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Serabi Gold plc ("Serabi" or the "Company") Issue of 270,000,000 Ordinary Shares at 6 Pence per Share Dealings by the Directors

LONDON -- (Marketwire) -- 01/17/13 -- Serabi (AIM: SRB) (TSX: SBI), the Brazilian focused gold exploration and development company, announces that the conditional subscription by Fratelli Investments Limited and parties acting in concert with it (the "Concert Party") has been completed, conditional upon admission of the new Ordinary Shares to AIM and the TSX.

On 1 October 2012, the Company entered into a conditional subscription agreement with Fratelli Investments to subscribe for and underwrite a placement of new Ordinary Shares to raise £ 16.2 million to finance the development and start-up of underground mining operations at its Palito gold mine. The investment by Fratelli Investments took the form of:

(a) A subscription for 90,403,000 new Ordinary Shares at the Subscription Price of 6 pence per new Ordinary Share; and
(b) A conditional subscription for up to a further 179,597,000 new Ordinary Shares at a subscription price of 6 pence per new Ordinary Share, such number to be reduced by any subscriptions for new Ordinary Shares from third party investors.

Of the 270,000,000 shares that have been issued pursuant to the subscription arrangements raising gross proceeds of UK£ 16.2 million, the Company has procured third party subscribers for 81,350,353 new Ordinary Shares and accordingly, the total subscription by the Concert Party amounted to 188,649,647 new Ordinary Shares, as detailed below in this announcement.

Mr. Michael Hodgson commenting on the announcement of the completion of the Subscription said:

"I would like to record the thanks of myself and the rest of the Board to Fratelli Investments. Their support will allow the management of the Company to continue the development of the Palito Gold Mine and ensures an exciting future for the Company. Their willingness to underwrite the share placement is, I believe, a demonstration of their belief in the Palito project and the opportunity that we have to develop a robust and bigger gold company around this."

Following completion of the issue of 270,000,000 Ordinary Shares the Company is aware of the following notifiable interests in the Enlarged Ordinary Share Capital:

                                                         Percentage interest
                                                             in the Enlarged
Shareholder                              Shares held in       Ordinary Share
                                            the Company              Capital
Fratelli Investments Limited                184,695,647                51.1%
The Concert Party                           207,906,964                57.5%
Anker Holding AG                             40,000,000                11.1%
Drake PIPE Fund                              31,119,686                 8.6%
Fondo de Inversion Privado Santa Monica      22,443,947                 6.2%
Eldorado Gold Corporation                    21,340,000                 5.9%

Mr. TS Harvey, Mr. CM Line and Mr. M Williams, directors of the Company, all subscribed for Subscription Shares. In addition, Anker Holding AG, a company beneficially owned by the spouse of Mr. C Kingsman, who is a director of the Company, also subscribed for Subscription Shares. The subscriptions by the Directors and parties related to the Directors and their interest in the Ordinary Shares of the Company following completion of the Subscription are as follows:

                                                     Shares held  Percentage
                                                          in the interest in
                           Shares held                   Company         the
Director and/or related         in the                 following    Enlarged
 party                         Company Subscription   completion    Ordinary
                          prior to the       Shares       of the       Share
                          Subscription   subscribed Subscription     Capital
Anker Holding AG (Note 1)   18,851,000   21,149,000   40,000,000       11.1%
Mr. TS Harvey                  200,000    1,000,000    1,200,000        0.3%
Mr. CM Line                    417,653      300,000      717,653        0.2%
Mr. M Williams                  45,000      250,000      295,000        0.1%

Note 1 Anker Holding AG is beneficially owned by the spouse of Mr. C
       Kingsman who is a director of the Company

