Production costs tumbled at Tanzania-based gold miner Shanta Gold PLC (LON:SHG) in the last three months with further savings expected over the remainder of the year.
Shanta will shift operations at New Luika completely underground from the end of August as sufficient ore has been stockpiled to enable the open pit fleet to ‘stand down’, said chief executive Eric Zurrin.
Shanta produced 20,544 ounces in the three months to June, up from 17,663oz in the previous quarter, while operating costs dropped to US$505 per oz from US$595.
On a sustaining basis, costs were US$748 per oz, but are expected to drop to within a range of US$680-730 by the year-end.
Sales over the quarter amounted 19,475oz at a price of US$1,302.
Zurrin added the company has decided to move forward the start of underground production at the Ilunga deposit by more than a year to mid-2019, with final permitting by the end of this year.
Net debt rose to US$38.1mln (US$37.5mln), while VAT owed to the company is now US$17.9mln.
"The cost saving initiatives that were executed in Q4 2017 are now beginning to have a significant impact on both costs and cash flow. The full effect of additional savings executed in Q2 2018 will be seen over the coming months, said Zurrin
"We are continuing the development programme at Singida following the announcement of a new JORC resource estimate, which included a 56% increase in Measured resource."