Serabi Mining Plc -Placing of Shares, Convertible Facility and Open Offer

10 November 2009 Serabi Mining Plc ("Serabi" or the "Company")

Placing of 139,867,833 new Ordinary Shares
£300,000 Convertible facility
Proposed open offer to raise £300,000


Highlights

Placing and Convertible facility to raise in total £2.398 million.

£300,000 open offer enables existing shareholders to participate on the same terms as the placing.

Funding will be used to undertake follow-up exploration around Palito.



Mike Hodgson, Chief Executive, commented:

"We are delighted to have completed this financing. The proceeds will be used to enhance the Palito project by investigating and evaluating a series of anomalies which have already been identified by the Company. I am confident that these funds will enable the Company to make further discoveries which will ultimately lead to an increase in its geological resource base through the investigation of the wider potential around Palito and provide shareholders with the potential for future growth of the business after what has been a difficult year.

I am also pleased to welcome our new strategic investor Greenwood Investments and Mr Christopher Kingsman and the Company is very appreciative of the support received from existing and new institutional investors. The open offer enables our smaller shareholders to participate in the Company's financing."


Enquiries:

Serabi Mining plc Website: www.serabimining.com

10 November 2009
Serabi Mining Plc
("Serabi" or the "Company")

Placing of 139,867,833 new Ordinary Shares
£300,000 Convertible facility
Proposed Open Offer to raise £300,000


1. Introduction

The Board of Serabi is pleased to announce that the Company has today placed 139,867,833 New Ordinary Shares at a price of 1.5 per Ordinary Share (the "Placing Price") to raise £2,098,017 (before expenses) (the "Placing"). In addition, the Company has arranged an unsecured £300,000 convertible loan facility (the "Convertible"), convertible into up to 20,000,000 New Ordinary Shares at the Placing Price. The proceeds of the Placing and the Convertible will in aggregate raise gross proceeds of £2,398,017 (before expenses) which will be used to fund the Company's next stage of exploration at the Palito mine.

The Board also intends to raise up to £300,000 (before expenses) by way of an open offer to be made to eligible shareholders of up to 20,000,000 New Ordinary Shares at the Placing Price. The open offer will not be underwritten and a circular will be sent to shareholders as soon as practicable.

2. Background to and reasons for the Placing, Convertible and the Open Offer

Following the decision to suspend the underground mining operation at Palito towards the end of 2008, the Directors have considered a variety of options to introduce new capital into the Group's projects and in particular the Palito mine. A number of contributing factors led to the failure to maintain necessary rates of mine development and ultimately, in the absence of sufficient working capital to finance this development, the need to suspend underground mining operations. The Directors have, however, concluded that even if the necessary finance could be raised it would, having placed the underground mine on care and maintenance, be the wrong strategy to pursue a near term re-establishment of underground mining at the Palito mine. The Directors are of the opinion that whilst they believe that the current Palito mine can be operated profitably, ultimately the long term value will be derived from the discovery and development of an enlarged reserve base which would support a mining and processing operation capable of producing at least 70,000 gold equivalent ounces per annum.

In January 2008, the Group commissioned a 6,000 hectare helicopter borne geophysical survey over and around the Palito mine. The full independent interpretation and evaluation of the results of this survey was completed in September 2008. The gold mineralisation at Palito is hosted within sulphide ore bodies which are conductors. The survey identified 66 anomalous areas where conductivity readings were greater than those of the surrounding area. Orientation readings were obtained by taking measurements over the Palito mine itself. Interpretation of the anomalous readings and correlation with other exploration data held by the Group has resulted in the prioritisation of 18 specific targets.

The Directors believe that the general geological characteristics around Palito, the existence of past garimpeiro activity in the area of the survey and the hydrothermal nature of the Palito deposit itself, are indicative that the Palito deposit is unlikely to be the only occurrence of gold mineralisation within the surveyed area. They therefore feel that evaluation through further exploration of the 18 prioritised anomalies provides an excellent opportunity to identify the Board's target of two to three Palito "look-a-likes". Assuming that each of these would be of a similar size to Palito, such an outcome could support a total reserve (including Palito) of up to 500,000 to 600,000 gold equivalent ounces and an additional resource of up to 1.2 million gold equivalent ounces.

