Serabi Gold’s stock rally tests its footing: Can Q3 output and high-grade drill hits justify a continued re-rating?

Serabi Gold plc (AIM: SRB, TSX: SBI, OTCQX: SRBIF) has staged a remarkable run in 2025, with its share price quadrupling from around 75 pence in late October 2024 to more than 300 pence at its peak in early October 2025. Investors, retail traders, and institutional holders alike were drawn to the Brazilian-focused gold exploration and production company’s string of positive updates, including record-breaking gold grades, successful brownfield exploration, and continued ramp-up at the Coringa gold mine. But after reaching its October highs, Serabi Gold’s shares experienced a 17% retracement to around 250 pence by late October 2025, reflecting both profit-taking and a recalibration of near-term expectations.

The broader context of high gold prices has added fuel to the momentum. Yet the critical question for investors now is whether the strong operational and exploration performance can sustain sentiment into the December quarter and support further upside going into 2026. With 2025 production guidance still intact and a resource update expected in the first quarter of 2026, Serabi Gold plc is entering a critical window for re-rating validation.

How does Serabi Gold’s Q3 2025 production performance compare with past quarters and guidance?

Serabi Gold plc reported its highest-ever quarterly gold output in the third quarter of 2025, producing 12,090 ounces of gold—a 27% increase over the same period in 2024. This lifted the year-to-date gold production figure to 32,635 ounces, placing the company comfortably on track to meet its full-year guidance of between 44,000 and 47,000 ounces.

Operational efficiencies also improved materially. The average mined gold grade for Q3 was 7.24 grams per tonne (g/t), a notable increase from the 6.72 g/t recorded in Q2 2025 and significantly higher than the 5.48 g/t seen in Q3 2024. At the Palito Complex specifically, mined grades reached 6.29 g/t, while Coringa delivered an impressive 8.23 g/t.

These improvements were largely attributed to better ore selection and increased mechanisation. The Palito Complex benefited from high-grade stoping at the G3 and Barrichello zones, while the Coringa mine saw operational gains from the Serra zone and the emerging Meio zone. The company completed 3,875 metres of horizontal development during the quarter, further de-risking its production targets and expanding future access to high-grade blocks.

What exploration developments are underpinning future resource growth at the Coringa and Palito sites?

A key pillar of Serabi Gold plc’s 2025 strategy is its aggressive 30,000-metre brownfield drilling campaign, evenly split between the Palito Complex and Coringa. The company aims to grow its current 1 million ounce gold resource base to 1.5 million ounces or more. With the programme scheduled to conclude in December 2025 and a resource update targeted for Q1 2026, exploration outcomes from this campaign are closely watched.

At Coringa, the most significant discovery has been the Serra South zone, located approximately 500 metres south of the Serra mine. Initial drill results have been exceptional. Hole 25-SR-010 returned 0.53 metres at 153.07 g/t gold, while Hole 25-SR-028 intersected 0.87 metres at 137.48 g/t gold, including a subinterval of 0.32 metres at 322.10 g/t gold. These grades are among the highest reported in Serabi’s history and suggest the Serra orebody could be far more extensive than previously modelled.

The Serra South zone remains open at depth, and three rigs are currently operating on a 50-metre grid to define the mineral envelope. In addition, step-out drilling between the original Serra zone and Serra South is testing the feasibility of underground connectivity—potentially reducing future development capex by linking ore zones.

Elsewhere at Coringa, drill results from the Meio zone and Galena zones have also delivered grades exceeding 18 g/t gold. The company completed 13,800 metres of its planned 16,000 metres of drilling at Coringa by September 2025, and 25 of the 64 drill holes returned grades above 3.0 g/t, confirming strong exploration targeting and geological continuity.

What new zones and mineralised corridors have been identified at the Palito Complex?

While Coringa has captured recent headlines, the Palito Complex continues to evolve as a high-grade engine within Serabi’s portfolio. The 2025 brownfield drill programme included 14,000 metres of diamond drilling, with over 10,400 metres completed across 35 holes as of September.

The Senna orebody has been the standout. Located in the central part of the Palito Complex, Senna was previously mined between 2015 and 2019 but had not been explored at depth or along strike due to historical cash constraints. The 2025 drill programme has extended mineralisation both north and south of the known ore zone, with Hole 25-SE-001 returning 3.40 metres at 6.63 g/t gold, including 0.60 metres at 26.80 g/t.

Drilling at the Onça target returned 0.65 metres at 8.18 g/t gold, opening up a 500-metre corridor between Onça and the Piaui target. Additional IP geophysical work at Palito identified anomalies at the Jiboia and Mutum zones. These have shown broad zones of hydrothermal alteration with disseminated sulphides and gold mineralisation. Serabi is now planning a reverse circulation drilling campaign to assess the potential for lower-grade, bulk-tonnage mineralisation at these sites—a style not previously developed at Palito.

