Wed 5 Dec 2018 07:59 by ukcitymedia.co.uk about : trading updates - 0 Comments - 1633 words
Shanta Gold (AIM: SHG), the East Africa-focused gold producer, developer and explorer, is pleased to announce project economics for the Singida Gold Mining Project ("the Project") in central Tanzania.
· Average annual production from open pit mining of 26,000 oz for an initial six year period;
· Expected to increase Shanta Gold's total gold production to over 100,000 oz pa from first full year of production;
· Pre-production capex requirement of US$16 million ("m") and US$3 m for working capital;
· Net Present Value ("NPV") of US$31 m and IRR of 67%, at an 8% discount rate and using the current gold forward curve;
· Life of Project Cash Cost of US$794 /oz;
· Project economics are based on internally prepared management estimates using the Singida Internal Owners Team and have not been independently verified;
· Significant further upside potential through the inclusion of substantial resources currently sitting outside the project economics;
· Geophysics to test continuity between Corn Patch and Corn Patch West targets recently completed, results currently being interpreted;
· Most key infrastructure requirements in place including water, Tanesco grid power, resettlement and an operating camp;
· Singida ESIA expected by Q1 2019, completing the Project's permitting process; and,
· Financing expected to be completed at the Singida asset level with various options being considered.
Exploration and Future Potential at Singida
· Total inferred resources outside of the project economics amount to 6.57 Mt at 1.63 g/t for 344,000 oz;
· Inferred ounces have been prioritised for evaluation, with conversion potential through further drilling;
· All gold resources at Singida sit within Shanta's existing mining licenses; and,
· Ongoing resource exploration and optimisation work will target extension of the longevity of the project beyond six years and improvement of the Project's NPV.
Shanta Gold updates
· Production in October and November have been the strongest two months of 2018;
· November production included a daily record at New Luika Gold Mine of 2,631 tonnes ore mined at a grade of 6.9 g/t for 584 oz contained gold, from the underground;
· Shanta remains on track to achieve full year guidance for 2018 of approximately 80,000 oz at an AISC US$750 /oz; and
· Exploration drilling at Quartzberg, 45km east of NLGM, is underway.
Eric Zurrin, Chief Executive Officer, commented:
"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%."
"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."
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