The first stage of exploration will focus on conducting a variety of geophysical and geochemical analyses over the anomalies to improve the geological understanding of each of these. The Group anticipates that if the results of these initial studies are suitably encouraging the programme could result in 7-10 targets being advanced to a drill-ready status during the next 12 months and it plans to conduct an initial small scale drill programme over three of these targets during this time.

Subject to results, the Group intends over the following year to drill the remaining drill-ready targets and in addition, undertake further geophysical and geochemical analysis to advance the remaining anomalies to a drill-ready status. This programme would require additional capital to be raised of a similar amount to the Placing, at that time. Should two to three Palito "look-a-likes" be identified by this process, subsequent further in-fill drilling would be undertaken together with initial mine development and on-lode exploration to establish formal reserves and resources required for any bankable feasibility study. The Group anticipates that with an estimated cost of US$4-$5 million to bring the Palito deposit back into production, a further US$8-$10 million for the development cost of two additional deposits and an allowance of US$4-5 million for plant expansion and upgrades, the future costs to reach full scale production could be between US$16 million and US$20 million.

Based on such an enlarged resource, the Directors consider that a new operation whereby the Group has three concurrent but discrete mines in close proximity each at production rates of circa 25,000 gold equivalent ounces per annum feeding a central processing plant, would provide the best opportunity to develop the Palito area into an interesting and profitable operation, generating cash flow to support the Group's future exploration needs.

The Group has during 2009 operated Palito as a small scale surface mining operation focussed on the near surface oxide ore zones. The revenues from this operation have to date helped to minimise the working capital needs of the Group when taken in conjunction with significant cost reduction measures that have been taken. However, in the long term, the development and exploration at Palito as outlined above requires additional capital.

3. Details of the Placing
The Company has today conditionally placed 139,867,833 New Ordinary Shares at the Placing Price with selected institutional and private investors to raise £2,098,017 (before expenses). Application will be made for the New Ordinary Shares, which will rank pari passu with the Existing Ordinary Shares, to be admitted to trading on AIM and trading is expected to commence on 18 November 2009. The Placing is conditional on the Placing Shares being admitted to trading on AIM.

As part of the Placing, Greenwood Investments Limited ("Greenwood") has subscribed for 81,384,000 Placing Shares at the Placing Price. Greenwood is a private company incorporated in England and Wales, of which the controlling shareholder and sole director is Mr Christopher Kingsman. Mr Kingsman who has an existing beneficial interest in the Existing Ordinary Shares of Serabi worked as an analyst and fund manager in London from 1998 to 2005 and currently manages a family office based in Munich, Germany.

On completion of the Placing, Greenwood and Mr Kingsman together will be interested in approximately 29.35 per cent. of the Enlarged Share Capital of Serabi. If any person (or group of persons acting in concert) acquire an interest in securities (as defined in the City Code on Takeovers and Mergers (the "Takeover Code")) which, taken together with shares in which he and persons acting in concert are interested, carry 30 per cent. or more of the voting rights of a company, that person or those persons may be required by Rule 9 of the Takeover Code to make a general offer to all of the shareholders to acquire the remaining issued share capital. Greenwood did not wish to subscribe for Ordinary Shares as part of the Placing which would (together with any person with whom it is acting in concert) have increased its interest in securities to or above such 30% threshold.

Accordingly, in addition to its subscription under the Placing, Greenwood entered into a convertible loan agreement with the Company ("Convertible") under which Greenwood has made available a facility of £300,000 to the Company. The full amount of the Convertible is convertible at the election of Greenwood into New Ordinary Shares at the Placing Price at any time on or before 31 October 2014. A maximum of 20,000,000 New Ordinary Shares may be issued on conversion of the Convertible. The Convertible is unsecured and will pay a coupon of one per cent. per annum and, unless otherwise converted, will be repaid on 31 October 2014.

