SHANTA Gold anticipated moving into a net cash position in the current financial year following a strong showing in the 12 months ended December 31 in which the company met production and cost targets.
Production last year totalled 84,506 ounces which just about exceeded guidance of between 80,000 to 84,000 oz. Guidance for this year is the similar with an upper end of 85,000 oz targeted but all-in sustaining costs (AISC) of $830 to $880/oz were likely compared to AISC of $779/oz in the 2019 financial year.
The leap in AISC was down to the reintroduction of supplementary open pit mining from Shamba, the non-cash impact of utilising ore stockpiles and royalties to be incurred on an anticipated higher average selling price per ounce than in 2019. Shanta would also embark on a $5m exploration spend, a 65% year-on-year increase.
Net debt was cut by about $6m in the quarter, largely owing to a VAT refund, to $14.3m which excludes $21.8m in VAT refunds still outstanding. “The company has achieved a number of important objectives in 2019, with gold production exceeding guidance and net debt expected to soon move to net cash,” said Eric Zurrin, CEO of Shanta.
“The company is well-positioned for another strong year and we anticipate entering a net cash position during 2020 as our deleveraging strategy enters its final phase.” Shanta had also replaced its reserves at New Luika its mine asset in Tanzania. The company was hoping to upgrade resources and identify new ones at the mine, Zurrin said.
