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Shanta Gold firing on all cylinders as Q2 production touches new record

Shanta Gold appeared to be firing on all cylinders after it reported record first quarter production from the New Luika mine in Tanzania.
Shanta Gold firing on all cylinders as Q2 production touches new record

Shanta Gold (LON:SHG) appeared to be firing on all cylinders after it reported record second quarter production from the New Luika mine in Tanzania.

It unearthed 21,940 ounces of the precious metal in the second quarter, up 8% on the prior three months, while sales were 22,400 ounces at US$1,307 an ounce. The group said all in sustaining cash costs were US$959.

The group has revised its production guidance: it said output will be 80-83,000 ounces this year compared with its previous forecast of 80,000 ounces.

Shanta expects all sustaining costs to be in the order of US$900 to US$1,000.

In a wide-ranging update, the AIM-listed company said its elution-electro-winning plant commissioned in May is “operating well” with recoveries up to 86% in June.

Meanwhile, the commissioning of a crushing and screening circuit is scheduled for the end of August.

Shanta also confirmed the New Luika life of mine extension and expansion study is on course for completion later this quarter, while the Singida mine development feasibility study is “progressing”.

It has also revealed some positive drill results at New Luika.

Financially, the firm is well set. It has cash balances of US$15.5mln, while cash flow from operations was US$7mln in the period under review. Net debt stands at US$46mln.

Chief executive Mike Houston said: "I am pleased with both our production and cost performance for the quarter. 

“The benefits of the elution-electro winning plant are already apparent even at this early stage and with the commissioning of the new crushing and screening circuit the company will have a robust plant that can cope with future throughput increases enabling us to change our guidance for gold production to between 80,000 and 83,000 ounces for the full year.

“Good progress has been made on the development front with management focusing on progression of the New Luika Life of Mine extension and Singida projects in a manner that will deliver value for shareholders while not compromising our financial stability."

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