Serabi Gold (LSE:SRB) - Debt-Free Balance Sheet Fuels Expansion, Dividends and M&A Ambitions

Why It Matters

A debt‑free, cash‑rich Serabi Gold can accelerate production expansion and return capital, making it an attractive play in Brazil’s gold sector and a potential acquirer of undervalued assets.

Key Takeaways

• Debt eliminated, leaving Serabi Gold completely debt‑free.
• Generated $30 M cash; $65 M cash on hand Q1.
• Production rose to 44 k ounces, targeting 55 k ounces.
• Declared 20% cash‑flow dividend for 2025‑2026.
• Expanding Karinga plant and exploring 1.8 M‑oz resource.

Summary

Serabi Gold (LSE:SRB) used its London One‑to‑One meeting to outline a debt‑free balance sheet and aggressive growth plan, emphasizing higher production, dividend payouts and potential M&A in Brazil.

The company reported 44,000 ounces produced in 2024, up from 38,000, and expects 55,000 ounces in 2025. EBITDA reached $79 million and free cash flow is projected at $1.6‑$2.0 billion for the year, with cash balances climbing to $65 million after a $30 million cash generation in Q1. The average gold price used for calculations was $3,451 per ounce, and the all‑in sustaining cost (AISC) is expected to stay near $2,000 per ounce.

CEO Mike Hodgson highlighted the recent elimination of roughly $20 million of debt and the issuance of a dividend equal to 20% of cash flow, payable after the AGM. He also detailed the ongoing Karinga permit process, noting unanimous indigenous approval and an anticipated final permit by year‑end, which will enable a plant expansion slated for 2027. Exploration spending of $15‑$20 million aims to lift the Karinga resource from 1.4 M to potentially 1.8‑2.0 M ounces.

With a strong cash runway and no debt, Serabi is positioned to fund organic growth, increase shareholder returns and selectively pursue acquisitions that fit its disciplined, near‑term production focus. The strategy reduces financial risk while leveraging Brazil’s under‑served junior mining segment, offering investors a rare combination of stability and upside.

Original Description

Interview with Mike Hodgson, CEO, Serabi Gold

Our previous interview: https://www.cruxinvestor.com/posts/serabi-gold-lsesrb-the-playbook-for-growing-to-70000100000oz-while-returning-capital-9197

Recording date: 11th May 2026

Serabi Gold has entered a new phase of growth, transitioning from operational recovery to a financially strong, expansion-focused gold producer. In 2025, the company increased production to 44,000 ounces, up from 38,000 ounces in 2024, while maintaining an all-in sustaining cost of $1,816 per ounce. Supported by a strong gold price environment, this performance generated approximately $30 million in cash, ending the year with $50 million on hand. By the first quarter of 2026, Serabi had eliminated nearly $20 million in debt and grown its cash position to $65 million.

Looking ahead, the company expects to produce 53,000–55,000 ounces in 2026 and generate $60–100 million in free cash flow, depending on gold prices. This outlook is underpinned by a debt-free balance sheet and strong operating margins, even as Serabi invests $15 million annually in exploration and development.

A central pillar of its strategy is resource expansion. The company increased its resource base from 1 million to 1.4 million ounces in 2025 and is targeting 1.8–2 million ounces by the end of 2026 through extensive drilling. The Coringa project offers particularly strong upside, with significant unexplored potential along its mineralized strike.

A major milestone was the unanimous approval of environmental and indigenous studies for Coringa, significantly de-risking the permitting process. Final approval is expected by late 2026 or early 2027, paving the way for a potential doubling of annual production capacity to 100,000 ounces.

Serabi is also prioritizing shareholder returns through a dividend policy distributing 20% of cash flow, while evaluating disciplined acquisition opportunities. With strong cash generation, expanding resources, and a clear growth pathway, the company is well-positioned to scale production and enhance long-term value.

Learn more: https://www.cruxinvestor.com/companies/serabi-gold

Sign up for Crux Investor: https://cruxinvestor.com