Shanta Gold makes progress with Singida IPO in Tanzania

East Africa-focussed gold producer, developer and explorer Shanta Gold updated the market on the Singida Gold Mining Project in Tanzania on Wednesday.

The AIM-traded firm said that, in connection with the planned initial public offering on the Dar es Salaam stock exchange, Singida Resources had entered into a non-binding term sheet with a privately-held East African multinational conglomerate, for an unsecured, non-recourse loan facility of $10m.

It said the facility was conditional on a minimum equity raise of $15m at the IPO, with Shanta targeting a minimum equity offering of $20m.

The facility would be repaid over a period of three years, from cash flows generated by the project, and carried an annual interest rate of 10%.

Shanta’s board said that, since announcing the proposed Singida IPO in March, formal feedback on the prospectus had been received from the Dar es Salaam stock exchange, as well as the Tanzanian Capital Markets and Securities Authority (CMSA), which had now been incorporated into the IPO documentation and resubmitted for approval.

“Following the IPO, Shanta Gold is expected to retain at least 51% ownership of Singida and will operate the project,” the board said in its short statement.

Finally, the company said the Singida Project's environmental impact assessment certificate had now been received from the Minister of State in the Vice President's Office for Union Affairs and Environment.

“This marks an important milestone for the future construction and operation of the project,” Shanta added.

“Further updates will be provided as the IPO process progresses.”