Shanta Gold Limited (AIM:SHG, OTC:SAAGF) said the second half of the year has started “very strongly” as the East Africa-focused gold producer reported its interim results.
“The performance of the company has continued to go from strength to strength throughout the first half of the year, and we expect that to continue into H2 2022,” said Shanta chief executive Eric Zurrin.
“We have begun the second half of the year very strongly, with July production of 7,259 oz, and August production of 6,707 oz, and we remain confident of hitting guidance," he added.
The company previously announced gold production of 28,947 ounces in the first half, with the second quarter accounting for about 61% of the total.
READ: Shanta Gold exceeds its second-quarter production target
Shanta said forecasted production for September-December remains strong and it reiterated its full-year output guidance of 68,000-76,000 ounces.
However, it lifted its all-in sustaining cost (AISC) guidance to US$1,150-1,275 per ounce for 2022, from the previously guided US$1,050-1,250 an ounce, due to the higher costs of fuel, emulsion, steel supports, and consumables.
“Whilst we have to be wary of inflation and its impact on certain unavoidable costs, we remain focused on our operational and capital discipline,” said Zurrin.
Shanta Gold declared an interim dividend of 0.10 pence per share.
First-half revenue fell to US$51.9mln, from US$57.8mln in the year-earlier period, as lower gold sales outweighed higher gold prices, although revenue improved in the second quarter versus the first.
Underlying earnings (EBITDA) for the first half, excluding expenditure on its West Kenya and Singida project, fell to US$14.1mln from US$17.4mln.
“The Singida project continues to progress at a good pace with roughly 70% of the construction activity now finished,” said Zurrin. “We anticipate first gold being poured in Q1 2023, transforming Shanta into a +100,000 oz gold producer with a diversified asset base.”
He noted that the high-grade West Kenya project continues to drive excitement with the mineral resource estimate growing 31% during the period to 1.55 million ounces.
“We believe the second half of the year is set to be a bright one for the company,” Zurrin concluded.