Greenwood has entered into an orderly market agreement with the Company and Beaumont Cornish, in which Greenwood has agreed that it will not dispose of any Ordinary Shares for a period of one year following admission, subject to certain exemptions as set out in Appendix II below.

The Company has also agreed that, for as long as Greenwood is interested in Ordinary Shares representing 15 per cent. or more of the entire issued share capital of Serabi from time to time, Greenwood shall have the right to nominate a director to the Board of the Company.

The Company intends to use the proceeds of the Placing and the Convertible to commence the first stage of exploration and further evaluation of the 18 prioritised anomalies identified within the surveyed area together with further oxide resource definition (expected to amount in aggregate to approximately US$1.7 million in the first year) as well as to fund the general working capital requirements of the Group including new project development.

4. Open Offer
The Company considers it important that, where reasonably practicable, Shareholders have an opportunity to participate in the fundraising on equivalent terms and conditions to the Placing. The Board also intends to raise up to £300,000 (before expenses) by way of an open offer to be made to eligible shareholders of up to 20,000,000 New Ordinary Shares at the Placing Price. The open offer will not be underwritten and a circular will be sent to shareholders as soon as practicable. A further announcement will be made concerning the timetable for the open offer when the circular is posted to shareholders.

5. Additional issue of shares
The Company has also issued today 5,054,551 New Ordinary Shares to certain suppliers and consultants in satisfaction of outstanding liabilities of £77,503. Application will be made for these New Ordinary Shares, which will rank pari passu with the Existing Ordinary Shares, to be admitted to trading on AIM which is expected to commence on 18 November 2009.

In addition, the Company intends to issue New Ordinary Shares to the Directors in settlement of accrued but unpaid remuneration and benefits under the terms of their existing service contracts amounting to £95,917 at the Placing Price.

Pursuant to the Placing, the Company has issued Adviser Warrants to Beaumont Cornish Limited, the Company's Nominated Adviser and broker, to subscribe for up to 1,550,000 new Ordinary Shares at the Placing Price.

Website: www.serabimining.com


Qualified Person's Statement:

The technical information contained within this announcement has been reviewed and verified by Michael Hodgson as required by the AIM Guidance Note on Mining, Oil and Gas Companies dated June 2009. Michael Hodgson is an Economic Geologist by training with 20 years experience in the mining industry.

He has a BSc (Hons) Geology, University of London, an MSc Mining Geology, University of Leicester and is a Fellow of Institute of Materials, Minerals and Mining and a Chartered Engineer of the Engineering Council of UK.




Appendix I RISK FACTORS

ALL THE INFORMATION SET OUT IN THIS ANNOUNCEMENT SHOULD BE CAREFULLY CONSIDERED, IN PARTICULAR THE ATTENTION OF PROSPECTIVE INVESTORS AND SHAREHOLDERS IS DRAWN TO THE RISKS DESCRIBED BELOW. THE ORDINARY SHARES SHOULD BE REGARDED AS A SPECULATIVE INVESTMENT AND AN INVESTMENT IN ORDINARY SHARES SHOULD ONLY BE MADE BY THOSE WITH THE NECESSARY EXPERTISE TO FULLY EVALUATE THE INVESTMENT.

INVESTMENTS MAY FALL AS WELL AS RISE IN VALUE. THE DIRECTORS BELIEVE THAT THE FOLLOWING RISKS SHOULD BE CONSIDERED CAREFULLY BY INVESTORS BEFORE ACQUIRING ORDINARY SHARES. PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT AN INDEPENDENT ADVISER AUTHORISED UNDER FSMA.

IF ANY OF THE FOLLOWING RISKS ACTUALLY MATERIALISE, THE GROUP'S BUSINESS, FINANCIAL CONDITION, AND PROSPECTS COULD BE MATERIALLY AND ADVERSELY AFFECTED TO THE DETRIMENT OF THE COMPANY AND ITS SHAREHOLDERS. IN THAT CASE, THE MARKET PRICE AND LIQUIDITY OF ORDINARY SHARES COULD DECLINE AND ALL OR PART OF AN INVESTMENT IN THE ORDINARY SHARES COULD BE LOST.

THE DIRECTORS CONSIDER THE FOLLOWING RISKS TO BE MATERIAL. THE RISKS SET OUT BELOW DO NOT NECESSARILY COMPRISE ALL THOSE ASSOCIATED WITH AN INVESTMENT IN THE COMPANY AND THE ORDINARY SHARES. THERE MAY BE ADDITIONAL RISKS THAT THE DIRECTORS DO NOT CURRENTLY CONSIDER TO BE MATERIAL OR OF WHICH THE DIRECTORS ARE NOT CURRENTLY AWARE. NO INFERENCE OUGHT TO BE DRAWN AS TO THE RELATIVE IMPORTANCE, OR THE LIKELIHOOD OF THE OCCURRENCE, OF ANY OF THE FOLLOWING RISKS BY REFERENCE TO THE ORDER IN WHICH THEY APPEAR.

RISKS SPECIFIC TO THE GROUP
Exploration and development risk
The Company is engaged in the exploration of mineral properties, an inherently risky business, and there is no assurance that an economically viable mineral deposit will be discovered. Most exploration projects do not result in the discovery or development of commercially mineable ore deposits. A significant amount of the Placing proceeds will be used towards exploration in evaluating the 18 anomalies identified. However, there is a risk that no economically viable mineral deposits will be found.

Reserve and resource estimates
The estimation of mineral resources and reserves is in part an interpretative process and the accuracy of any such estimates is a function of the quality of available data, and of engineering and geological interpretation and judgement. No assurances can be given that the volume and grade of reserves recovered, and rates of production achieved, will not be less than anticipated. The Company contracts the services of independent professional experts to prepare resource and reserve estimates.

Political risk
Political risk is the risk that assets will be lost through expropriation, unrest or war. Brazil, the only country in which the Group has operations, currently has a stable political system with established fiscal and mining codes and a respect for the rule of law but there can be no guarantee that the Group will not be adversely affected by political risk. Elections are due in 2010 and the current president will not be eligible for a further term which may lead to a period of change and political uncertainty. The country has however enjoyed strong economic growth and for this reason it is considered unlikely that political change will seek to put this at risk by making significant changes that would make the country less attractive for foreign investment.

Surface Oxide risk
Whilst oxide mining operation continues at this time, insufficient ore sources have been identified to date to allow any estimation or indication of the expected life or future production levels of gold from this mining activity. Exploration to identify additional oxide ore sources are on-going. Mining of the oxide ore may be suspended at any time if there is insufficient mineable material identified to maintain the viability of this operation.

Commodity risk
Commodity risk is the risk that the price earned for minerals will fall to a point where it becomes uneconomic to extract them from the ground. The principal metals in Serabi's portfolio are gold, copper and silver. The prices of these metals are affected by numerous factors beyond the control of the Company, including producer hedging activities, demand, political and economic conditions and production levels. During 2008, the price of certain commodities including copper fell significantly on world markets. Future commodity prices may go down as well as up.

Liquidity risk
Liquidity risk is the risk of running out of working and investment capital. Serabi's goal is to finance its exploration activities with cash flow from operations, but in the absence of such cash flow, the Group relies on the issue of equity share capital, joint venture and option agreements to finance its activities. There can be no assurance that adequate funding will be available when required to finance the Group's activities.

Currency risk
Fluctuations in currency exchange risks can significantly impact cash flows. The Group finances its overseas operations by transferring US dollars from the UK to meet local operating costs in its Brazilian subsidiary. The Group currently receives income from gold sales in Brazilian Reais although the price at which these sales are calculated is made by reference to world market prices which are quoted in US dollars. Any income of the Group may become subject to exchange control or similar restrictions.

