07	42.82	0.75	1.22	1.10
	85.59	86.10	0.51	2.41	0.03
	193.32	194.28	0.96	10.60	0.19
	199.33	199.84	0.51	2.32	0.04
	205.00	205.70	0.70	7.54	0.51
PDD0329	33.56	34.75	1.19	1.08	0.01
PDD0331	23.26	24.03	0.77	1.42	0.10
PDD0332	96.55	97.04	0.49	1.35	0.03

 

Ruari's Ridge Significant Trench Sampling Results include:

Hole	From (m)	To (m)	Interval (m)	Au    (g/t )	Cu      (%)
TC 39	15.00	21.00	6.00	7.16	0.01
including	18.00	20.00	2.00	14.54	0.02
TC 38	35.00	40.00	5.00	1.41	0.01
including	38.00	39.00	1.00	4.03	0.01
TC 34	17.30	18.75	1.45	1.11	0.01
	33.60	34.10	0.50	12.24	0.01
TC 32	5.75	12.00	6.25	1.40	0.02
	42.00	43.00	1.00	1.26	0.01

(Trench samples have been assayed at the Palito Mine Laboratory only.)

 

While the zones continue to exhibit structural continuity to the north-west, gold and copper values decrease, eventually becoming barren some 150 metres north of the airstrip.  To the south-east the zones remain very open.  At times, though massive sulphides and quartz are absent, alteration and disseminated sulphides are always present in the structures. The current southerly extension approximately 600 metres south of the runway has good structure, and remains open with the possibility of continuity towards a geochemistry anomaly 300 metres further south.  There is currently no EM survey to the south.

 

Results have been sufficiently encouraging for an exploration adit "in-ore" to start at the northern extent of the zone.  This adit will be mined at the 250m elevation and will be driven south to investigate in detail the economic viability of the mineralisation.

 

 

 Recent FLEM results in the Chico da Santa and Palito South areas highlight strong correlation with known areas of mineralisation

 

 

 

Interpretation based on 11 older drill holes had shown three, high-grade structures at Chico da Santa with limited strike and dip.  During the second quarter this year Serabi undertook a FLEM survey over the property, with extremely encouraging results that now suggest Chico da Santa is a much more significant project than previously thought.  As a result, exploration activity has accelerated here dramatically.

 

Current Status:  

Hole	From (m)	To (m)	Interval (m)	Au    (g/t )	Cu      (%)
PDD0303*	63.28	64.20	0.92	1.07	0.03
	73.81	74.37	0.56	10.20	0.39
PDD0308*	78.40	79.04	0.64	0.60	0.04
	136.45	137.00	0.55	43.20	1.40
PDD0320	58.16	60.57	2.41	19.79	1.73
PDD0328	70.55	73.00	2.45	2.37	0.03
	76.04	76.59	0.55	6.14	0.03
PDD0335	103.73	104.70	0.67	5.92	0.60
	120.42	120.94	0.52	1.16	0.05
PDD0341	188.62	189.96	1.34	3.63	0.61
Including	189.42	189.96	0.54	6.70	0.68
RC-CS-009	39.00	44.00	5.00	3.33	0.30
Including	40.00	41.00	1.00	13.30	0.81
RC-CS-016	1.00	4.00	3.00	1.02	0.01
	6.00	8.00	2.00	1.51	0.01
RC-CS-018	34.00	35.00	1.00	1.42	0.01
RC-CS-020	29.00	31.00	2.00	2.37	0.12
RC-CS-021#	79.00	81.00	2.00	10.27	0.33
RC-CS-022#	28.00	29.00	1.00	9.56	0.01
RC-CS-023#	8.00	11.00	3.00	1.30	0.01
	71.00	72.00	1.00	1.40	0.06
	79.00	80.00	1.00	1.87	0.02
	101.00	102.00	1.00	1.22	0.14

((*) previously reported with results from Palito Laboratory only)

((#) full results of holes pending)

 

Trench	From (m)	To (m)	Interval (m)	Au    (g/t )	Cu      (%)
TC 40	10.95	12.45	1.50	6.58	0.01
TC 42	5.00	6.90	0.90	91.70	0.12

 (Trench samples have been assayed at the Palito Mine Laboratory only.)

 

 

The PMZ will continue to be the 'backbone' of production for the coming year.  The decline ramp is now developing below the 144 metre level, and with levels 210, 192, 178, 163 and now 144metre levels in various stages of production and development, the PMZ has over one year of production stoping 'blocked out'.  Further ore lies in the existing levels and planned levels to the 100 meter elevation.  In the southern half of the mine, there are drill indicated and drill inferred resources to the 50 metre elevation i.e. approximately 150 metres vertical depth.  It is envisaged the decline will be developed to the 100 metre level by Q1 2008.  During Q4 2007 and Q1 2008, deep drilling to test the down dip extensions of the PMZ will be undertaken to test the potential

extension of the PMZ to the 0 m level and also to optimize the capital development to that level.  Subject to the continuity of the resource at depth, it is estimated there is approximately 5,000 tonnes per vertical metre of diluted resource. At a current annual production rate of approximately 200,000 tonnes, approximately 2 levels are exhausted in the PMZ each year.   

 

 

 

With the potential to expand the Palito West resource in the very near future, a scoping study is now underway to incorporate Palito West into the proposed capital development of the Ruari's Ridge deposit, some 100 metres to the south-west via a decline access. 

 

The geological resource has not been updated since January 2006, and with exploration success at the Jardim do Ouro prospects, the company has recently appointed NCL Brazil Ltda to undertake a new geological resource and mineral reserve estimate at year-end.  

 

 

 

 

 

 

 

 

The Tapajos region of northern Brazil encompasses an area of approximately 100,000 Km2, mainly located in the south-west Para State.  It has a significant history of alluvial gold production with estimated output of some 30 million ounces having been recovered, primarily from artisanal workings.

 

Present in the Tapajos since 1999, Serabi has established the only 'hard rock' mine in the region to date at its Palito gold mine, which produced 39,197 ounces of gold equivalent in 2006 from underground mining of high-grade, gold/copper mineralisation. 

 

Serabi has a significant exploration programme focused on the Tapajos region, owns and operates four surface drilling rigs and has its own assay laboratory.