Shanta Gold has been delivering exceptionally well on the exploration front, says Liberum, but the market has been more focused on the disappointing operational performance from the New Luika mine.
The broker, though, says the company is now through the weak grades and production will lift materially from 52,000oz over the past 12 months to more than 100,000oz by first quarter 2023.
“As grades improve, free cashflow covers all growth spend and the market can become comfortable on the outlook to 2023 when the feasibility study on West Kenya is due to be published and Singida will be fully ramped up. “
Buy with a 26p target price, says the broker.