Serabi Gold cuts 2026 output outlook after permit delays, 9% production decline
Key Facts
Serabi Gold cut its 2026 gold production outlook to a level in line with the previous year after permit delays prevented a planned fourth-quarter increase, according to its announcement on 21 October. The company had started the year with production guidance of between 53,000 and 57,000 ounces, according to its first-quarter operational announcement published in April. It subsequently tied its previous outlook, in its second-quarter update issued in July, to the assumption that a licence would be secured during the final quarter of the year. That assumption would have allowed the company to increase production in the latter part of the year, before the failure to receive approvals prompted a revision to its annual target. The chief executive said the long-term growth strategy remained unchanged despite the reduction in production guidance for the current year.
Third-quarter gold production totalled 11,008 ounces, down 9% from the same period in 2025, according to the operational results statement. The company attributed the decline to lower-than-expected ore grades at the Palito complex, which affected production from July to September. The complex recorded quarterly output of 2,907 ounces, while Coringa produced 8,101 ounces over the same period. Coringa thus accounted for the larger share of the company's quarterly production, with shipments of its ore subject to the limits of the current trial licence. The year-on-year decline in actual output coincided with the failure to secure the planned fourth-quarter increase because of approvals, leaving the operational update to report both a decline for the period just ended and a reduction in the annual target.
Coringa's trial licence allows up to 100,000 tonnes of ore to be transported annually to the Palito complex, according to the company's details on operating restrictions. By the end of September, ore transported and counted against the current annual allowance totalled 85,602 tonnes, approaching the ceiling set by the licence. The company said transporting additional material required an increase in the permitted limit or the granting of an operating licence, the approvals needed to lift the existing restriction on ore movements. The licensing process includes approval from the relevant Brazilian land authority for a change in land use, according to the previous operational update issued in July. It also requires approval from the authority responsible for Indigenous affairs for the Indigenous component study, as part of the regulatory procedures associated with the project.
On processing equipment, the company announced in April a project to install an additional ball mill at the Palito complex, which receives ore transported from Coringa. It estimated the installation cost at around $5.0 million when the project was launched and said its cash balance would allow it to fund the project in full. The project formed part of the first-quarter production announcement, which also included the initial annual guidance range before it was revised as approval delays persisted. By the end of September, the company's cash balance stood at $63.2 million, according to the latest operational update, with the disclosed liquidity figure coming after the mill cost estimate issued in April. Serabi Gold confirmed in its statement that its balance sheet remained free of borrowings, saying: "The company remains debt-free."
Interim results published in September showed earnings before interest, taxes, depreciation and amortisation rising to $44.4 million in the first half of 2026. The company compared that amount with earnings of $26.3 million in the corresponding period of 2025, according to the results for the months ended in June. Meanwhile, all-in sustaining costs rose to $2,682 an ounce in the first half, according to the same financial results. Those costs stood at $1,792 an ounce in the corresponding months of the previous year, meaning the improvement in operating earnings coincided with an increase in unit production costs. This financial comparison predates the third-quarter production results, as the first-half accounts cover a period that ended in June, while the latest operational update covers the period ended in September.
Management intends to provide a further production guidance update with quarterly financial results expected in late November, according to the company's announcement on its next disclosure steps. That will follow the October revision to the annual target, which the company linked to delays in the approvals needed to achieve the planned year-end increase. The financial results date will be followed by another regulatory deadline for Coringa, whose current trial licence expires on 29 January 2027. The company had specified the licence's expiry date in its first-quarter production announcement published in April. Until that deadline, transporting additional ore remains dependent on an increase in the annual allowance or the granting of an operating licence, under the process the company outlined for expanding shipments to Palito.