The Palito and São Chico gold deposits are located within the northern portion of the Tapajós-Parima Orogenic Belt (TPOB), a constituent of the Ventauri-Tapajós province of the Guaporé Shield. Formed between 2.5 and 1.8 Ga, the TPOB is a northwest oriented magmatic arc bound to the north by the Amazonian Basin and to the south by the Cachimbo Graben. Within the TPOB, the Tapajós Gold Province hosts numerous primary gold deposits over an area of approximately 300 kilometers (km) by 350 km.

Mineralization at the Palito and São Chico deposits is hosted in granite and granodiorite of the Paráuari suite. Mineralization at the Palito Mine is hosted within three granitoids and is intimately associated with northwest-southeast vertical to sub-vertical mesothermal quartz-chalcopyrite-pyrite veins and pyrite disseminations filling the brittle-ductile fault sets. At Palito, the nature of sulfide mineralization varies along the strike and plunge extents of the deposit. Pyrite and chalcopyrite dominate in the granites, whereas pyrrhotite and pyrite with lesser chalcopyrite are found in the granodiorite. Within the granodiorites, the pyrrhotite-pyrite sulfides tend to be lower grade due to lower chalcopyrite content.

The Main Vein at São Chico strikes in a broadly west-northwest direction, dips steeply to the south, and ranges from approximately 1.0 to 3.9 meters (m) in apparent width. Mineralization extends approximately 140 m down dip and approximately 100 m along strike, and is open down dip and plunging to the west; to the east, mineralization is open for a minimum of 80 m along strike. The fault zone is variably mineralized, with both sinuous and regular quartz veining, pyrite, sphalerite, galena, chalcopyrite and electrum.

Gold deposits in the Tapajós Gold Province can be broadly classified into three main types:
- Mesozonal deposits;
- Epizonal intrusion centered or intrusion related deposits; and
- Alluvial, colluvial and supergene enriched saprolitic deposits.

The mineralogy and textures of the deposits at the Palito Mining Complex is consistent with a model for an intrusion related mesothermal gold-copper mineralization. This relatively new classification of gold deposits is associated with granitic rocks and are best developed above and surrounding small, granitic intrusions. Mineralization styles can manifest as stockworks, breccia, skarns and lode style veins, and have a clear metal association zonation.

Palito Mine
Mining of the narrow, near-vertical gold veins at the Palito Mine is undertaken using the shrinkage stoping method. During the first six months of 2017, Serabi mined 53,883 t of ore from Palito at an average grade of 8.29 g/t Au (~300 t/d).

Shrinkage stoping blocks are defined on the lower level by horizontal development mining along the vein, and a vertical raise is then driven to the top of the stoping block and ladders are installed so that men and materials can access the stope on each subsequent lift as mining advances upward.

Shrinkage stope mining progresses vertically beginning with the drilling of sub-vertical holes using hand-held pneumatic drills (stopers). The drill holes are loaded with explosives and the blasted ore is left in the stope except to the extent it is necessary to draw down the rock to leave an adequate distance between the working floor and the back. The ore left in the stope supports the walls and no installed ground support is typically required. Serabi extracts the broken ore via a series of crosscuts that are driven in waste from a footwall access. After a stope is mined to its full height, load-haul-dump (LHD) units are used to muck the remaining ore from the stope. The LHD units load haul trucks, which then transport the broken ore to the surface.

São Chico Mine
The São Chico Mine is a 140 t/d high grade, narrow vein longhole stoping operation that mined 25,010 t of gold bearing ore during the first six months of 2017 at an average grade of 10.18 g/t Au. Mining of the steeply dipping vein is by longitudinal longhole stoping methods using sublevels that are spaced at a nominal 15 m. Because structural backfill is not available and because mining takes place on multiple adjacent levels, rib and sill pillars are used to separate the ore blocks and maintain geotechnical stability. The top and bottom of each stope block is mined with horizontal development using a drift cross-section of 3.5 m high by 3.5 m wide. Longholes are drilled between levels and blasthole rings are fired in the direction of a conventionally driven slot raise that is mined on one end of the stope. Ore is mucked from the longhole stopes using LHDs. The LHDs load haul trucks, which then transport the broken ore to the surface. Once the ore reaches the surface, it is transported by road (approximately 30 km) from the São Chico Mine to the processing plant at the Palito site.

Serabi operates a 500 t/d plant to process ore from both the Palito and São Chico mines. Palito ore is processed through a flowsheet that includes crushing, grinding, copper flotation and CIP cyanidation of gold and silver values from the copper flotation tailing. The São Chico ore is processed in a separate grinding circuit that includes gravity concentration and intensive cyanide leaching of the gravity concentrate. The São Chico gravity tailing is combined and processed with the Palito copper flotation tailing in the CIP cyanidation circuit. In addition to Palito and São Chico ore, old flotation tailing stockpiles, which contain about 2.6 to 3.6 g/t Au, are processed by direct feedi into the CIP circuit. Gold and silver values extracted in the CIP circuit are adsorbed onto activated carbon. The “loaded” carbon is then eluted to remove the adsorbed gold and silver values into an upgraded solution that flows through electrowinning cells to recover gold and silver as a cathodic precipi ........