Because the primary market for the Ordinary Shares and the underlying business of the Company are in a currency other than Euro, investors from countries whose currency is the Euro are reminded that changes in exchange rates may also have an adverse effect on the value, price or income of the Ordinary Shares.

Changes in legislation
Exploration and production activities are subject to local laws and regulations governing prospecting, development, production, exports, taxes, labour standards, occupational health and safety, mine safety and other matters. Such laws and regulations are subject to change and can become more stringent, and compliance can therefore become more costly.

Environmental protection
The Group's exploration, development and production activities are subject to extensive laws and regulations governing environmental protection. The Group is also subject to various reclamation-related requirements.

A failure to comply with environmental laws and regulations may result in enforcement actions causing operations to cease or be curtailed, the imposition of fines and penalties, and may include corrective measures requiring significant capital expenditures. In addition, certain types of operations require the submission and approval of environmental impact assessments.

Title to mineral properties
While the Company has undertaken all the customary due diligence in the verification of title to its mineral properties, this should not be construed as a guarantee of title. The properties may be subject to prior unregistered agreements or transfers and title may be affected by undetected defects.


RISKS RELATING TO THE COMPANY'S SHARES

Value of Ordinary Shares and liquidity
It is likely that the Company's share price will fluctuate and may not always accurately reflect the underlying value of the Group's business and assets. The price of the Ordinary Shares may go down as well as up and investors may realise less than the original sum invested. The price that investors may realise for their holdings of Ordinary Shares, if and when they are able to do so, may be influenced by a large number of factors, some of which are specific to the Group and others of which are extraneous. Such factors may include the possibility that the market for the Ordinary Shares is less liquid than for other equity securities and that the price of the Ordinary Shares is relatively volatile.

The Directors are unable to predict when and if substantial numbers of Ordinary Shares will be sold in the open market. Any such sales, or the perception that such sales might occur, could result in a material adverse effect on the market price of the Ordinary Shares.

Dividends
There can be no assurance as to the level of future dividends. The declaration, payment and amount of any future dividends of the Company are subject to the discretion of the Shareholders or, in the case of interim dividends, to the discretion of the Directors, and will depend upon, among other things, the Group's earnings, financial position, cash requirements, availability of profits, as well as relevant laws or generally accepted accounting principles from time to time. For the time being the Company does not pay dividends and this is unlikely to change in the near future.

Suitability
An investment in the Company involves a high degree of risk and may not be suitable for all investors.

Investors are reminded that the price at which they may realise their Ordinary Shares and the timing of any disposal of them may be influenced by a large number of factors, some specific to the Group and its proposed operations, some which may affect the sector in which the Group operates and some which relate to the operation of financial markets generally. These factors could include the performance of the Group's operations, large purchases or sales of shares in the Company, liquidity or absence of liquidity in the Ordinary Shares, legislative or regulatory changes relating to the business of the Group and general economic conditions.


GENERAL RISKS

Financial markets and global economic outlook

The performance of the Group will be influenced by global economic conditions and, in particular the conditions prevailing in the United Kingdom and Brazil. The global economy has been experiencing difficulties during 2008 and 2009, with the natural resources sector, in particular, being affected from the autumn of 2008 onwards. The financial markets have deteriorated dramatically in this period. This has led to unprecedented levels of illiquidity, resulting in the development of significant problems at a number of the world's largest banks and insurance companies and considerable downward pressure and volatility in share prices. In addition, recessionary conditions are present in the United Kingdom, as well as in other countries around the world.

If these levels of market disruption and volatility continue, worsen or abate and then recur, the Company is likely to experience difficulty in securing debt finance, if required, to fund its long term development strategy. The Group may be exposed to increased counterparty risk as a result of business failures in the countries in which it operates and will continue to be exposed if counterparties fail or are unable to meet their obligations to the Group. The precise nature of all the risks and uncertainties the Group faces as a result of the current global financial crisis and global economic outlook cannot be predicted and many of these risks are outside of the Group's control.

