Jardim do Ouro District
Whilst the underground mining operations at the Palito Mine were suspended, Serabi pursued a strategy of resources growth prior to making any decision on the recommencement of long term sustainable production at the Palito Mine. Serabi believes that resource growth will be delivered through the systematic evaluation of the reminder of the Palito Gold Mine licence area comprising 1,150 hectares and the surrounding 51,000 hectare Jardim do Ouro Project.
At the end of 2010 the Company had established nine drill targets within three kilometres of the Palito Mine, each of which it believed, based on its exploration results to date, had the potential to yield a Palito style and size deposit. It has also been widening its search away from the Palito Main and over time expects to establish a pipeline of discoveries at various stages at development as it seeks to confirm the overall potential of the Jardim do Ouro district.
A 12,000 metre discovery drilling programme, that commenced in December 2010, was completed during the fourth quarter of 2011. The programme established three new discoveries, Palito South, Currutela and Piaui of which Palito South and Currutela lie directly along strike from the existing Palito deposit.
The next stage of evaluation will be in-fill and resource drilling programmes which have been planned and will be financed from the cash flow generated from production operations from the Palito Mine.