As Anker Holding AG is interested in more than 10 per cent. of the Existing Ordinary Share Capital and Mr. TS Harvey, Mr. CM Line, Mr. M Williams and Mr. C Kingsman are all directors of the Company (the "Subscribing Directors"), the subscription by Anker and the Subscribing Directors is a related party transaction for the purposes of Rule 13 of the AIM Rules. For the purposes of the AIM Rules, the independent Directors of Serabi, (being Mr. M Hodgson, Mr. D Jones and Mr. E Rosselot), having consulted with the Company's nominated adviser, consider that the subscription by Anker and the Subscribing Directors pursuant to the Subscription is fair and reasonable insofar as the Shareholders are concerned. The independent Directors have taken into account in particular that Anker and the Subscribing Directors are each subscribing on the same terms and conditions as the Concert Party and the other subscribers for new Ordinary Shares procured by the Company from unconnected third parties, and which has been approved by Independent Shareholders on a poll.

The Subscriptions of the Concert Party are as follows:

                              Minimum   subscribed
                         Subscription for pursuant              New Warrants
                               Shares       to the        Total    issued on
                           subscribed  Conditional Subscription   Completion
Concert Party Member              for Subscription       Shares     (Note 5)

Fratelli Investments
 Limited (Note 1)          90,403,000   76,676,647  167,079,647    8,135,035
Piero Solari Donaggio
 (Note 2)                           -            -            -            -
Sandro Solari Donaggio
 (Note 2)                           -            -            -            -
Carlo Solari Donaggio
 (Note 2)                           -            -            -            -
Nicolas Bañados (Note 3)            -   20,840,000   20,840,000            -
Jorge Arancibia Pascal
 (Note 4)                           -      730,000      730,000            -
Total                      90,403,000   98,246,647  188,649,647    8,135,035

Note 1 Fratelli Investments Limited is a 99.9 per cent. owned subsidiary of
       Inversiones Menevado Dos Limitada which is itself a 99.97 per cent.
       owned subsidiary of Inversiones Menevado Limitada which is itself a
       96.92 per cent. owned subsidiary of Inversiones Megeve Capital
       Limitada. The shareholders of Inversiones Megeve Capital Limitada
       comprise Asesorias e Inversiones Barolo Limitada, which is controlled
       by Piero Solari Donaggio and his dependants, Asesorias e Inversiones
       Brunello Limitada, which is controlled by Sandro Solari Donaggio and
       his dependants and Asesorias e Inversiones Sangiovese Limitada, which
       is controlled by Carlo Solari Donaggio and his dependants. Further
       details are set out below in Part II of the Document.
Note 2 Piero Solari Donaggio, Sandro Solari Donaggio and Carlo Solari
       Donaggio are the sole directors and the ultimate beneficial
       shareholders of Fratelli Investments.
Note 3 Nicolas Banados, an attorney-in-fact of Fratelli Investments, is the
       beneficial owner of 50 per cent. of the share capital of Asesorias e
       Inversiones Asturias Limitada which beneficially owns 25 per cent. of
       the units in Fondo de Inversion Privado Santa Monic, which subscribed
       for 20,840,000 Subscription Shares.
Note 4 Jorge Arancibia Pascal, an attorney-in-fact of Fratelli Investments,
       is the beneficial owner of 85 per cent. of the share capital of
       Asesorias e Inversiones Hipa Limitada, which subscribed for 730,000
       Subscription Shares.
Note 5 Fratelli Investments has been issued with one New Warrant for every
       ten Third Party Share subscribed for by third parties as an
       underwriting fee pursuant to the Subscription Agreement.

Immediately following completion of the Subscription, the Concert Party's interest in the Company (and assuming full conversion of all warrants held at completion by the Concert Party), will therefore be as follows:

