Serabi Gold Q1 Output Jumps 20% as BRL Strength Caps Margin Gain

Serabi Gold plc (AIM:SRB, TSX:SBI, OTCQX:SRBIF) produced 12,043 ounces in the first quarter of 2026, a 20% increase year on year. The Brazilian-focused gold miner also grew its cash balance to $64.4 million from $49.2 million at end-2025 and fully repaid a $5.3 million Santander loan in January. The operational beat is clean. The margin story is more layered.

Gold sold for an average $4,926 per ounce in Q1, up 69% from $2,908 in Q1-2025. The Brazilian real strengthened from 5.5 to 5.25 per dollar over the quarter, compressing the local-currency translation of that USD price. The average gold price in Brazilian real was BRL25,881 per ounce. A stronger real means a smaller margin tailwind from the bull run.

Grade-Driven Production Gain at Palito and Coringa

The production increase came from higher feed grades at both mines and the start of output from the Meio zone at the Coringa Mine. The grade uplift at Coringa was 39% year on year, supported by the new classification plant that separates higher-grade material earlier in the process. Palito also delivered stronger grades, though the company did not disclose the Palito grade change separately.

Meio Zone Now in Commercial Production

Development at Coringa focused on the Meio and Galena veins through the quarter. The Meio zone reached commercial production, meaning its costs are now included in cash cost and AISC calculations for the first full quarter. That accounting shift is the primary reason cash costs and AISC ticked higher versus Q4-2025. The company sold 10,323 ounces during the quarter, compared with 9,699 in Q1-2025, while production ran ahead of sales at 12,043 ounces.

BRL Strength: The Margin Mechanism

Serabi sells gold in USD but pays most costs in Brazilian real. The real strengthened 4.5% against the dollar during Q1, moving from 5.5 to 5.25. That limited the extent to which the USD gold price increase translated into real-denominated revenue.

The Numbers Inside the Currency Effect

Average realised USD gold price: $4,926 per ounce (Q1-2026) versus $2,908 (Q1-2025) – a 69% increase.
Average BRL gold price: BRL25,881 per ounce – a smaller gain because the real strengthened.
Current spot gold: approximately $4,571 as of the release date, down from Q1 highs of $5,095.

If the real continues to strengthen, the margin tailwind from a $4,500+ gold price gets partially neutralised. A weaker real does the opposite. Currency is now a swing factor on margins, alongside grade and volume.

Metric	Q1-2026	Q1-2025	Change
Gold production (oz)	12,043	10,013	+20%
Gold sales (oz)	10,323	9,699	+6%
Avg realised USD gold price	$4,926	$2,908	+69%
Avg BRL gold price	BRL25,881	n/a	n/a
Cash balance	$64.4M	n/a	+31% vs Dec-25
USD:BRL rate (end period)	5.25	n/a	-4.5% vs Dec-25

Coringa Grade Surge and the Cost Side

The Coringa grade improvement was the headline operational achievement. The classification plant drove the uplift. The company explicitly linked the grade improvement to the plant's contribution and to development work on the Meio and Galena veins.

Debt Free After Santander Repayment and a $64.4M Cash Hoard

Serabi fully repaid its $5.3 million unsecured loan with Santander Bank in Brazil on 16 January 2026. The loan carried a 6.16% interest coupon. No new debt was taken on during the quarter. The company now operates debt free.

Cash Generation

$15.2 million cash generated from operations in Q1.

Cash balance reached $64.4 million on 31 March.

No debt, no new loans.

A $64 million cash pile against a market capitalisation near $300 million gives Serabi significant financial flexibility. It can fund exploration, development of satellite zones, and shareholder returns without tapping equity or debt markets. The company signalled that further exploration updates from its licence areas are coming in the next few weeks.

The lack of debt reduces financial risk. It does not eliminate operational or currency risk. The margin tests remain grade consistency and BRL movements.

Risks to Watch: BRL, Cost Progression, and Gold Price Pullback

The setup from Q1 is operationally strong but exposed to three variables.

What Would Weaken the Thesis

BRL strengthens further – Every percent in BRL appreciation reduces real-denominated revenue by roughly the same amount, assuming USD gold is flat.

AISC fails to plateau – If costs at Coringa continue to rise past Q2, the grade uplift advantage gets eroded.

Gold price falls below $4,200 – At current BRL rates, a $4,200 gold price would produce roughly BRL22,500 per ounce, a 13% drop from the Q1 average. That would compress margins meaningfully.

What Would Confirm the Setup

Q2 production holds above 11,500 ounces – That would show the grade improvement is repeatable and not a one-quarter anomaly.

AISC falls back below $1,500 per ounce – If Coringa costs normalise as Meio moves past the ramp phase, margins expand.

BRL stabilises or weakens – A move back toward 5.5 per dollar would restore the full benefit of the USD gold price.

For more on gold price dynamics, see the gold profile and broader commodities analysis.

Serabi Gold Q1 Output Jumps 20% as BRL Strength Caps Margin Gain

Grade-Driven Production Gain at Palito and Coringa

Meio Zone Now in Commercial Production

BRL Strength: The Margin Mechanism

The Numbers Inside the Currency Effect

Coringa Grade Surge and the Cost Side

Cash Cost and AISC Outlook

Debt Free After Santander Repayment and a $64.4M Cash Hoard

Cash Generation

Risks to Watch: BRL, Cost Progression, and Gold Price Pullback

What Would Weaken the Thesis

What Would Confirm the Setup

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