18th Oct 2018 11:42
LONDON (Alliance News) - Shanta Gold Ltd on Thursday reported a small quarter-on-quarter decline in gold production, and annual production guidance has been lowered as well.
For the three months to September, Shanta produced 19,723 ounces of gold, down slightly from 20,544 ounces the quarter. On a year before, production rose from 18,225 ounces.
Despite the slip in gold production, sales increased to 19,737 ounces from the 19,475 ounces in the second quarter and 18,487 ounces a year prior.
Looking ahead, Shanta, which produces gold from Tanzania's New Luika mine, has cut its annual gold production guidance, and this will be at an increased expected cost per ounce.
It is guiding for 80,000 ounces of gold for 2018, which would compare with 79,585 ounces a year prior. Shanta's previous guidance was for 82,000 to 88,000 ounces of gold.
Shanta expects 2018 production at an all-in sustaining cost of USD750 per ounce, up from previous guidance of between USD680 per ounce and USD730 per ounce, due to lower-than-expected grades.
Shanta's silver production rose to 27,234 ounces from 20,170 ounces the previous quarter, and 22,915 ounces a year prior.
On the financial side, earnings before interest, tax, depreciation, and amortisation fell quarter-on-quarter to USD12.8 million from USD13.9 million, with net debt at September 30 at USD35.1 million from USD38.1 million three months before.
Chief Executive Eric Zurrin commented: "Shanta continues to deleverage its balance sheet despite not receiving the long-awaited VAT refund. This has been achieved through disciplined cost control and better capital allocation decisions.
"Exploration is a key focus for Shanta and it is therefore a positive development for us that our preliminary drilling has already replaced mined ounces during the Quarter," he continued.
"Trenching at the new Lambo target only 6.6 kilometres from our plant has yielded excellent grades and warrants further exploration. Further afield at the Quartzberg deposit, we have prioritised eight new high-grade targets and look forward to providing updates on these targets going forward."
Shares were 2.1% lower on Thursday at a price of 4.60 pence each.
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