Shanta Gold updates resource estimate at West Kenya project

East Africa-focussed Shanta Gold announced an updated mineral resource estimate for the Ramula deposit at the West Kenya Project on Wednesday.

The AIM-traded firm’s update followed the successful completion of its 2022 drilling programme at West Kenya, and added to the updated mineral resource estimate for the Bushiangala and Isulu deposits, announced on 26 January.

It said the total West Kenya resource now stood at 1.76 million ounces, an increase from 1.18 million ounces since Shanta started drilling at the beginning of 2021.

The indicated resources had also increased to 1.14 million ounces, from nil, over the same period.

Shanta said the Ramula deposit in particular saw total resources increase to 469,800 ounces grading 2.41 grams of gold per tonne, with 89% of resources upgraded to the indicated category.

Additionally, the average resource grade increased by 16% following infill drilling, with preliminary indications of attractive open pit mining potential.

Ramula currently had an indicated, pit-constrained resource estimate of 416,700 ounces grading 2.43 grams of gold per tonne, using a cut-off grade of 0.7 grams per tonne.

Management said it was reviewing permitting, plant location, mining sequencing, and an accelerated timeline to full economic assessment.

Further work was being planned, including expansion drilling across the four high-priority targets in the Ramula region, metallurgical testing, a scoping study, and infill drilling for conversion to mineable resources.

The firm said its 2023-2024 planned drilling on the targets adjacent to Ramula was aiming to deliver substantial resource additions and new discoveries.

“We are delighted that the excellent drilling results from the fourth quarter of 2022 at Ramula have resulted in a significant increase in indicated resources across the whole of West Kenya, further decreasing the risk of this project and confirming its quality nature,” said chief executive officer Eric Zurrin.

“The initial indications that Ramula has open pit mining potential is particularly attractive from a cost and timing perspective when considering how to ultimately develop the asset.”

Zurrin said that as the company diversified its production portfolio in Tanzania with Singida's first gold pour in March, its continued exploration success in West Kenya remained “very exciting” for Shanta.

“We believe Shanta delivers a unique investment case when compared with our peers, with our clear growth story and ever-increasing production profile allowing us to be confident about the near to mid-term prospects of the company.”

At 1201 GMT, shares in Shanta Gold were up 1.55% at 10.79p.

Reporting by Josh White for Sharecast.com.