Shanta gold output up, costs down

DAILY NEWS Reporter

SHANTA Gold production has gone up while managing to reduce operating costs in quarter two (Q2) at its New Luika mine in Songwe. The gold production jumped to 20,544 ounces in the three months to June, up from 17,663oz in the previous quarter, the gold firm said in a release yesterday.

The East Africa-focused gold producer said also operating costs dropped to 505 US dollars per oz

from 595 US dollars. Shanta Chief Executive Officer, Eric Zurrin, said the cost saving initiatives that were executed in Q4 last year were now beginning to have a significant impact on both costs and cash flow.

“The full effect of additional savings executed in Q2 2018 will be seen over the coming months,” said Zurrin. On a sustaining basis, costs were 748 US dollars per oz, but are expected to drop to within a range of 680-730 US dollars by the year-end.

Sales over the quarter amounted 19,475oz at a price of 1,302 US dollars. The miner net debt rose to 38.1million US dollars from 37.5million US dollar last year, while VAT owed to the company has reached 17.9million US dollars.

Shanta said earlier that it has shaved an annualised 7.2million US dollars from costs by renegotiating contracts with suppliers and by removing non-essential general and administrative spending. The released said the full benefit of this year cost reductions will be realised from Q3.

However, the underground operation at New Luika has been ring fenced during this exercise to ensure that production continues as planned. Shanta will shift operations at New Luika completely underground from the end of next month as sufficient ore has been stockpiled to enable the open pit fleet to ‘stand down’, Mr Zurrin said.

On other development the gold miner said has decided to move forward the start of underground production at the Ilunga deposit mid-next year. “We are continuing the development programme at Singida following the announcement of a new Joint Ore Reserves Committee Code (JORC Code) estimate, which included a 56 per cent increase in measured resource,” Mr Zurrin said.

Shanta operates New Luika which is located in the Lupa goldfield in Songwe and Singida is an advanced stage exploration and development project with a mining licence granted in 2012. The Lupa goldfield is the second largest goldfield in the country outside of the Lake Victoria goldfield.