19th Jul 2016 09:52
LONDON (Alliance News) - Shanta Gold Ltd on Tuesday reported higher gold production at its New Luika gold mine in Tanzania in the second quarter of 2016.
The gold producer said gold production in the quarter ended June 30 rose to 23,896 ounces, from 24,341 ounces in the first quarter.
Gold sales grew to 26,134 ounces at an average price of USD1,246 per ounce, from 21,486 ounces at an average price of USD1,132 per ounce in the first quarter.
Cash costs also decreased to USD429 per ounce from USD445 per ounce, but all-in sustaining cost rose to USD664 per ounce from USD600 per ounce.
Shanta Gold has made forward sales from July to December of 39,000 ounces at an average price of USD1,222 per ounce, it said.
Shanta Gold added that the underground project development started in June and remains on track and within budget to produce first production of underground ore in the second quarter of 2017. The Luika river dam to provide low-cost water security has been completed, and works have begun on the second tailings storage facility.
Meanwhile, exploration drilling in the second phase programme delivered "excellent" intersections at the Ilunga prospect at depth and along strike, while further progress in the development of the Singida project has been made with a planned pilot mining operation.
Shanta Gold maintained its annual production guidance at between 82,000 and 87,000 ounces, and lowered its guidance for all-in sustaining cost to between USD730 and USD780 per ounce, from between USD750 and USD800 per ounce.
"Quarter-two has been another excellent period for Shanta, benefiting from the accelerated and reduced cost operations in the first half-year alongside the higher gold price. With the transition to underground mining at the New Luika Gold Mine, the second half will sustain mill throughput of slightly lower grade ore as planned ensuring full year production guidance is maintained. Importantly, this will be achieved at the favourable end in the case of both ounces and cost," Chief Executive Toby Bradbury said in a statement.
"Our objective continues to focus on dependable low cost and sustainable production and delivery of gold at an [all-in sustaining cost] of below USD780 per ounce which results in exceptional cash generation," he added.
Shares in Shanta Gold were trading up 2.8% at 8.35 pence on Tuesday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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