How does Serabi Gold’s current cash position and debt structure influence its ability to fund exploration and production growth into 2026?

Serabi Gold plc ended Q3 2025 with a cash balance of $38.8 million, up from $30.4 million in the previous quarter and $22.2 million at year-end 2024. The company’s net cash position, after deducting interest-bearing loans and lease liabilities, stood at $33.0 million as of 30 September 2025.

This financial flexibility allows Serabi to fully fund the remaining 2025 drill metres and to prepare for its 2026 programme, which is set to begin after the rainy season in Q2 2026. The 2026 programme will build on the IP surveys and target generation completed in late 2024 and early 2025. At Coringa, a 90-kilometre induced polarisation survey has identified highly prospective zones, including targets showing concurrent high chargeability and conductivity—an anomaly combination rarely seen in earlier exploration work. These zones will be prioritised in the next drill phase.

The company also restructured its debt profile earlier this year. A $5 million loan from Banco Santander at a reduced interest rate replaced a previously higher-interest facility from Itau Bank, helping lower financing costs while preserving liquidity for exploration.

What macro trends, valuation pressures, and operational execution risks should investors consider as Serabi Gold enters Q4 2025?

Despite operational and exploration tailwinds, Serabi’s recent stock price volatility reflects broader sector challenges and expectations management. While the fundamentals appear strong, investor sentiment is tightly linked to whether the company delivers on its Q4 2025 production goals and whether drill results in Q4 extend the exceptional grades reported earlier in the year.

Investors should also note that assay results from Serabi’s internal Palito lab, while indicative, are not independently verified. Final grades are subject to ALS laboratory confirmation, and historical comparisons suggest a slight overestimation bias (~6.7%) in internal results. That said, Serabi’s track record of dual-lab QA/QC since 2019 has generally ensured reliability for resource planning.

What’s next for Serabi Gold plc, and can the stock re-test its October highs?

Looking ahead, Serabi Gold plc has several near-term catalysts that could drive a fresh wave of investor interest. These include the release of full Q4 production results, assay confirmation for high-grade intercepts at Serra South and Senna, and the all-important mineral resource update expected in the first quarter of 2026.

With the gold price remaining robust and Serabi’s ore grades improving, the company may be well-positioned to transition from a 40,000-ounce producer to one approaching 60,000 ounces annually, assuming continued exploration success and project development alignment. If the December quarter confirms the scale and continuity of recent discoveries, and Coringa’s ramp-up maintains momentum, the current pullback may prove temporary.

For long-term holders and institutional investors, the next few months will be critical in determining whether Serabi Gold plc remains a junior producer with growth optionality—or becomes a mid-tier name commanding premium valuation multiples.

What are the key investor takeaways from Serabi Gold’s record Q3 and brownfield drilling campaign?

Serabi Gold plc’s Q3 2025 performance and exploration updates signal strong momentum heading into the final quarter of the year. Below are the main takeaways that investors should retain when evaluating the company’s trajectory and potential re-rating catalysts:

• Serabi Gold plc delivered record gold production of 12,090 ounces in Q3 2025, marking a 27% increase year-on-year and the strongest operational quarter in the company’s history.
• The company is firmly on track to meet its FY2025 gold production guidance of 44,000 to 47,000 ounces, with 32,635 ounces already achieved in the first nine months of the year.
• The average mined grade improved significantly, reaching 7.24 g/t gold in Q3 2025, compared to 5.48 g/t in Q3 2024, driven by higher-grade stoping at both the Palito Complex and Coringa.
• Exploration efforts at Coringa yielded a major new discovery at the Serra South zone, where initial drilling returned intercepts as high as 322.10 g/t gold, indicating the potential for resource expansion.
• At the Palito Complex, extensions of the Senna orebody and promising results at the Onça and Piaui corridor are unlocking new zones of high-grade mineralisation, with potential bulk-tonnage mineral systems also being assessed.
• Serabi completed over 24,000 metres of its planned 30,000-metre 2025 brownfield drill programme across both assets, with the remaining metres scheduled before year-end.
• A Q1 2026 mineral resource update is expected to capture the impact of ongoing discoveries and could elevate Serabi’s total resource base from approximately 1Moz to 1.5Moz or more.
• The company ended Q3 2025 with a strong cash balance of $38.8 million and net cash of $33.0 million, providing the financial flexibility to fund its exploration roadmap into 2026 without equity dilution.
• The Coringa ore sorter continued to improve processing efficiency, allowing the company to generate ounces from lower-grade stockpiles while ramping up ROM feed.
• Investor focus is now shifting to December quarter results and assay confirmations, which will be critical in validating the structural continuity of the Serra South and Senna zones.