Brazil-focused Serabi Gold has lowered its 2022 guidance after continued supply chain issues and greater-than-expected dilution from the Julia Vein of the Sao Chico orebody resulted in delayed production.
The Aim- and TSX-listed junior reduced its guidance to 30 000 oz, from 36 000 oz to 39 000 oz previously.
During the first quarter, Serabi produced 7 062 oz at its Palito mine, which was 13% less than the same period in 2021.
CEO Mike Hodgson commented on Tuesday that the first-quarter results had been somewhat mixed, with better-than-anticipated results from the underground development at Corinaga, but disappointing production outcomes at Palito.
March was a significantly better month with improved grades and production, but it was not possible to recover earlier shortfalls in planned production owing to delays in receiving new mining fleet, he said.
“By having to rely on older machinery we have, in the short term, mined and processed the ore in immediately accessible blocks, including those with lower grades, which contributed to lower-than-anticipated gold production over the last six months. However, all new items of fleet have been delivered or are expected to be delivered during the second quarter of 2022 and we are confident that we can increase production from the already identified new vein structures during the remainder of 2022 and in 2023.”
At São Chico, dilution in the Julia Vein from mechanised long hole open stoping was also higher than expected as a consequence of the presence of parallel and cross cutting faults and intrusive dykes which post-date the ore.
Hodgson explained that this level of faulting appeared to be unique to the Julia Vein.
“We have therefore decided to change the mining method on the Julia Vein and introduce selective open stoping, the method used successfully on the Palito orebody, and which will over time be expected to improve grades by minimising dilution through greater selectivity in the mining. 1 000 oz of production which had been scheduled from São Chico in February by long hole, will now be mined selectively during the second quarter and over the rest of the year.”
The decision to mine selectively on the Julia Vein means the reliance on production ounces, in the near term, will focus on the Palito orebody, with operations at São Chico focusing more on mine development with a view to a return to planned production levels later in the year and into 2023.