Shanta Gold (AIM:SHG) 8.8p, Mkt Cap £92m – Mining of BC Crown Pillar helps to raise processed grades with FY22 production reiterated


Shanta Gold (AIM: SHG), the East Africa-focused gold producer, developer and explorer announces its production and operational results for the quarter ended 30 June 2022 (the “Quarter”, “Q2” or the “Period”) for its East African assets, including New Luika Gold Mine (“NLGM” or “New Luika”) and Singida Project (“Singida”) in Tanzania and West Kenya Project (“West Kenya”) in Kenya.

Eric Zurrin, Chief Executive Officer, commented:

“This has been a strong second quarter from the Shanta teams on the ground in Tanzania and West Kenya and I would like to thank them for the effort they have contributed in what has been a successful period for the Company. At New Luika, the initial Crown Pillar mining has been delivered safely resulting in production being up 54% in Q2 vs Q1, which exceeded our internal expectations. We continue to make great progress at Singida, with construction on schedule for first production in Q1 2023. Singida will transform Shanta Gold into a +100,000 oz/pa producer with a diversified resource base.

We also continue to make material inroads at West Kenya with three drill rigs in operation across the project, following on from the announcement of the high-grade, upgraded Mineral Resource Estimate in Q1.

As part of our commitment to leading ESG standards, Shanta has undertaken several programmes amongst our communities during the last quarter to enhance their livelihoods. These initiatives include the construction of two primary schools, which I am delighted to say are close to being finished, and providing 308 students with learning materials and uniforms.

Shanta continues to go from strength to strength, with a strong balance sheet, underpinned by our new US$20 million senior debt financing. This has been an encouraging first six months of the year and we are pleased to reiterate our full year production guidance of 68-76 Koz.”


· Gold production of 17,527 oz (Q1: 11,408 oz), 54% higher than Q1 and exceeding target of +45% announced in early June.

· June gold production level of 7,538 oz is the highest monthly production level achieved in over 12 months;

· Singida construction is 63% complete at the end of June 2022 (51% at end of Q1) and on track for first gold production in March 2023;

· US$20 million senior debt financing announced in June with disbursement completed on July 15th. Singida construction is fully funded through to first production;

· At the West Kenya Project, three drill rigs continued infill and expansion drilling including results of 46.7 g/t across a width of 14 metres at less than 150 metres vertical depth (LCD0336, Bushiangala deposit);

· Shanta has been awarded a maiden mining licence covering the Porcupine South resource area of the Lupa Gold Fields, approximately 22 kilometers from the New Luika Gold Mine Processing Plant;

· Following over 9 million hours of LTI-free operations, one Lost Time Injury was recorded in Q2 in the cemented rockfill plant at NLGM. At the Singida operations, a total of 1,037,214 man-hours have now been worked without Lost Time Injury (LTI).

Financial Summary

· Cash, and available liquidity1 of US$14.5 million (“m”) at 30 June 2022 (Q1: US$13.4 m);

· 3,843 oz contained within doré available for sale at the end of Q2 (Q1: 3,446 oz);

· Gross debt of US$5.6 m (Q1: US$6.8 m);

· Operating costs of US$913 /oz (Q1: US$1,297 /oz) and AISC of US$1,303 /oz (Q1: US$1,760 /oz) in the Quarter, respectively. The decrease in the AISC is mainly attributed to significantly more ounces being recovered in the Period;

· EBITDA 2of US$11.9 m, excluding operating expenditure at West Kenya and Singida totalling US$3.6 m;

· Capital expenditure and investment totalled US$10.9 m including US$6.1 m for Singida construction, US$3.0 million for NLGM, and US$1.8 m for West Kenya;

· VAT receivable of US$27.7 m (Q1: US$25.1 m), of which approximately US$23 m relates to the historical period July 2017-June 2020. An application for an Out of Court Settlement is ongoing;

· US$20 m senior debt facility agreement with the Stanbic Bank of Tanzania of which funds were dispersed on 15 July 2022.

Operational Summary

New Luika Gold Mine

· 216,184 t milled (Q1: 214,204 t) from underground and open pit sources;

· Average head grade of 2.83 g/t (Q1:1.9 g/t) blended from underground, open pit, and existing ROM stockpile sources;

· Average recoveries of 88.7% (Q1: 87.2%);

· Run of Mine (“ROM”) stockpile of 182,326 t of ore grading 1.21 g/t (Q1: 155,233 t grading 1.0 g/t) containing approximately 7,089 oz;

· Underground ore mined of 174,200 t, up 6% from plan; and

· Bauhinia Creek Crown Pillar successfully accessed in April with high grade material being mined consistent with expectations.


· Singida remains on track for first production in Q1 2023 transforming Shanta Gold into a +100,000 oz/pa producer with a diversified resource base;

· Installation of the Metso built Crushing Circuit is progressing well and on schedule being 97.5% completed;

· Delivery of 80% of the Grinding & Gravity Circuit Mill by NCP in South Africa with installation beginning in Q3;

· Ore stockpile levels total 97,918 tonnes grading 2.11 g/t for 6,647 contained ounces at the end of the Quarter; and

· A total of 114,027 man-hours were worked at Singida in June 2022 resulting in total of 1,037,214 man-hours worked without Lost Time Injury (LTI). There were no Medical Treated Injuries (MTI) in the Quarter which resulted to 0.00 TRIFR for the period and 0.00 TRIFR year to date.

West Kenya

· Drilling continues across three rigs following a successful drilling campaign at Isulu and Bushiangala where 378,000 oz grading 11.7 g/t were converted to Indicated Resources in late March 2022;

· Phase 2 of the ongoing diamond drilling campaign continues with the Project seeking to infill 20 modelled zones at Isulu and 23 modelled zones at Bushiangala. This drilling phase amounts to 65-75,000 m of planned drilling and is due to be completed in Q4 2022;

· The West Kenya Project Feasibility Study workstream is currently underway with the commencement of a Study Manager in Q2.

Corporate Social Responsibility (“CSR”)

· Shanta is pleased to announce that in the Period, 308 students received learning materials and uniforms as part of its Student Sponsorship program in the surrounding NLGM communities;

· In May 2022 Shanta and a local internet services provider agreed to partner in supporting the Saza Secondary School with internet facilities, PCs and tablets;

· Construction of various classrooms at the Patemela Primary School are 90% completed. Construction of three classrooms at Saza Falls Primary School are 80% completed;

· Shanta’s 2,100 farmers who are enrolled in Shanta’s Mining Agriculture Improvement Program (“SMAP”) are reaping the benefits of high sesame and sunflower seed prices being achieved for their harvested crops from the previous season.

Note: 1. Available liquidity has been derived as unrestricted cash, restricted cash, and the sale value of doré available for sale at the end of the Period (net of royalties and expected selling costs).

Note 2: EBITDA is earnings before interest, tax, depreciation, and amortisation which has been derived as operating profit exclusive of depreciation/depletion of tangible assets, amortisation of intangible assets


Shanta Gold Limited

Eric Zurrin (CEO)

+44 (0) 14 8173 2153

Luke Leslie (CFO)

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