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Press Release: Serabi Gold plc :Notice of General Meeting and Special Meeting

13 Apr 2018 8:00 am

Serabi Gold plc :Notice of General Meeting and Special Meeting

For immediate release

13 April 2018

Serabi Gold plc

("Serabi" or the "Company")

Notice of General Meeting and Special Meeting(1)

The Company announces that a General Meeting will be held on Friday 11 May 2018, at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL England at 10.00 am (BST). The Company has published the formal notice of the meeting (the "Notice") on its website which can be accessed using the following link https://bit.ly/2JyNOSS. Proxy voting forms are being posted to all shareholders providing details of how to access the Notice and instructions for voting. A copy of the Notice together with proxy voting forms is being posted to all shareholders who are required to receive or have formally requested to receive these documents.

The Notice contains a letter from the Chairman of the Company, Mr Melvyn Williams, which is set out below in the Appendix.

(1) Certain resolutions to be proposed at the meeting will be special resolutions requiring approval of more than 75% of the votes cast. Under Canadian National Instrument 54-101, the meeting therefore also constitutes a Special Meeting.

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 
Ross Allister                  Tel: +44 (0)20 7418 8900 
James Bavister                 Tel: +44 (0)20 7418 8900 
 Public Relations 
Tim Blythe                     Tel: +44 (0)20 7138 3204 
Camilla Horsfall               Tel: +44 (0)20 7138 3224 

Copies of this announcement 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 announcement.


The letter from the Chairman of the Company included in the Notice is reproduced below (without material adjustment):

Dear Shareholder


On 29 March 2018, the Company announced it had raised GBP6.36 million (approximately US$9.0 million) (before expenses) by way of a Placing to institutional and other investors at a price of 3.6 pence per Ordinary Share (the "Placing").

The Placing will raise a total of cGBP5.94 million (after expenses) for the Group and result in the issue of 176,678,445 Ordinary Shares. The Placing is conditional upon, among other things, approval of the Resolutions to authorise the Directors to issue the Placing Shares at the General Meeting.

The purpose of this document is to explain the background to and reasons for the Placing and to provide the formal notice (the "Notice") of the General Meeting to be held at the offices of Travers Smith LLP, 10 Snow Hill, London EC1A 2AL, England on 11 May 2018 at 10 a.m. (London time) at which the Resolutions to approve the Placing will be proposed. This document also includes additional information that the Company as a reporting issuer in Canada is required to make available pursuant to the requirements of National Instrument 51-102 - Continuous Disclosure Obligations ("NI 51-102") of the Canadian Securities Administrators.

Background to and reasons for the Placing

On 23 March 2018, the Company announced that Greenstone, a leading mining focussed private equity group, had agreed to invest US$15.0 million in the Company by way of a subscription for 297,759,419 shares at a price of 3.6 pence per share (the "Greenstone Subscription").

As announced on 23 March 2018, the Greenstone Subscription was in response to the Company's view that whilst it can be cash generative and profitable at current levels of production, it needs to grow in order to attract a wider investor base and generate long term value for shareholders. Under the terms of the Subscription Agreement, 297,759,419 Ordinary Shares were issued to Greenstone at the 3.6 pence per Ordinary Share pursuant to the Subscription on 12 April 2018.

The Greenstone Subscription is considered to be an endorsement of Serabi, its management, its projects and its strategy for achieving growth and building value as Greenstone is a respected and experienced private equity fund focussed solely on mining.

Following positive feedback from the Greenstone Subscription, the Company decided to pursue a placing to give access to further capital and to widen its shareholder base through the introduction of new institutional investors who are also supportive of the Company's plans and ambitions. The further funds raised pursuant to the Placing will allow the Company to accelerate further exploration and evaluation work at Palito, Sao Chico and Coringa and develop additional growth opportunities as the Company moves towards its targeted production of 100,000 ounces of gold per annum.

As announced on 23 March 2018, as well as providing working capital for the Company's recently acquired Coringa Gold Project, the Greenstone Subscription will allow the Company to expand its current 8,000 metre drill programme. This current programme is focusing on step-out drilling on the current Palito mineral resources, and the Greenstone Subscription allows the Company to continue this programme at Palito beyond the current 8,000 metres, as well as commence drilling at Sao Chico, where drilling will focus on step-out drilling within the mining tenement as well as drilling the geophysical anomalies identified in 2016. The Company intends to use part of the Placing proceeds to complete a Phase 2 drilling programme, which comprises drilling the 2011 discoveries at Palito which do not currently form part of the Group's mineral resources, whilst at Sao Chico step out drilling will be undertaken along strike and beyond the limits of the current mining tenement.

The Placing proceeds will also enable Serabi to accelerate its regional exploration programme and enable the early repayment of US$3 million of the Company's total US$8 million loan with Sprott Resource Lending Partnership.

With a clear pathway to achieving growth, a strong balance sheet and a supportive shareholder base, the Company considers the Subscription and the Placing collectively represent a transformative event, that will allow it to accelerate its growth plans, place it in a strong position when considering further acquisitions and create the critical mass that is important when looking to maximise the financing options available to the Company to advance, develop and grow its gold projects.

The Placing

As announced on 29 March 2018, the Placing has been conducted through an accelerated bookbuilding process undertaken by Peel Hunt acting as sole bookrunner. The Placing is not underwritten and is subject to the conditions and termination rights set out in the Placing Agreement.

The Placing is conditional upon, among other things, the approval of the Resolutions at the General Meeting, Placing Admission becoming effective and the Placing Agreement becoming unconditional and not being terminated in accordance with its terms.

The Ordinary Shares to be issued pursuant to the Placing will rank pari passu with the Existing Ordinary Shares.

Subject to shareholder approval at the General Meeting and the satisfaction or waiver of the other conditions, application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM ("Placing Admission"). It is expected that Placing Admission will take place at 8 a.m. on or around 14 May 2018 and in any event no later than 14 June 2018. Concurrently the Placing Shares will be listed for trading on the TSX.

At the General Meeting, the Company will be seeking to pass both an ordinary and special resolution (which will require votes in favour from at least 75% of the Ordinary Shares present and voting at the General Meeting) in order to give the Directors authority to allot the Placing Shares on a non-pre-emptive basis.

Use of proceeds

The Directors intend to use the proceeds from the Placing as follows:
Use of Placing proceeds 
Coringa Drilling                                   US$2m 
Regional Exploration (airborne geophysics)         US$1m 
Drilling programme Palito and Sao Chico - Phase 2  US$2m 
Retirement of Sprott Loan                          US$3m 
Corporate Working Capital                          US$1m 
Total                                              US$9m 

As announced on 23 March 2018, the proceeds of the Greenstone Subscription will be used as follows:
Use of proceeds 
Second Installment of acquisition payment for Coringa  US$5m 
 project which following agreement with the vendors 
 is now due on 16 April 2018 
2018 Working Capital for Coringa                       US$4m 
Expansion of Drilling programme Palito and Sao Chico   US$4m 
 - Phase 1 
Corporate Working Capital                              US$2m 
Total                                                  US$15m 

Relationship Agreements

Following completion of the Placing, Fratelli will hold a 32.88% interest and Greenstone will hold a 25.34% interest in the Enlarged Issued Share Capital. Accordingly, both will remain bound by their relationship agreements, the terms of which were announced on 23 March 2018 ("Relationship Agreements").

These agreements include protections to ensure Serabi is able to continue to operate independently of these two major shareholders and ensure that the Company always has two independent non-executive directors but also provides Greenstone and Fratelli with certain rights with respect to the Company.

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