Shanta Gold has bumper third quarter as it looks to expand New Luika

East Africa-focussed gold explorer, developer and producer Shanta Gold announced its production and operational results for the third quarter ended 30 September at the New Luika Gold Mine in south west Tanzania on Thursday, reporting an increase in gold production to 22,726 ounces, from 19,856 ounces in the second quarter.

The AIM-traded firm said its year-to-date production now totalled 64,956 ounces, and said it was on track to meet its reiterated annual guidance of between 80,000 and 84,000 ounces, at all-in sustaining costs of between $740 and $780 per ounce.

During the period, 126,787 ounces of inferred resources grading at 3.15 grams of gold per tonne was converted into 83,543 oz of indicated resources, grading 7.85 grams per tonne.

The company said its net debt had narrowed by 23% from the second quarter to $20.7m, while its gross debt was 15% smaller at $25.7m.

Forward sales fell to 43,000 ounces from 45,000 ounces in the prior quarter, with the firm’s adjusted EBITDA totalling $16.5m for the period, a decent improvement on the $10.5m it reported for the second quarter.

Its all-in sustaining costs were $723 per ounce for the period, down from $773 per ounce, while cash operating costs fell to $474 from $564 per ounce.

Shanta Gold said it had cash and available liquidity of $11.6m at period end, rising from $9.3m at the start of the quarter, and reported nil lost time injuries, with none reported since the fourth quarter of 2017.

“As we rapidly pay down our debt and improve our financial position, New Luika Gold Mine continues to perform operationally,” saic chief executive officer Eric Zurrin.

“This quarter has seen us produce over 22,000 ounces of gold and positions the company on track to again meet our guidance for the year.

“Net debt at $20.7m is now the lowest it has been in over six years and has decreased by over 50% since the same period two years ago.”

Zurrin said the firm’s recent exploration results were “encouraging” as it looked to add more ounces to the New Luika mine plan.

“Key to our current exploration targets is the close proximity to both the existing sources of high-grade ore and the processing plant.

“We plan to announce a new resource update shortly which will highlight how we can add low cost gold ounces to our future production and extend the mine life of New Luika.”