23rd Mar 2016 08:58
LONDON (Alliance News) - Shanta Gold Ltd on Wednesday said it has secured USD9.1 million in financing to construct a power station at its gold mine in Tanzania.
Shanta has secured the finance from Bank M Tanzania PLC so it can build the 7.5 megawatt station at the New Luika gold mine in the Lupa goldfield within the south-west of the country.
Shanta said the power needed from the plant is expected to reach around 6.0 megawatts during the development and operation of the underground mine, and said the station should be delivered in the first quarter of 2017.
Shanta said transitioning from a power leasing arrangement to an owned power station will "significantly reduce" the cost of energy. The power station will be supplied, operated and maintained by the supplier, Inglett & Stubbs International.
The financing has been provided through a 12-month letter of credit at a fixed interest cost of 8%, followed by a five-year amortising term loan bearing interest at 12-month US dollar Libor plus 9% per year.
"The plant's arrival in the first quarter of 2017 is timed to the commencement of underground production in the second quarter of 2017 and provides a longer term power facility to cater for an extended mine life as additional resources are brought in to the mine plan," said Chief Executive Toby Bradbury.
Shanta shares were down 1.4% to 6.90 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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