President's Letter to Shareholders

October 31, 2018

Dear Fellow Shareholders,

It’s been an exceptionally busy last 6 months for all of us at Serengeti. As you know, the Kwanika project has been our main focus this year with ongoing prefeasibility studies (PFS) underway, including a new round of drilling (7,400m of core in 21 holes) completed in early September. Last week, we released the results for the first 2 holes in the Central Zone deposit. These very positive drill results including 514 metres grading 0.64% Copper and 0.80 g/t gold in drill hole K-180 were well received by the market, resulting a SIR rerating on significant trading volume. 

As I stated back in January, the overall objective of the Kwanika PFS is to identify the best alternatives to optimize project design and find ways to further improve project economics. In that context, this year’s drilling was a delineation program in support of the on-going PFS work. The program was designed to increase the certainty of the mineral resources, because grade and tonnage are always one of the key inputs into a financial model for a mine.

I commented in the recent news release that holes K-180 and 181 returned long intervals with excellent copper and gold grades within the potential open pit domain and potential underground domains outlined in the PEA. This is an important result that could potentially have a positive impact on both the open pit and underground resource tonnages and grades. Specifically, we’re hoping that we’ll see an increase in the underground gold grades once all of this year’s results are released over the coming weeks and included into a new mineral resource estimate early in the new year. If we are successful on both these fronts, we could potentially see higher-margin project economics as we roll this new data into the PFS.

Another economic input that we’ll be looking at is the project’s capital expenditure (capex). Our engineers are reviewing the possibility of deferring some of the initial capex for the underground phase by expanding the open pit mine life. This then could lead to using cash flow to fund additional capital obligations and   ultimately have a substantial, positive impact on the project economics. 

There’s clearly lots for our engineers to work through ahead of completion of the PFS in mid-2019, but we’re off to a very good start with the new drilling. The coming year should be an exciting one for the Company and I hope to outline our plans and objectives for Kwanika for the coming 6-9 months in a news release during November so please look out for that.  We’ll also continue to release results from this year’s drilling at Kwanika. Look for regular website updates as new technical information becomes available.

On the exploration front things are shaping up well. We have two, advanced exploration bets at Atty and Croy Bloom properties where we’ve identified terrific drill targets for testing next year and we have yet to report on exploration carried out on a number of our early stage properties this past summer.

On the marketing front, we’ll be getting out and meeting existing and potential investors in November. There’s a busy schedule planned culminating in Serengeti attending the 121 conference in London, England in late November. Closer to home we are participating in porphyry copper deposit technical   session at University of British Columbia in early November.

As always, we welcome your calls and emails, or you can visit our website at  www.serengetiresources.com  or follow us on twitter at @SIResources to track our progress. Thank you for your continuing interest and support.

Yours truly,

David W. Moore
President & CEO

© 2018 Serengeti Resources Inc.
All rights reserved.

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