Shanta Gold Limited (AIM:SHG) Final Results

Full Year Results for the year ended 31 December 2021 and Posting of Annual Report and Notice of AGM

Shanta Gold (AIM: SHG), the East Africa-focused gold producer, developer and explorer announces its production and operational results for the year ended 31 December 2021 (“FY2021” or the “Year”) 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. The Group has also today published its Annual Report for the year ended 31 December 2021 and posted its Notice of Annual General Meeting to shareholders, both of which are available on the Company’s website at www.shantagold.com.

Eric Zurrin, CEO, commented:

“Despite the initial challenges we faced as a company during 2021, I am pleased to report that Shanta ended the year in a strong position, with reporting in line with revised guidance and operations across all three assets positively poised for the coming year. Our exceptional safety record and stable financial performance have once again provided a platform from which the Company is now able to grow substantially, with Shanta on a clear path to becoming a +100,000oz producer by early 2023.

Following several very positive drilling results during the year, we have updated the mine life at New Luika to 2026, and the encouraging start we have made in the new financial year with the start of high-grade mining at the Bauhinia Creek Crown Pillar means our 2022 guidance is now significantly de-risked.

Elsewhere, Singida remains on course to come into production during early 2023 on budget and on schedule, bolstering our output and diversifying our portfolio in East Africa beyond New Luika. At the same time, the highly exciting high-grade West Kenya Project has seen some phenomenal high-grade drilling results during the year, and we were delighted to announce a 31% increase in the Mineral Resource Estimate at West Kenya to 1.55 Moz just after the year end.

This year has also seen the Company release its inaugural Sustainability Report. Our dedication as a company to operating and collaborating in a responsible manner is central to our culture and corporate purpose, and we will be looking to proactively build on this disclosure in 2022 and beyond.

I would like to thank all of the Shanta employees for their hard work throughout this year. We believe that the future is very bright for the Company, and that has been demonstrated in some of our recent announcements, most notably the Q1 production update. We look forward to updating shareholders on further progress in due course.”

2021 Highlights

Financial

· Revenue of US$103.6 million (“m”) (2020: US$147.4 m);

· Gross profit of US$26.0 m (2020: US$56.7 m);

· EBITDA1 of US$19.0 m (2020: EBITDA1 of US$63.9 m);

· All gold sales unhedged and completed at spot price, with average selling price of US$1,801 /oz during 2021 (2020: US$1,495 /oz);

· Total VAT refunds of US$7.2 million;

· Gross debt reduced to US$2.4 m, following repayment of the US$10 million convertible loan note in April 2021;

· Adjusted Operating Cash costs of US$1,081 /oz and an AISC of US$1,439 /oz; in line with revised guidance; and

· Maiden dividend paid in April 2021 and interim dividend paid in October 2021, totalling approximately US$2.8 million during 2021.

Operational

· Exceptional safety record with TRIFR of 0.67 and zero LTIs in 2021 (2020: 0.97 and zero LTIs);

· Record annual throughput of 834,607 tonnes (“t”) milled, which was approximately 7% greater than budget, following installation of Mill #3 in H1 2021;

· Average recoveries of 89.7 per cent achieved (2020: 89.7 per cent);

· Total gold production of 55,280 ounces (“oz”), in line with revised guidance;

· West Kenya continued to deliver encouraging assay results announced during the with an initial conversion of >100% of Inferred Resources to Indicated Resources of 117,600 oz grading 7.04 g/t;

· Singida’s construction remains on track for first production in Q1 2023, adding a second revenue stream across the portfolio and further strengthening our diversified portfolio of assets in East Africa;

· Extension of current reserve life at NLGM to the end of 2026 following successful exploration drilling programmes carried out throughout the year with new discoveries at the Porcupine South deposit adding further life to NLGM once incorporated into the mine plan in 2022; and

· Tanzanian and Kenyan nationals represent over 99% of the Company-wide workforce.

Sustainability

· Completed strategic review of sustainability strategy with our inaugural sustainability report published in H1 2022;

· Completion of the Mbangala Luika Dam water project providing the more than 7,600 residents of Mbangala village with year-round access to clean water;

· 3 classrooms and a toilet block constructed at the Kalanda Primary School located in the nearby Mbangala village; and,

· 2,000 farmers, up from approximately 150 farmers in 2018, have enrolled in Shanta’s Mining Agriculture Improvement Program (“SMAP”) which provides advice, training, and farming materials to farmers in the local surrounding Mbangala and Maleza villages.

2022 Guidance

· Annual production guidance of 68,000 – 76,000 oz at AISC2 of US$1,050 – 1,250 /oz in line with the World Gold Council (“WGC”) definition;

· 2022 gold production is weighted approximately 65% towards H2 2022 reflecting mining of the high-grade Bauhinia Creek crown pillar which began in April 2022. The crown pillar consists of approximately 83,000 tonnes grading 8.4 g/t containing around 22,500 ounces.

Note:

1. 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 and one-off exceptional items.

2. AISC figures published include development costs, in line with the WGC definition

Board changes

Robin Fryer, who has been a Non-Executive Director and Chairman of the Board’s Audit Committee for seven years, retired from the Board in 2021. Ms Michelle Jenkins was appointed as his replacement in the year. Ms Jenkins is a Chartered Accountant (South Africa) and an exploration geologist with an Honours degree in Geology from the University of Witwatersrand, South Africa. Ms Jenkins has 25 years’ extensive experience across Africa including currently as the Executive for Finance and Administration (South Africa) for Orion Minerals Ltd and as a Non-Executive Director of Kumba Iron Ore Limited.

Annual General Meeting (“AGM”)

The AGM of the shareholders of the Company will be held at 11 New Street, St Peter Port, Guernsey, GY1 3EG on 15 June 2022 at 12:00 pm.

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Enquiries:

Shanta Gold Limited

Eric Zurrin (CEO)

+44 (0) 14 8173 2153

Luke Leslie (CFO)


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