Shanta Gold (LON:SHG) expects a much better second half after development work its two main open pits at New Luika in Tanzania knocked its interim results.
Revenues over the six months to June fell to US$31.9mln (US$58.3mln) through a combination of lower production, lower sales and a lower gold price.
Toby Bradbury, who was appointed chief executive in April, said the dip in production to 28,180 ounces from 42,194 reflected the major redevelopment of New Luika through January to May.
Production was restored to budget levels in June, he said, and the operational improvements put in place will enable “material reductions to future mining costs”.
He added Shanta remained on track for full year production of between 72-77,000 ounces at all –in-costs of between US$850-900.
There was an interim loss of US$10.3mln (profit US$7.7mln), while cash balances at the half year were US$5.9mln and debt US$54.5mln.
Bradbury added that even though the gold price would likely remain volatile for the rest of the year, Shanta had already sold forward at least 60% of the forecast production this year at an average price of US$1,222/oz.
“A significant improvement in cash generation and profitability is therefore forecast for H2 2015.”