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Shanta Gold Singida Project update - steady progress with funding plan

Shanta Gold Singida Project update - steady progress with funding plan

Wed 5 Dec 2018 07:59 by 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.


Project highlights


·    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."

These articles are summaries / highlights and dont always include all financial news updates. Check at company website INVESTORS INFORMATION for full published results.

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