Q4 Investor Update

Serabi Mining plc
24 January 2007

SERABI MINING plc ('Serabi' or 'the Company')

QUARTERLY INVESTOR UPDATE



Serabi Mining plc ('Serabi' or 'the Company') advises that today it has
dispatched to shareholders its investor newsletter for the fourth quarter to
December 31, 2006



The company has highlighted in its newsletter the following matters. The full
version of the quarterly update is available from Serabi's offices or from the
Company's website www.serabimining.com.



> Expansion projects at the Palito mine result in 127% year-on-year
  production increase to 39,197 oz gold equivalent in 2006, compared with 17,261
  oz in 2005

>  Record quarterly production of 11,687 oz gold equivalent achieved in 
   December, a 20% increase over the third quarter

>  Further positive production developments expected at Palito early in 2007 
   with the introduction of additional mining equipment and increased use
   of new mining method

>  Commissioning of new mill significantly increases process capacity

>  Follow-up work at various Jardim do Ouro projects highlights further 
   potential close to the Palito mining operation


                                           Palito - Operating Results

                                                        2006(1)                                       2005

                             Q1            Q2             Q3             Q4        Year-end(2)      Year-end
Total mined         t      32,820        34,055         42,357         42,007        151,239         54,993
(per day)                  (365)         (374)          (460)          (457)          (414)           (151)

Mined ore           t      31,555        31,864         34,598         34,072        132,089         54,993
(per day)                  (351)         (350)          (376)          (370)          (362)           (151)

Milled              t      25,514        29,851         29,492         32,760        117,618         57,958
(per day)                  (283)         (328)          (321)          (356)          (322)           (159)

Head grade         g/t      9.3           9.7            9.2            9.4            9.4             9.2

Recovery            %       91.9          91.3           91.4           91.0           91.4           89.4

Gold               oz      7,017         8,527          7,974          8,980          32,498         15,345

Copper              t       98.0         107.1          139.2          224.6          568.9           216.2

Gold equivalent    oz      7,927         9,815          9,768          11,687         39,197         17,261
(3)



(1) Provisional   (2) Reflects rounding and/or minor adjustments at year-end
(3) Includes Copper and Silver



PALITO MINE

Mining

Improved underground mining rates continued into the fourth quarter, with a
year-on-year increase of almost 175% and more than four fold since the beginning
of 2005. The challenge is now to establish sufficient access drives and
development fronts necessary to maintain and grow production further. To assist
in this regard important progress has recently been made with the following
items:

•  Production development drives established on levels 210m RL and 192m RL

•  Phase-2 decline extension completed to access deeper ore on the next level 
   at 178m RL

•  Additional Jumbo drill and LHD loader purchased, due on site Q1



Supported by these developments, the first long-hole stope mining commenced
shortly before the end of December on 210m RL.  Early results have been
successful, with good ore extraction and limited dilution.  As more development
drives are completed and additional equipment arrives, mining this year will
increasingly transition to long hole stoping at depth, resulting in improved
production and efficiencies throughout the year.



Plant

The new Mill-4 was placed on its foundations late in November and following
additional engineering and test work, was successfully commissioned shortly
before Christmas. Initial results have been very good with daily mining rates
subsequently averaging over 450 tonnes. Even before the introduction of Mill-4
throughput from the existing mills had shown some improvement over the prior
periods as earlier problems were overcome.  However, the success of Mill-4 now
enables additional maintenance on the existing mills, notably Mill-3, which can
then be used either as back-up or for additional capacity depending on future
requirements.



EXPLORATION, DEVELOPMENT AND GENERAL OUTLOOK

After more than two year's operating at Palito extensive underground mining and
development has demonstrated the good continuity of ore mineralisation.
High-grade ore shoots ('cheroots') found at Palito, show that discreet
mineralised zones can extended more than 200 metres on strike, averaging 1 to 2
metres width, with localised grades often exceeding 50g/t gold and more than 1%
copper. In a number of places the same mineralised features have been mined over
at least 100 metres down-dip and still remain open at depth.  Such continuity
forms a good foundation for future mining.



Drilling in 2005 extended the Palito Main Zone (PMZ) mineralisation from 20 to
54 veins, from 900 metes to 1,050 on strike and from 125 metres to 220 metres
depth, whilst remaining open in all directions. Further work in 2006 has
continued to confirm these trends, highlighting similar NW-SE, steeply dipping
high-grade veins across a structural corridor at least 500 metres in width.
Together with other nearby projects in the Jardim do Ouro district, these
features will form primary evaluation targets during 2007 that could eventually
result in the development of satellite operations from which to feed the
centrally located process plant at Palito.



Evaluation work during the fourth quarter focussed on such advanced projects at
Jardim do Ouro, notably Bill's Pipe, Ruari's Ridge, Palito West, Sao Chico and
Rio Nova South.  Significant gold showings have been identified at each of these
locations, associated with known sulphide mineralisation similar to that
currently being mined at Palito.  We expect to provide further results from
these programmes during the first quarter



With commercial production established at Palito and having expanded the
company's support facilities, Serabi is now well placed to build on its
strategic position.  Deployment of four surface and three underground drilling
rigs, combined with improved systems, will greatly assist future evaluation and
development programmes.  In this regard last year's achievements and objectives
for 2007 are summarised in the following table.


