minesite article on Serabihttps://www.minesite.com/nc/minews/singlenews/article/serabis-latest-drill-results-may-just-be-a-taste-of-things-to-come/1160.html
April 18, 2011
Serabi’s Latest Drill Results May Just Be A Taste Of Things To Come
By Alastair Ford
Not a bad time to be looking for gold, when the price is hot-footing it up to US$1,500. Not a bad time to be finding it either, especially if the gold is in Brazil, which is a country that economically speaking looks as though the best is still ahead of it. Standard & Poor’s may be turning bearish on the USA and wiping billions off markets with its negativity, but as far as the Brazilian economy is concerned the ratings agencies have been growing more, and not less, optimistic. Not so long ago, the big news was that Brazil’s debt had been raised from “junk” to investment grade.
Now the news is that Standard and Poor’s (again) is lagging behind the other two major ratings agencies, Fitch and Moody’s in keeping Brazil at BBB-. S&P wants more evidence of fiscal tightening before it will follow the other two and raise the rating to BBB, and doesn’t want to be accused of erring on the side of optimism. Still, it’s interesting that the debate is about whether the rating will be raised or not, not whether it will be lowered. That’s the exact opposite of the discussions currently prevailing about the situation in the USA, where the spectre of default has suddenly reared its head. Hardly surprising that the US dollar is in a death spiral, and gold is soaring away.
All of which has provided Serabi Mining with a certain amount of extra wind in its sails even as its new drilling campaign gets underway in the Tapajos region of Brazil. The first results from that campaign are now in, and they give real grounds for encouragement, especially so since chief executive Mike Hodgson explains that the target that was drilled was chosen because of its ease of access rather than its ranking in terms of prospectivity. The simple truth is that the Piaui prospect lies on higher ground than any of the other eight targets that are likely to receive attention from the drillers in the months and years ahead, and that means as the rains recede, it can be drilled first. The drills should start turning on the best prospect, Currutela, says Mike, sometime in May, and results are therefore likely to be forthcoming in June.
In the meantime, though, the early results from Piaui are encouraging enough. Five of the first seven holes that Serabi drilled at Piaui hit the mineralised zone, and this, explains Mike looks to be up to 40 metres wide in places. What’s more, within that zone, there are plenty of higher grade widths. So, chalk up one success for electromagnetic (EM) surveys, as there was no surface expression or any other indication that a potential discovery lay beneath that particular piece of ground. Mike’s quite pleased about that, as not everyone thought it was a good idea to shoot EM. But Serabi’s peers in the region are all at it now, and Serabi itself has just done a second round of EM across its wider Jardim do Ouro lease.
The context of the Tapajos region is perhaps unique, though. This is a region that has already delivered production of 30 million ounces from artisanal workings, but only five million ounces to date from hard rock. The old rule that hard rock miners should follow the artisanal workers - or garimpeiros, as they’re known - certainly holds true, but clearly there’s a bit more to the story. The prize is to find more of the source rock for the gold the garimpeiros have been making money on for years, a goal which brings Mike back to the topic of Currutela, a prospect he clearly has high hopes for. “Currutela is the one we’re really excited about”, he says, although impatient investors will have to see what news the targets at the Panhandle prospects deliver, before they finally get a taste of Currutela.
All told, the next few months should be a good period for Serabi in terms of newsflow. The drill results should keep coming in at a steady pace as the drillers gradually tick off the targets at Jardim do Ouro, working through the C$8 million exploration budget. And the results should, in turn, keep investors interested. The newsflow will also serve to keep Serabi in view in Toronto, where it has just taken a listing, and may go some way towards moving the share price up to a level where Mike and his team are comfortable about contemplating another fundraising. It’s still early days, though.
In the past Serabi’s trials and tribulations have run the full gamut from assets to government administrators, so it’s nice for once to be able to comment solely on good news and the potential for more. The company’s problems seem to be behind it now. It's in a good mining jurisdiction, in an economy that seems to be going from strength to strength. And now, at last we'll be able to see what it’s actually got in the ground.