16th Aug 2018 13:37
LONDON (Alliance News) - Shanta Gold Ltd on Thursday reported a swing to an interim profit from a loss the year before on reduced costs.
The Tanzania-focused gold miner reported a pretax profit of USD8.4 million from a USD649,000 loss the previous year, due to the company's "improved cost structure".
Shanta reduced its cost of sales by 23% to GBP34.1 million from GBP44.0 million, while revenue decreased by just 5.0% to USD50.2 million from USD52.7 million.
The company said USD7.2 million of recurring cost reductions have been achieved since September 2017, which have improved the cost base by about USD85 per ounce of gold.
Shanta did, however, report a higher all-in sustaining cost of USD757 per ounce, from USD715 per ounce a year before. This reflects the company's transition to underground mining and the introduction of higher royalties.
Gold production in the half was 38,207 ounces, down 4.7% from 40,073 ounces a year before. Gold sales averaged at USD1,303 per ounce, up 3.7% from USD1,257 per ounce the year before.
Shanta reiterated its belief that full-year total gold production will be within 82,000 ounces to 88,000 ounces with all-in sustaining costs of USD680 to USD730 per ounce.
Chief Executive Officer Eric Zurrin said: "Operationally, we are doing very well at New Luika - we achieved a record monthly underground production in June and importantly remain on track to achieve our annual production guidance for the year.
"In addition to a strong operational performance and with a vision to increase our mine life, we have achieved a number of exploration successes in the first half of this year. At New Luika, we completed phase 1 underground drilling at Bauhinia Creek, confirming the extension of high-grade mineralisation adjacent to our existing underground operation. At our second asset, Singida, we also announced two phases of exploration drilling results with encouraging intersections and I look forward to providing further updates on the project in the second half of the year."
Shares in Shanta Gold were down 1.0% Thursday at 4.60 pence each.
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