Shanta Gold LTD (LON:SHG) has commenced underground decline work at Ilunga, part of the ongoing development at the producing New Luika project, three months ahead of schedule. First ore is expected in mid-2019.
Exploration drilling from underground is continuing, targeting, at a minimum, the replacement of reserves on an ongoing basis.
Meanwhile, a further net annualised saving of US$1mln is expected from January 2019, following an agreement to owner-operate Shanta's power plant at NLGM;
There will also be an increase in recoveries, following the commissioning of the third pre-leach tank, which will start on September 12.
Elsewhere, at Singida, a second phase of exploration will get underway this month, with detailed project economics to be announced in the fourth quarter.
And in an additional bonus the company could receive a VAT rebate of US$19mln.
"With operations performing well at New Luika, and following the cost-cutting initiatives implemented since September 2017, we expect the balance sheet to continue deleveraging," said chief executive Eric Zurrin.
"We will shortly have three active sources of high-grade ore following the commencement of underground development at Ilunga. With mining flexibility providing operational stability, Shanta is renewing its focus on exploration. Over the next two years, Shanta is targeting high priority exploration targets on its mining licences which include down dip extensions at Shanta's high-grade Bauhinia Creek and Ilunga deposits."