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.

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 high grade, narrow vein longhole stoping operation. 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.

Underground Mine Access
A 4.5 m high x 4.5 m wide ramp system (-12% gradient) provides access to the underground portions of the Palito and São Chico mines. The portal at the Palito Mine is located at elevation 235 meters above sea level (masl), and the deepest level is -50 masl. At São Chico, the portal is located at elevation 224 masl, and the deepest level is currently 10 masl.

Crushing
Stockpiled run-of-mine (ROM) ore is fed to the crushing circuit at an average rate of 23 t/h using a front-end wheel loader. The ore is fed to a jaw crusher using a vibratory grizzly where it is crushed to a nominal size of 60 mm. A conveyor transports the primary crushed ore to a double-deck vibrating screen with a top deck screen size of 30 mm and a bottom deck screen size of 15 mm. The +30 mm material reports to the secondary crusher and the -30 mm+15 mm material reports to two tertiary crushers operating in parallel. The secondary and tertiary crushers are operated in closed circuit with the double-deck screen and are set to produce a product of less than 15 mm. The final minus 15 mm product is transported via a stacker conveyor to crushed ore stockpiles.

Due to the high variability of the Palito and São Chico ROM ore, material from each front and stope in both the mines is crushed separately on a batch basis and stockpiled individually. The crushed ore product from each batch is sampled as it falls onto the product conveyor. After analysis of each sample, the separate stockpiles are blended using a front-end wheel loader in such a way as to produce a consistent mill feed blend. The ore is blended as it is loaded into trucks, which are then weighed and transported to mill feed stockpiles.

Grinding
Palito and São Chico ores are transported and loaded into separate 200 t fine ore bins at the process plant. Both Palito and São Chico ore are weighed as they are conveyed to the grinding circuit and sampled every 30 minutes with automatic cross-cut samplers. Palito ore is fed to two ball mills (2.3 m diameter x 3.1 m long and 2.1 m diameter x 3.4 m long) operating in parallel and in closed circuit with 250 mm diameter cyclones to produce a final ground product size of 80% passing (P80) 120 µm which is then conditioned and fed to the copper flotation circuit. São Chico ore is fed to one ball mill (2.1 m diameter x 3.4 m long) operated in closed circuit with a Falcon SB-750B centrifugal concentrator and a 250 mm diameter cyclone to produce a final grind size of P80 120 µm which is advanced directly to the CIP cyanidation circuit along with the Palito copper flotation tailing.

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 carbonin- pulp (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 directly feeding this material 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 g ........