                                       2006 Progress and 2007 Objectives

         Period             2006 Achievements                                 2007 Objectives

Palito Mine     • Commercial production declared October 2006     • Production of 50,000oz gold equivalent

                • Mining and mill rates increased to over 450     • Improve operating efficiencies and lower
                  tpd                                               cash costs to approximately US$225 /oz

                • Phase 1 and 2 decline completed, trackless      • Assess and develop initiatives to expand
                  mining and long hole stoping underway             production

                • Infrastructure and capital projects to          • Complete long term mine plan
                  support near term production targets completed


Palito Mine     • Global PMZ resource increased 74% to            • Improve resource definition for mine
Resources         825,900 oz of gold equivalent                     planning

                • Introduction of underground drilling            • Continue PMZ strike and depth drilling
                  improves definition of mining resources


Exploration and • Geological support facilities expanded          • Escalate assessment and acquisition of
development                                                         projects through increased exploration budget
                • Four surface exploration drill rigs               from US$3 million to US$5 million
                  operating


Jardim do Ouro  • Assessment of projects reaches an advanced      • Drill priority targets and establish new
                  stage as drilling gets underway                   resource areas for potential mining


Tapajos         • Exploration starts on regional projects         • Identify at least one priority project and
Projects                                                            establish preliminary resource for possible
                • Preliminary drill programme completed at          mining
                  Pombo
                                                                  • Instigate assessment of potential large
                                                                    tonnage projects


Corporate       • Institutional funding £2.60m @ 40p              • Expand investor initiatives

                • Developed institutional and retail investor     • Consolidate strategic position
                  relations programme
                                                                  • Consider new opportunities in Brazil



GENERAL



The benefits of widespread investment at the Palito mine were evident throughout
last year, but none more so than in the fourth quarter, in which production
reached 11,687 oz gold equivalent, a 20% increase on the previous quarter or
111% compared with the same period in 2005. In addition, throughout 2006 all key
production measures showed good improvement, resulting in annual production
growth of 127% to 39,197 oz gold equivalent.



We have already set a provisional target for Palito in 2007 of 50,000 oz gold
equivalent and cash operating costs of approximately US$225 per ounce, these
results highlight considerable progress towards these goals.  Furthermore, a
number of items are already set to impact on first half results this year:
decline access recently completed to the next level, the purchase of additional
mining equipment, increased use of long-hole stoping and increased process
capacity following the successful commissioning of the new fourth ball mill at
the end of 2006.  In addition to the potential direct impact on production,
these developments are also expected to result in improved reliability,
efficiencies and safety.



Meanwhile, investigations previously highlighted on other initiatives that could
result in additional  improvements to production, have reached an advanced
stage, notably an open pit study and test work on the use of an upgrade process
to beneficiate lower grade material.  The possible introduction of such an
upgrade circuit would have major positive economic implications for the Palito
mine and, in particular, potential satellite resources.  Results from these
studies are expected during the first quarter of 2007.



Against this background the focus during 2007 remains similar to that of last
year but with some important distinctions:

(i)   Increased production, accompanied by improved efficiencies, leading to
      stable cash flow generation that can be used to grow the company

(ii)  The establishment and development of additional resources at Jardim do
      Ouro, across the Tapajos and potentially elsewhere in Brazil

(iii) Continue to strengthen the position of the company through the above and
      other initiatives



Resources and management time has by necessity, been largely focused on making a
success of the Palito mine and establishing assets and facilities from which to
build on the success of Palito in the future.  Having now achieved many of these
goals at Palito increased emphasis will now be placed developing the company
from its strong foundation, which we expect will become increasingly evident
during 2007.



2006 SHARES AND MARKET FOCUS



2006 was a year of three parts. The period to early May, dominated by a rampant
gold price and ever higher base metal prices too, saw investor interest surge
and share prices alike.  After the gold price reached a 26-year high of US$725/
oz on May 12, the sector turned down until early October as a result of
subsequent price weakness accompanied by a number of AIM market 'casualties',
after which a limited degree of interest has slowly returned. While mirroring
these general trends, the price of Serabi shares showed a strong out-performance
of the sector through much of the year before coming in line since late summer
onwards.  Most notably the liquidity of the shares has significantly improved
during 2006, with turnover of the public float increased from 20% in 2005 to 64%
last year.



As an established producer current metal prices still remain very beneficial to
Serabi and have enabled ongoing capital projects to be funded from the operating
cash flow being generated at the Palito mining operation. The outlook for
continued production growth combined with a reduction of operating costs in 2007
will further strengthen this position and provides an important distinction for
Serabi in the AIM mining sector.


Serabi Share Information
Listed:                            London AIM
Ticker:                            SRB
Basic shares:                      110.75 million
Fully Diluted shares:              123.47 million
Public Float:                      63%
Share Turnover *  2006             64%
2005                               20%
* percentage of public float



ENQUIRIES

Serabi Mining plc                            Numis Securities Limited
Graham Roberts    Tel: [phone]         John Harrison   Tel: [phone]
Chairman          Mobile: [phone]       James Black     Tel: [phone]


Clive Line        Tel: [phone]         Parkgreen Communications
Finance Director  Mobile: [phone]      Simon Robinson  Tel: [phone]


E-mail:           [e-mail]   Clare Irvine    Tel: [phone]
Website:          www.serabimining.com       [e-mail]


                      This information is provided by RNS
            The company news service from the London Stock Exchange