                       Interest                       Interest in Percentage
         Interest in         in                           Diluted of Diluted
            Enlarged   Enlarged                          Enlarged   Enlarged
            Ordinary   Ordinary   Existing        New    Ordinary   Ordinary
Concert        Share      Share   Warrants   Warrants       Share      Share
 Party    Capital on Capital on         on  issued on  Capital on Capital on
 Member   Completion Completion Completion Completion  Completion Completion
                       (Note 1)                                     (Note 2)
 Limited 184,695,647     51.12%  2,270,833  8,135,035 195,101,515     52.46%
 Donaggio          -          -          -          -           -          -
 Donaggio          -          -          -          -           -          -
 Donaggio          -          -          -          -           -          -
 Bañados  22,443,947      6.21%    216,666          -  22,660,613      6.09%
 Pascal      767,370      0.21%          -          -     767,370      0.21%
         207,906,964     57.55%  2,487,499  8,135,035 218,529,498     58.76%
Note 1 The Enlarged Ordinary Share Capital comprises the Existing Ordinary
       Shares and the Subscription Shares.
Note 2 The Diluted Enlarged Ordinary Share Capital comprises the Existing
       Ordinary Shares, the Subscription Shares, the new Ordinary Shares
       issued on exercise of the Existing Warrants and the new Ordinary
       Shares issued on exercise of the New Warrants.

On Completion of the Subscription Fratelli Investments Limited and the Concert Party will hold more than 50 per cent. of the Company's voting share capital, and accordingly, Fratelli Investments Limited and the Concert Party may be able to increase its aggregate shareholding in the Company without incurring any obligation under Rule 9 to make a general offer to the Company's other Shareholders. Under the Takeover Code, whilst each member of the Concert Party continues to be treated as acting in concert, each member will be able to increase further his respective percentage shareholding in the voting rights of the Company without incurring an obligation under Rule 9 to make a general offer to Shareholders to acquire the entire issued share capital of the Company. However, individual members of the Concert Party will not be able to increase their percentage shareholding through or between a Rule 9 threshold, without the consent of the Panel.

Application will be made for the Subscription Shares to be admitted to trading on AIM. It is expected that Admission will become effective and dealings in the Subscription Shares will commence on 23 January 2013. The new Ordinary Shares will when issued and fully paid, rank in all other respects pari passu with the Existing Ordinary Shares in issue including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

Fratelli Investments also provided on 1 October 2012 an interim secured short term loan facility of US$6 million (equivalent to approximately £ 3.8 million at the exchange rate of £ 1:US$1.59 as at 2 October 2012) to the Company to provide additional working capital to the Company and to enable the Company to commence the necessary mine development and plant refurbishment works immediately. As at 16 January 2013, the last practicable date prior to the publication of this announcement, US$4.5 million had been drawn down under the short term loan facility. The Company will repay the Loan Agreement from the proceeds of the Subscription. Interest charges that will have accrued under the Loan Agreement, assuming that the loan facility is re-paid on 18 January 2013 from the proceeds of the Subscription, have been calculated as US$107,375. Fratelli have confirmed to the Company that they will not seek penalty interest charges in the early repayment of the loan that could have applied under the original terms of the Loan Agreement.

Copies of this release are available from the Company's website at

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

                                 APPENDIX 1
   The following words and expressions apply throughout this announcement
                    unless the context requires otherwise:

