17th Oct 2019 10:39
(Alliance News) - Shanta Gold Ltd on Thursday reiterated its full-year guidance after recording a third-quarter gold production hike at its New Luika mine in Tanzania.
In the period to September 30, gold production rose 14% quarter-on-quarter to 22,726 ounces from 19,856 ounces. This helped Shanta edge to a year-to-date gold production total of 64,956 ounces, tracking to its 80,000 ounces to 84,000 ounces 2019 guidance.
On an annual basis, gold production rose 15% from 19,723 ounces.
Average head grade was up 15% quarter-on-quarter to 4.5 grammes per tonne from 3.9 grammes per tonne.
Shanta also reported a year-on-year rise in adjusted earnings before interest, taxation, depreciation and amortisation to USD16.5 million, up 57% from USD10.5 million. The figure does not include "non-cash loss on unsettled forward contracts", the Guernsey, Channel Islands-based gold miner explained.
This helped the firm to a 23% quarter-on-quarter reduction of net debt to USD20.7 million from USD26.9 million. Shanta's net debt is at the lowest it has been in more than six years, the company said.
Chief Executive Eric Zurrin said: "As we rapidly pay down our debt and improve our financial position, New Luika gold mine continues to perform operationally. This quarter has seen us produce over 22,000 ounces of gold and positions the company on track to again meet our guidance for the year."
At the Ilunga underground mine at New Luika, production commenced on schedule and on budget, Shanta said.
In addition, the firm explained it has found new targets within its existing mining licences at New Luika.
Zurrin added: "Our recent exploration results are encouraging as we look to add more ounces to the New Luika mine plan. Key to our current exploration targets is the close proximity to both the existing sources of high-grade ore and the processing plant. We plan to announce a new resource update shortly which will highlight how we can add low cost gold ounces to our future production and extend the mine life of New Luika."
Shares in Shanta were 5.1% higher at 8.41 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
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