Brazilian mining company Serabi Gold has reported an annual production of nearly 40,000oz of gold in the last year, exceeding its predictions.

The company has also provided an operational update for the fourth quarter of 2016 on its completely owned Palito and Sao Chico gold operations in the Tapajos region of Para State, Northern Brazil.

The report stated that its annual production of gold in 2016 exceeded from its 2015 production by 19%.

In the last quarter of 2016, it produced 9,413oz.

The company has also acquired new exploration licences at Sao Chico adjacent to the deposit that offers an opportunity to expand the project. Currently, it is conducting exploration at the site.

Serabi Gold recovered 34,611t at a grade of 7.38g/t of gold from Palito and 9,968t at 14.38g/t of gold from Sao Chico.

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In addition, the company has completed 2,624m of horizontal mining in the last quarter.

At Palito, Senna vein development is currently underway and the sublevels are being developed on 250mRL, 237mRL, 225mRL, 210mRL, with ramping to 180mRL.

"This year, the company plans to produce 40,000oz at an AISC of between $950 and $975 per ounce."

At Sao Chico, the main ramp has now been deepened to the 71mRL, about 170m below surface.

At the year-end, the company claimed that the combined surface stockpiles on these two mines totalled 21,000t of ore with an average grade of 4g/t of gold.

Serabi Gold CEO Mike Hodgson said: “The mines have performed well. At Palito the operation continues to perform steadily, although extracted mine grade during the quarter was lower than planned as a result of ore being 'cemented' in two stopes.

“This ore is not lost, and is being slowly recovered, but not as fast as we had budgeted. The production shortfall was partially compensated by more development ore, albeit with a lower gold grade. This resulted in a Palito head-grade for the quarter of 7.4g/t of gold, compared to 9.5g/t of gold for the previous quarter.”

Hodgson continued: "At Sao Chico, ore development and production continued in line with our plans and grades were excellent, returning over 14g/t for the quarter. The main ramp has now reached the 70mRL with the Main Vein intersected. Development continues on the 100mRL, 86mRL and the new 70mRL. Stoping is focused on the final blocks on the 186mRL, 156mRL and 140mRL.”

This year, the company plans to produce 40,000oz at an AISC of between $950 and $975 per ounce.

The 2017 guidance is an 8% increase of Serabi's initial guidance for the last year.

The management expects that with production efficiencies and improvements, the company will again be able to improve on its production guidance.