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Gold & silver

Shanta receives US$5.25mln advanced silver streaming payment

The streaming agreement relates only to silver by-product production from the New Luika mine

Shanta Gold Limited (LON:SHG) has increased its coffers, with the receipt of an advanced payment of US$5.25mln as part of a silver streaming agreement announced in May this year.

The East Africa-focused miner is restructuring finances as it expands underground at the New Luika mine in Tanzania.

READ - Shanta Gold's underground potential comes to the fore

WATCH - Shanta Gold 'on target for achieving production guidance' says CEO

The streaming agreement, which expires after 10 years, relates only to silver by-product production from New Luika with a minimum silver delivery obligation of 608,970 ounces over 6.75 years.

The firm will also receive an ongoing payment made annually of 10% of the value of silver sold at the prevailing silver price at the time of deliveries.

Shanta produced 121,682 ounces of silver in 2015 resulting in around 2% of annual revenue.

In April, the miner raised US$10.5m through a placing, a US$5.25m silver stream deal and paid off US$10mln worth of convertible loans. A open offer raised a further £176,000.

Last month, the group repeated its full year production guidance for between 82,000 and 87,000 ounces of gold, although costs are now expected to come in lower, at between US$690 and US$740 per ounce.

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