28th Feb 2019 11:33
LONDON (Alliance News) - Shanta Gold Ltd on Thursday said its profit rose significantly in 2018, helped by lower costs and improved production.
The company said its focus throughout the year remained on its flagship asset, the New Luika gold mine in southwest Tanzania.
The East Africa-focused gold producer reported a profit in 2018 of USD13.1 million, which was a multiple of USD3.6 million a year earlier.
Cost of sales amounted to USD75.3 million versus USD80.6 million in 2017, representing a gross margin of 26%, up from 19%. On a like-for-like basis, administration cash costs were down by USD1.5 million year-on-year. Net finance expense amounted to USD6.1 million compared to USD7.5 million the year prior.
Revenue rose to USD103.8 million from USD101.5 million, despite a reduction in gold price to USD1,259 per ounce from USD1,263 in 2017.
Shanta's gold output was ahead of guidance, at 81,872 ounces, with gold sales at 82,457 ounces, up from 80,365 ounces a year ago.
For 2019, the company is guiding production of between 80,000 and 84,000 ounces of gold.
"2018 was a transformational year for Shanta, both operationally and financially. It was the company's first full year of underground mining at our flagship New Luika gold mine," said Chief Executive Eric Zurrin.
"Looking ahead, a key focus for Shanta is mine life extension at New Luika. In this regard, we have doubled our exploration budget for 2019 and identified a number of key targets within our licence area," added Zurrin.
Shanta will spend USD3.6 million on exploration in 2019, up from USD1.5 million in 2018.
Shanta shares were trading 2.0% higher on Thursday at 5.15 pence each.
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