1st Sep 2014 09:14
LONDON (Alliance News) - Shanta Gold Ltd Monday reiterated its full-year production guidance for 2014, as it swung into a pretax profit in the half-year to the end of June.
The company is guiding production of 80,000 to 83,000 ounces gold for the full-year, with an all in sustaining cost guidance of USD900 to USD1,000.
The east Africa-focused gold production and exploration company posted a pretax profit of USD7.7 million, swung from a loss of USD1.4 million in the previous year, as revenue rose to USD58.3 million from USD14.7 million.
The company produced 42,194 ounces of gold during the period, up 10% from 38,475 tonnes in the previous year, as higher mill throughput enabled the processing of lower grade ore. It sold 44,459 ounces at an average price of USD1,302 per ounce, compared to 38,035 ounces at USD1,343 in the previous year.
It completed its conversion from diesel to lower cost heavy duel oil during the half-year, and Shanta Gold, which it expects to lead to cost savings of USD20 per ounce.
It commissioned its elution/electro-winning plant in May, which has been a material boon on its recoveries of both gold and silver, it said.
Its new crushing and screening plant is running slightly behind due to delays from the supplier, but is expected to be fully operational by the end of September 2014, leading to higher mill throughput and cost savings.
The price of gold is expected to remain volatile for the remainder of the year, Shanta Gold said, however, it has a hedging strategy covering 50% of its forecast production at USD1,319 per ounce.
It is progressing a new life of mine extension and expansion project at its Luika mine, and said it expects initial results in the fourth quarter. It is continuing its resource evaluation and relocation exercise at its Singida site, which it expects to complete by the second quarter of 2015.
"Results for the half year are pleasing not only from the perspective of a positive production and cost performance but also the fact that the company is generating a healthy operating cash flow," said Chief Executive Mike Houston in a statement.
Shares in Shanta Gold were trading up 1.89% at 12.10 pence per share Monday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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