Sao Chico Gold Mine

The Sao Chico Gold Mine is located approximately 30 kilometres to the southwest of the Palito mine and accessed by road from Palito along the Transgarimpeiro Highway via the town of Jardim do Ouro.

The current resources are identified in three vein structures namely the Main Vein, the Parallel Vein and the Julia Vein covering a strike length of some 900 metres. The Gabi Vein has recently been defined but no mineral resource estimate has yet been attributed to this structure.  Past artisanal activity at the Main Vein included a shaft extending some 18 metres below the surface giving access to a 58-metre long exploration drive.

Serabi commenced work early in 2014 on earthworks to allow the Group to expose the bedrock and construct a mine portal.  The portal was established shortly prior to the end of September 2014 and during the fourth quarter of 2014, the decline ramp was advanced towards the first two underground development levels.  The Main Vein was intersected in January 2015, and by the end of December 2015 the ramp development provided access to three development levels and the production of ore from the first stopes was underway. Commercial production at the Sao Chico Mine was declared to be effective as of 1 January 2016.   Ore from the Sao Chico Mine is transported by truck to the Palito gold process plant.

The Sao Chico Gold Mine, located close to the Sao Chico village, is in an area of some 200 artisanal workings in the form of shallow pits and shafts. The Main Vein comprises a gold-rich quartz/sulphide lens striking over 900 metres and with true widths between 0.50 metres and 2.9 metres wide. The lens is open along strike to the east and down-dip to the west. The Parallel Vein is located 60 metres south of the Main Vein and has been defined over a strike length of 80 metres and to a depth of 75 metres, dipping steeply to the southwest. The Julia Vein, discovered in the 2016 extension drilling campaign, is a mineralised vein structure located close and also parallel to the Main Vein. The Julia Vein develops west of a NE-SW cross-cutting structure, which effectively terminates economically mineable grades within the Main Vein. The Julia Vein is interpreted to be the focus of gold mineralising fluids west of the cross-cutting structure and although the Main Vein structure extends in its parallel position, the gold grades within the continuation of the mineralised structure are not significant.  The potential for discovery of blind sub-parallel vein deposits has been demonstrated through the definition of inferred mineral resources in the Parallel Vein. Further exploration is also warranted in the immediate area around Sao Chico where some areas with artisanal workings on the surface remain untested by drilling.  Finally, the Gabi Vein lies 70 metres south of the Main Vein and current mine infrastructure. This vein was intersected in the initial 2011 drilling campaign where deeper drilling targeting the Main Vein cut the Gabi Vein in the shallow portion of the drill holes. In 2021, following an exercise of data re-modelling and structural interpretation, the Gabi structure was recognised as being a significantly strike extensive structure (more than 700 metres) containing two possible mineralised shoots.

The Sao Chico deposit has now been defined over approximately 900 metres of strike length and to a depth of 300 metres through a combination of drilling intersections and underground development. As a greater understanding of the deposit has been achieved, it is clear the very high gold grades are hosted in discrete steeply plunging pay-shoot zones, which in turn are hosted inside an alteration shear zone. This shear zone itself is quite easily defined but there is no visual difference between high-grade gold and low grade and sterile areas. It is therefore essential for mine planning to use closely spaced development levels and extensive in-fill underground drilling.

The gold mineralisation of Sao Chico is amenable to direct cyanidation and following crushing and milling, the Sao Chico ore passes through a gravity concentration circuit with the concentrate produced being passed through an In-Line Leach Reactor (“ILR”), where gold is leached, and then recovered through conventional electrowinning and smelting processes to produce bars of gold doré. The tailings from this process continue to pass to the CIP recovery plant where they are blended with the Palito flotation tailings.

The mining methodology is primarily sub-level open stopping where the levels are spaced approximately 15 metres apart and once ore blocks are defined, the ore between the sub-levels is drilled with a series of longer holes usually of 12 metres and sequentially blasted.