News

September 17, 2008

RIP The Palito Mine: On The Critical List, One Not-So-Careful Owner, Serabi Mining

By Alastair Ford

Serabi’s former management, a top-notch bunch of investment bankers and other worthies, cut quite a dash in London town a couple of years ago, when Serabi was just beginning to look as if it was gaining momentum at the Palito mine development, and the gold price was on the up. Nice to see them manning booths at Mines and Money, laughing and joking about the lack of liquidity on Aim, a market that didn’t know true value if it looked it straight in the face. They talked a good game, and many bought into the story, backed as it was by a slick PR operation, and research from the City’s leading analyst.

True value looked Serabi straight in the face on Wednesday 17th September all right. The market knocked nearly 90 per cent of the shares in one fell swoop after it announced that its flagship Palito Mine “is not currently able to maintain the levels of development and production required by the company”. That choice phrase translates fairly easily into: it’s heavily loss-making. Serabi blamed several familiar factors for this outcome: the inability to get skilled staff, delays in equipment...