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Signs of foul play at Sarabi Gold?

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(Kitco News) - Serabi Gold (SRB:LSE) has confirmed that during the course of an audit in Brazil, that it has become aware that certain cash withdrawals made during 2020, and amounting to approximately US$80,000, lacked documentary support. Signs of foul play?

Adding to that astonishing admission the firm has now said:

"During the course of the Company's ongoing enquiries, further unsupported cash withdrawals have been identified dating back to 2015 of approximately US$120,000 (at current exchange rates), making the total level of unsubstantiated cash withdrawals approximately US$200,000. The Company has also identified a number of other potential irregularities relating to expense claims and other minor items which may require further review.".

To rectify the situation the company said it has conducted the termination of the employment contract of the managers and this may result in legal proceedings in Brazil involving the Company's subsidiary Serabi Mineracão SA.

Looking at the weekly chart below, it shows that the company's share price has fallen from 118.4p high around 39% to 71.6p today. There has been some bearishness today as the price is trading around -3.24% lower in early London trade. The next major support zone is some way down at the green horizontal line near 42p. If the situation does get swiftly resolved and the price does rise 89.8p looks like the next resistance zone to look out for. 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.