Changes in tax and other legislation
The information in this announcement is based upon current tax and other legislation and any changes in legislation or in the levels and basis of, and reliefs from, taxation may affect the value of an investment in the Company. There can be no certainty that the current taxation regime in the UK and in Brazil where the Company operates will remain in force or that the current levels of corporation taxation will remain unchanged.

There can be no assurance that there will be no amendment to the existing taxation laws applicable to the Group's operations, which may have a material adverse effect on the financial position of the Group. Individual tax circumstances may differ from investor to investor and persons acquiring Ordinary Shares are advised to seek tax advice based upon their personal circumstances.

Additional capital requirements
The Group will require additional capital in the future, which may not be available to it. Future financings to provide this capital may dilute Shareholders' proportionate ownership in the Company. The Company may raise capital in the future through public or private equity financings or by raising debt securities convertible into Ordinary Shares, or rights to acquire these securities. Any such issues may exclude the pre-emption rights pertaining to the then outstanding shares.

If the Company raises significant amounts of capital by these or other means, it could cause dilution for the Company's existing Shareholders. Moreover, the further issue of Ordinary Shares could have a negative impact on the trading price and increase the volatility of the market price of the Ordinary Shares. The Company may also issue further Ordinary Shares, or create further options over Ordinary Shares, as part of its employee remuneration policy, which could in aggregate create a substantial dilution in the value of the Ordinary Shares and the proportion of the Company's share capital in which investors are interested.

Forward looking statements
Events in the past, or experience derived from these, or indeed present facts, beliefs or circumstances, or assumptions derived from any of these, do not predetermine the future. Hopes, aims, targets, plans or intentions contained in this announcement are no more than that and should not be construed as forecasts.

This announcement contains certain forward-looking statements that are subject to certain risks and uncertainties, in particular statements regarding the Group's plans, goals and prospects. These statements and the assumptions that underpin them are based on the current expectations of the Directors and are subject to a number of factors, many of which are beyond their control. As a result, there can be no assurance that the actual performance of the Group will not differ materially from the matters described in this announcement.

Admission to trading on AIM
The Existing Ordinary Shares are, and the New Ordinary Shares will be, admitted to trading on AIM a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. The Ordinary Shares will not be admitted to the Official List. An investment in AIM quoted shares may carry a higher risk than an investment in shares quoted on the Official List.

The investment described in this announcement is speculative and may not be suitable for all recipients of this announcement. Potential investors are accordingly advised to consult a person authorised under FSMA who specialises in advising in investments of this kind before making any investment decisions. A prospective investor should consider carefully whether an investment in the Company is suitable in the light of his/her personal circumstances and the financial resources available to him/her.


Appendix II Additional Information

The undertaking by Greenwood not to dispose of any of its interest in Serabi for period of 12 months following the placing, shall not apply to a transfer of Ordinary Shares made:

1.1 pursuant to:
(a) an acceptance of a takeover offer for the entire issued share capital of Serabi (or such share capital other than any shares held or acquired or contracted to be acquired by the offeror or by any associate of the offeror within the meaning of section 988 of the Act) recommended for acceptance by the Board (or, if applicable, the independent Board members in relation to such takeover offer) or which has become unconditional as to acceptances;
(b) a compromise or arrangement between Serabi and is creditors or any class of them or between Serabi and its members or any class of them which is agreed to by the creditors or members and sanctioned under sections 895 to 901 of the Act or section 110 of the Insolvency Act 1986;
(c) any offer by Serabi to purchase its own Shares which is made on identical terms to the holders of Shares of the same class and otherwise complies with the Act;
(d) any disposal to a member of the same group of companies as that of which the Investor is a member, provided that such transferee enters into an undertaking in the same terms as hereof;
1.2 in order to prevent Greenwood being required to make a mandatory offer pursuant to Rule 9 of the Takeover Code; or
1.3 on the sale by Greenwood of Shares arising on the exercise of a right to subscribe such Shares under a Serabi open offer or rights issue, provided that (in any case):
(a) such exercise is made by Greenwood in respect of a larger number of Shares than those so sold;
(b) the number sold is no more than is necessary to make such exercise (taking into account such sale) a self-financing transaction for ; and
(c) the sale is made on or as soon as practicable after such exercise.


