6th May 2016 08:31
LONDON (Alliance News) - Shanta Gold Ltd on Friday said it swung to a loss in 2015, due to reduced gold sales and a lower gold price, as the miner proposed a placing to raise USD10.0 million and said it has agreed a silver streaming agreement, providing it with financial headroom.
Shanta Gold said its revenue for the year ended December 31 was GBP95.7 million, compared with USD114.9 million, after gold sales fell to 80,622 ounces, down from 87,758 ounces, and the average price for gold fell to USD1,163 per ounce compared to USD1,289 per ounce a year earlier.
However, cost of sales grew to USD96.4 million from USD80.1 million, including an amortisation charge of USD21.0 million, which pushed the company into loss. Shanta Gold reported pretax loss of USD18.1 million in 2015 from a profit of USD16.6 million a year earlier.
Shanta Gold said it has reworked mine plans for the Bauhinia Creek and Luika Pits sites and, as such, sees a reduction of costs in the 2016. Shanta Gold added it expects production to be at the higher end of 2016 annual production guidance of 82,000 to 87,000 ounces, and, as such, it is currently updates its mine plan for the year ahead.
Elsewhere, Shanta Gold said it intends to conduct a conditional placing of shares to raise around USD10.0 million. Shanta Gold said it plans to place the shares at 6.5 pence per share.
Shares in Shanta Gold were down 12% at 6.60p on Friday morning.
Shanta Gold said the placing is being conducted through an accelerated bookbuilding process to be undertaken by Peel Hunt LLP, which is acting as the sole bookrunner. The books for the placing will open with immediate effect.
Shanta Gold added it has reached a conditional agreement with the holders of USD25.0 million senior unsecured subordinated convertible loan notes for its subsidiary to purchase USD10.0 million of the notes and to extend the term of the remaining noted by two years to April 2019. These loan notes come from a GBP40.0 million fundraising in April 2012.
The company also noted it has agreed a USD5.3 million silver streaming agreement with investment company Silverback Ltd. Silverback will also pay the Shanta Gold an ongoing payment of 10% of the value of silver sold at the prevailing silver price at the time of deliveries which will be made annually.
Shanta Gold said the restructuring of the loan notes, the silver streaming agreement and the placing will strengthen its financial position and will provide "financial headroom" for the continued exploration of satellite deposits.
"Shanta has also enjoyed a very pleasing start to the 2016 financial year which provides another building block to the foundation of delivering a sustainable, strongly cash generative business with real scope to extend the New Luika mine life," said Chief Executive Toby Bradbury.
By Hannah Boland; [email protected]; @Hannaheboland
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