Serabi Gold Plc: Notice of Exercise of Conversion Rights over US$2 million Convertible Loan

LONDON, Aug. 15, 2016 - Serabi Gold Plc (AIM:SRB) (TSX:SBI), the Brazilian focused gold mining and development company, announces that Fratelli Investments Limited (“Fratelli”), the Company’s major shareholder, has exercised its right to convert its outstanding US$2 million convertible loan (the “Loan”) into ordinary shares of 0.5 pence each in the Company (“Ordinary Shares”).

Under the terms of the Loan (as announced on 31 December 2015) Fratelli had the right to convert the Loan into new Ordinary Shares of Serabi (the “New Ordinary Shares”) at a price of 3.6 pence per New Ordinary Share. Accordingly, the Board has resolved to issue to Fratelli 42,312,568 New Ordinary Shares which will, when issued, rank pari passu in all respects with the existing Ordinary Shares. Application will be made to AIM and to the TSX for the New Ordinary Shares to be admitted to trading, which is expected to occur on AIM on or about 19 August 2016.

Immediately following the exercise of these conversion rights, Fratelli will be interested in 386,375,734 Ordinary Shares, representing 55.30% of the enlarged issued share capital.

Mike Hodgson, CEO said:

“Fratelli continues to be a very strong supporter of the Company. Fratelli made this loan available at the end of last year when in common with all gold producers, the Company was being faced with a sustained period of a falling gold price, and continuing commitments to increase the throughput capacity of the process plant as well as development expenditure to bring the Sao Chico Mine into full production.

“Whilst we have always planned our cash flow to ensure we had funds available to repay this loan in 2017, with our existing loan from Sprott Resource Lending expected to be repaid by the end of 2016 and with this convertible loan obligation now also settled, we will be entering 2017 as a Company free of any long term borrowing and able to apply our cash flow to growth and building value.”

Concert Party Interests

Immediately following the issue of New Ordinary Shares, Fratelli’s, and the other members of the Concert Party (as defined in the circular to shareholders dated 28 January 2014), interest in the Company (and assuming full conversion of all existing options held by members of the Concert Party) will be as follows:

Concert Party Member	Interest in Enlarged Ordinary Share Capital	Percentage of Enlarged Ordinary Share Capital (Note 1)			Exercise of existing options	Interest in the Diluted Enlarged Ordinary Share Capital	Percentage of the Diluted Enlarged Ordinary Share Capital (Note 2)
Fratelli Investments Limited	389,375,734		55.30	%	-	386,375,734		55.06	%
Piero Solari Donaggio	-		-		-	-		-
Sandro Solari Donaggio	-		-		-	-		-
Carlo Solari Donaggio	-		-		-	-		-
Nicolas Bañados	22,443,947		3.21	%	3,200,000	25,643,947		3.65	%
Jorge Arancibia Pascal	767,370		0.11	%	-	767,370		0.11	%
Total	409,587,051		58.62	%	3,200,000	412,787,051		58.83	%

Note 1	The Enlarged Ordinary Share Capital comprises the existing Ordinary Shares and the New Ordinary Shares.
Note 2	The Diluted Enlarged Ordinary Share Capital comprises the Enlarged Ordinary Share Capital and the new Ordinary Shares to be issued assuming the exercise by the Concert Party of its entire holding of options.

Total Voting Rights

Following the issue of the New Ordinary Shares, the Company's issued share capital will consist of 698,701,772 Ordinary Shares, with voting rights. This figure may be used by shareholders in the Company as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

Enquiries:

Serabi Gold plc
Michael Hodgson	Tel: +44 (0)20 7246 6830
Chief Executive	Mobile: +44 (0)7799 473621
Clive Line	Tel: +44 (0)20 7246 6830
Finance Director	Mobile: +44 (0)7710 151692
Email: contact@serabigold.com
Website: www.serabigold.com
Beaumont Cornish Limited Nominated Adviser
Roland Cornish	Tel: +44 (0)20 7628 3396
Michael Cornish	Tel: +44 (0)20 7628 3396
Peel Hunt LLP UK Broker
Matthew Armitt	Tel: +44 (0)20 7418 9000
Ross Allister	Tel: +44 (0)20 7418 9000
Blythe Weigh Communications Ltd Public Relations
Tim Blythe	Tel: +44 (0)20 7138 3204
Camilla Horsfall	Tel: +44 (0)20 7138 3224

Copies of this release are available from the Company’s website at www.serabigold.com.

Neither the Toronto Stock Exchange, nor any other securities regulatory authority, has approved or disapproved of the contents of this news release.


Qualified Persons Statement

The scientific and technical information contained within this announcement has been reviewed and approved by Michael Hodgson, CEO of the Company. Mr Hodgson is an Economic Geologist by training with over 25 years’ experience in the mining industry. He holds a BSc (Hons) Geology, University of London, a MSc Mining Geology, University of Leicester and is a Fellow of the Institute of Materials, Minerals and Mining and a Chartered Engineer of the Engineering Council of UK, recognizing him as both a Qualified Person for the purposes of Canadian National Instrument 43-101 and by the AIM Guidance Note on Mining and Oil & Gas Companies dated June 2009.


Forward Looking Statements: This press release contains forward-looking statements. All statements, other than of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding the estimation of mineral resources, exploration results, potential mineralization, potential mineral resources and mineral reserves) are forward-looking statements. Forward-looking statements are often identifiable by the use of words such as “anticipate”, “believe”, “plan”, may”, “could”, “would”, “might” or “will”, “estimates”, “expect”, “intend”, “budget”, “scheduled”, “forecasts” and similar expressions or variations (including negative variations) of such words and phrases. Forward-looking statements are subject to a number of risks and uncertainties, many of differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, failure to establish estimated mineral resources, the possibility that future exploration results will not be consistent with the Company's expectations, the price of gold or copper and other risks identified in the Company’s most recent annual information form filed with the Canadian securities regulatory authorities on SEDAR.com. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement.