Shanta Gold Ltd (LON:SHG) shares jumped higher on Monday as the firm revealed it produced 22,216 ounces of gold from its New Luika mine in Tanzania during the second quarter of 2020, up on the 20,167 ounces produced in the first quarter.
The company said it has also been working up the resource at Singida, which now stands at 243,000 ounces.
WATCH: Shanta Gold enters new chapter with net cash as production continues to increase
Shanta added that annualised Q2 2020 underlying earnings (EBITDA) at spot gold was “just under $100mln per annum from the New Luika mine with margins expanded from lower costs and a rising gold price”.
The company also noted that it had net cash of US$2.1mln at the second quarter-end, the first such occasion in its producing history having had net debt of US$15.1mln at the end of the first quarter in 2020, which furthermore excluded US$3.6m of doré available for sale.
Unrestricted cash at period’s end was US$12.9mln (Q1 2020: US$5.3mln), with US$2.5mln available to draw from its working capital facility.
In the Q2 production and operational update, Eric Zurrin, the group's chief executive officer, commented: "Shanta enters a new chapter with a net cash position, completing a period of enormous deleveraging. Annualised Q2 EBITDA at spot gold is just under $100m per annum from the New Luika mine with margins expanded from lower costs and a rising gold price. Future production at Singida is expected to significantly increase the company's cashflow.
"Shanta expects to shortly conclude the acquisition of Barrick's Kenya assets whereupon Shanta will own three projects with 3 million oz of high quality gold resources. Shanta's near-term focus is on replacing reserves at New Luika, financing and commencing Singida's construction, and expanding the resource base at the West Kenya Project. We remain committed to rigorous capital allocation, growth of underlying shareholder value and to managing a sustainable and responsible mining company."
In morning trade on Monday, Shanta Gold shares were 8.6% higher at 15.88p.
-- Updates with further statement details, share price --