Shanta Gold revenue rises as production continues to improve

East Africa-focussed gold producer Shanta Gold announced its unaudited results for the six months ended 30 June on Monday, with first half revenue rising to $53.6m from $49.3m year-on-year.

The AIM-traded firm said cash costs for the period were $530 per ounce, down from $549 per ounce, with all-in sustaining costs slipping to$730 per ounce from $757 per ounce, which was below its annual guidance of between $740 and $780 per ounce.

Cash flow from operating activities before movement in working capital totalled $23m, which was up 5% year-on-year, while first half adjusted EBITDA slipped slightly to $22.6m from $22.7m a year earlier.

Gross debt narrowed to $30.1m from $40.5m at the end of the 2018 financial year, following $8.8m of principal repayments on borrowings and a $4.9m partial buyback of convertible loan notes during the half.

Net debt, excluding bullion available for sale, totalled $26.9m at period end, down from $31.5m at the end of 2018.

VAT receivable due to the company was $25.3 m, and cash and available liquidity was $9.3m.

Capital expenditure totalled $8m for the period, net of $2.9m Ilunga pre-production revenue, and up from $7.8m at the same time last year.

On the operational front, first half gold production totalled 42,230 ounces, which was up 11% year-on-year, with a new all-time quarterly record set for tonnes milled during the period.

Annual production guidance of between 80,000 and 84,000 ounces was reiterated for 2019, and the board confirmed no lost time injuries during the period, with none since the fourth quarter of 2017.

“In the first half of 2019 we have continued to see steady operational performance at the New Luika Gold Mine and remain on track to deliver both full-year production and costs within guidance,” said chief executive officer Eric Zurrin.

“This has been achieved with an exceptional safety record which by the end of H1 2019 had reached 2.9 million man-hours without a lost time injury.

“Singida continues to progress towards the planned initial public offering, and we look forward to offering Tanzanians a rare investment opportunity within their own mining sector as we build Shanta's second mine in Tanzania.”