Shanta Gold Limited (LON:SHG) restated its production guidance for the year as it update on its performance in the first quarter.
The company, which owns the New Luika mine in south-west Tanzania, produced 24,341 ounces of the yellow metal in three months ended March, compared with 29,000 ounces in Q4.
It sold 21,486 ounces at an average price US$1,132 an ounce, which was just US$51 below the spot price.
Shanta is guiding the market that it will produce 82-87,000 ounces of gold this year at an all in sustaining cost of U$750-$800 an ounce – making it one of the world’s lower cost producers.
The company generated US$12.3mln from its operations and is sitting on cash balance of US$16.3mln. It has net debt of US$58.4mln.
Shanta said the underground project “remains on schedule and within budget”.
Preparation work is completed and equipment deliveries commenced later this month.
Underground production should begin in the second quarter of next year, Shanta confirmed.