Newly published project economics suggest production will average 26,000 oz per annum for an initial six-year period.
It will cost Shanta US$16mln to get the project up and running, followed by a further US$3mln in working capital. Financing is expecting to be completed at the Singida asset level, with various options being considered.
But there is good money to be made according to the figures, with the project boasting a net present value of US$31mln and an internal rate of return of 67%.
A life project cash cost of US$794/oz is well below the price of gold, which currently sit just above US$1,200/oz.
Shanta reckons there is “significant further upside” as well, with substantial resources – around 344,000oz – currently sitting outside the project economics and work is ongoing to boost that figure.
Importantly, most of the key infrastructure requirements are in place, including Tanesco grid power, resettlement and an operating camp.
An environmental and social impact assessment is expected in the first quarter of 2019, which would complete the permitting process at Singida.
October and November were good for Shanta
“Singida has always been an exciting project for the company and has the potential to propel Shanta to a gold producer with over 100,000 oz per year by 2020. The development of Singida unlocks value for us, with very attractive economics including an IRR of 67%,” said chief executive Eric Zurrin.
"We are making steady progress with the Singida funding plan, which as we have stated previously, will be completed at the asset level and not through Shanta Gold shareholders. I look forward to providing a more detailed update in Q1 2019, with a target to complete the funding during the course of 2019.”
As for current operations, Shanta said October and November were the strongest two months in terms of production, including 584 ounces in one day at New Luika.
That leaves it on track to hit full-year guidance of 80,000oz at an all-in sustained cost of US$750/oz.