22nd Apr 2014 07:12
LONDON (Alliance News) - Shanta Gold Ltd Tuesday said it narrowed its losses in 2013, after it got its New Luika mine into production and was able to reverse a bad-debt provision.
The gold producer posted a pretax loss of USD4.4 million for 2013, compared with USD14.7 million a year earlier, as its operating losses fell to USD3.2 million from losses of USD10.6 million in the previous year. A fair value gain of USD6.0 million was recorded, compared with USD263,000 in 2012. Shanta also reversed a bad debt provision amounting to USD1.7 million.
The firm posted revenue of USD66.0 million during the period, selling 48,453 ounces of gold at an average price of USD1,361 per ounce, after failing to record revenue in 2012. Shanta said it was boosted by commercial production at its New Luika plant, which commenced in April 2013.
"Therefore, whilst gold sales for the year totalled 61,877 ounces, 13,424 ounces were in respect of the pre-production period and thus of the total revenue for the year amounting to USD88 million, USD22 million relating to that period was capitalised," it added.
Shanta said gross profit totalled USD12.2 million, giving a gross margin of 19% after low-grade ore stocks valued at USD3 million were written off. The firm did not record any gross profit in the previous period.
The East Africa-focused gold producer said 2013 was a good period operationally with gold production of 64,054 ounces at the New Luika Gold Mine slightly ahead of guidance and successful plant optimisation delivering targeted throughput of 1,275 tones per day by year end
Financially, net debt at the year-end amounted to USD50 million, while cash and cash equivalent stood at USD14.6 million.
Looking ahead the firm said it expects the upgrade of its plant to be completed in the second quarter 2014 while evaluation work at New Luika will be completed soon with the aim of extending the life of the mine beyond five years.
Shanta Gold shares were trading down 0.9% at 14.50 pence at the open Tuesday.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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