DEFINITIONS

"Admission" admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules

"AIM" a market operated by the London Stock Exchange

"AIM Rules" the AIM Rules for Companies published by the London Stock Exchange as amended from time to time governing admission to, and the operation of, AIM

"Beaumont Cornish" Beaumont Cornish Limited, the Company's nominated adviser and broker, a member of the London Stock Exchange and authorised and regulated by the Financial Services Authority

"Company" or "Serabi" Serabi Mining Plc

"Convertible" The unsecured £300,000 convertible loan facility, convertible into up to 20,000,000 New Ordinary Shares at the Placing Price

"Directors" or the "Board" the directors of the Company, as at the date of this announcement

"Disclosure and Transparency Rules" the Disclosure and Transparency Rules issued by the FSA

"Enlarged Share Capital" the 291,455,916 Ordinary Shares in issue on Admission, including the Placing Shares, the New Ordinary Shares to be issued to certain suppliers and consultants and any New Ordinary Shares issued to Directors in settlement of accrued but unpaid remuneration and benefits

"Existing Ordinary Shares" the 140,139,065 Ordinary Shares of the Company in issue at the date of this Document

"FSA" the Financial Services Authority of the UK

"FSMA" the Financial Services and Markets Act 2000 (as amended)

"Greenwood" Greenwood Investments Limited, a company limited by shares registered in England and Wales with registered number 7057380 and a registered office at Lubbock Fine City Forum, 250 City Road, London EC1V 2QQ

"Group" the Company and its subsidiaries

"London Stock Exchange" London Stock Exchange plc

"New Ordinary Shares" the Ordinary Shares in the Company to be issued pursuant to the Placing and the additional share issues described in the announcement

"Ordinary Shares" ordinary shares of 0.5 pence each in the capital of the Company

"Overseas Shareholders" Shareholders resident in, or citizens of, jurisdictions outside the United Kingdom

"Placing" the conditional placing by the Company of the Placing Shares at the Placing Price

"Placing Price" 1.5 pence per New Ordinary Share

"Placing Shares" the 139,867,833 New Ordinary Shares to be issued pursuant to the Placing

"Prospectus Rules" the rules made by the Financial Services Authority pursuant to sections 73A(1) and (4) of FSMA

"RIS" Regulated Information Service

"Shareholder" a holder of Ordinary Shares from time to time

"UK" the United Kingdom of England, Scotland, Wales and Northern Ireland

"UKLA" the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of FSMA

"US", "USA" or "United States" the United States of America, each State thereof (including the District of Columbia), its territories, possessions and all areas subject to its jurisdiction



GLOSSARY


"On-Lode Exploration" exploration by the establishment of underground mineral development which follows the mineralised structure

"Mineral Resource" a concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories An Inferred Mineral Resource is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability. An Indicated Mineral Resource is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed. A Measured Mineral Resource is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and grade continuity

"Ore Reserve" the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. Ore Reserves are sub-divided in order of increasing confidence into Probable Ore Reserves and Proved Ore Reserves. A Probable Ore Reserve is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. A Proved Ore Reserve is the economically mineable part of a Measured Mineral Resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments and studies have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified

"VTEM" Versa time domain electromagnetic - a particular type of electromagnetic geophysical survey to prospect for conductive bodies below surface.

HUGIN /Source: Serabi Mining plc /LSE: SRB /ISIN: GB00B074J639