"Admission"                         admission of the Subscription Shares to
                                    trading on AIM becoming effective in
                                    accordance with the AIM Rules for
"AIM"                               AIM, a market of that name operated by
                                    the London Stock Exchange
"City Code" or "Takeover Code"      the City Code on Takeovers and Mergers,
                                    as updated from time to time
"Company" or "Serabi"               Serabi Gold plc
"Completion"                        the Subscription being completed and
                                    Admission taking place
"Concert Party"                     Fratelli Investments Limited, its
                                    Connected Persons and other persons
                                    acting in concert with it, as described
                                    in Part II of the Document
"Diluted Enlarged Ordinary Share    371,891,063,728 Ordinary Shares
 Capital"                           comprising the Existing Ordinary Shares,
                                    the Subscription Shares, 2,487,499 new
                                    Ordinary Shares to be issued on full
                                    exercise of the Existing Warrants and
                                    8,135,035 new Ordinary Shares to be
                                    issued on full exercise of the New
"Document"                          the circular to Shareholders dated 11
                                    December 2012 in relation to the
                                    proposals including the notice of
                                    General Meeting
"Enlarged Ordinary Share Capital"   the issued equity share capital of the
                                    Company immediately following Admission
                                    comprising the Existing Ordinary Share
                                    and the Subscription Shares
"Existing Ordinary Shares"          the existing 91,268,529 issued Ordinary
                                    Shares as at the date of this
                                    announcement and the Document
"Existing Ordinary Share Capital"   the issued equity share capital of the
                                    Company as at the date of this
                                    announcement and the Document
"Existing Warrants"                 the existing 2,487,499 warrants to
                                    subscribe for new Ordinary Shares owned
                                    by Fratelli Investments and Fondo de
                                    Inversion Privado Santa Monica as at the
                                    date of the Document
"Fratelli Investments"              Fratelli Investments Limited, a company
                                    registered in the Bahamas with
                                    registered number 136,354 B
"General Meeting"                   the general meeting of the Company
                                    convened for 10.00 a.m. on 16 January
                                    2013, the notice convening which was set
                                    out at the end of the Document
"Loan Agreement"                    the US$6 million loan facility dated 1
                                    October 2012 provided to the Company by
                                    Fratelli Investments, details of which
                                    are set out in Part IV of the Document
"New Warrants"                      8,135,035 new Warrants to subscribe for
                                    new Ordinary Shares at a price of 10
                                    pence per Ordinary Shares to be issued
                                    to Fratelli Investments pursuant to the
                                    Subscription Agreement
"Ordinary Shares"                   the ordinary shares of 5 pence each in
                                    the capital of the Company
"Panel"                             Panel on Takeover and Mergers
"Rule 9"                            Rule 9 of the Takeover Code
"Rule 9 Offer"                      the requirement for a general offer to
                                    be made in accordance with Rule 9
"Shareholders"                      Person(s) who is/are registered
                                    holder(s) of Ordinary Shares from time
                                    to time
"Subscription"                      the conditional subscription by Fratelli
                                    Investments to subscribe for and
                                    underwrite a placement of up to
                                    270,000,000 new Ordinary Shares, further
                                    details of which are set out in Part I
                                    of the Document
"Subscription Agreement"            the agreement dated 1 October 2012
                                    between (1) the Company and (2) Fratelli
                                    Investments, further details of which
                                    are contained in Part IV of the Document
"Subscription Price"                6 pence per Subscription Share
                                    270,000,000 new Ordinary Shares to be
"Subscription Shares"               issued pursuant to the Subscription
"Third Party Shares"                up to 179,597,000 Subscription Shares
                                    available for subscription by third
                                    party investors
"Waiver"                            the waiver granted by the Panel (subject
                                    to the passing of the Whitewash
                                    Resolution) in respect of the obligation
                                    of the Concert Party to make a mandatory
                                    offer for the entire issued share
                                    capital of the Company not already held
                                    by the Concert Party which might
                                    otherwise be imposed on the Concert
                                    Party under Rule 9 of the Takeover Code
                                    as a result of the issue of Subscription
                                    Shares under the Subscription, as more
                                    particularly described in paragraph 7 of
                                    Part I of the Document
"Warrants"                          the warrants to subscribe for new
                                    Ordinary Shares further details of which
                                    are set out in paragraph 2.5 of Part IV
                                    of the Document

Serabi Gold plc
Michael Hodgson
Chief Executive
Tel: +44 (0)20 7246 6830
Mobile: +44 (0)7799 473621

Clive Line
Finance Director
Tel: +44 (0)20 7246 6830
Mobile: +44 (0)7710 151692

Email: [email protected]

Beaumont Cornish Limited
Nominated Adviser
Roland Cornish
Tel: +44 (0)20 7628 3396
Michael Cornish
Tel: +44 (0)20 7628 3396

Fox Davies Capital Ltd
UK Broker
Simon Leathers
Tel: +44 (0)20 3463 5010
Jonathan Evans
Tel: +44 (0)20 3463 5010

Blythe Weigh Communications Ltd
Public Relations
Tim Blythe
Tel: +44 (0)20 7138 3204
Rob Kellner
Tel: +44 (0)20 7138 3204

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