Serabi Gold PLC

Serabi Gold PLC (LSE: SRB) is an FTSE AIM All Share and United Kingdom-based gold mining and development company. The Company is focused on conducting gold mining and exploration in Brazil. It operates the Palito Mining Complex and the Coringa Project, in the Tapajos region of the State of Para.

Key Recommendation Rationale – Sell at GBX 214.57

• Resistance near Current levels: SRB’s stock price has almost touched Resistance (R1) which was stated in the previous report on 18 August 2025 therefore, there can be a possibility of a decline from resistance levels. Considering the market conditions and the price action, it is prudent to exit the stock.
• Rising All-In Sustaining Costs May Pressure Margins if Gold Prices Soften - While Serabi has benefited from a favourable gold price environment, the company’s All-In Sustaining Cost (AISC) rose to $1,792 per ounce, slightly higher than the same period in 2024 ($1,782/oz) and notably higher than the full-year 2024 average of $1,700/oz. This upward trend—though modest—reflects increasing operational and development-related expenses. If gold prices were to decline from their current highs, the elevated cost base could place pressure on future profitability and operating margins.
• Short-Term Debt Exposure Remains Noticeable Despite Decent Cash Reserves - As of 30 June 2025, Serabi reported $5.3 million in current interest-bearing liabilities, similar to year-end 2024 levels. While the company holds a healthy cash balance of $30.4 million, the continued reliance on short-term debt facilities—including two $5 million unsecured loans within 13 months—may indicate a preference for near-term financing to fund operations or expansion. From a risk management perspective, a longer-term capital structure or diversification of funding sources might provide more financial flexibility in varied market conditions.

Valuation Methodology: Price/ Earnings Approach

Share Price Chart  

Conclusion

SRB is expected to trade at a discount, considering Rising All-In Sustaining Costs, and fears of global slowdown. For conducting the valuation, the following peers have been considered - Goldplat PLC (LSE: GDP), Altyngold PLC (LSE: ALTN) and others.

Given its current trading levels, Short-Term Debt Exposure, recent rally in the share price, relative valuation, and associated risks, it is prudent to exit the stock at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current Market Price of GBX 214.57 as of 03 September 2025 at 08:35 AM GMT+1.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 03 September 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.