Shanta’s Zurrin says 2023 is the year of “serious growth” for gold producer

SHANTA Gold missed annual gold production guidance by 4% in the 12 months ended December, but CEO Eric Zurrin said in a fourth quarter update today he was confident of a major improvement this year.

Production totalled 65,209 ounces last year. Mined from New Luika in Tanzania, this was below the 69,000 oz targeted and follows a disappointing performance in 2021 when below expected grades at New Luika sent the firm’s shares to a record low.

This explains why Shanta was able to achieve an 18% year-on-year increase in annual gold production from New Luika – representing a record high – but still undershoot guidance.

However, the commissioning of greenfields project Singida, also in Tanzania, would lift Shanta’s gold output north of 100,000 oz a year. ‘Hot commissioning’ of the project’s processing plant was due in the first quarter, Zurrin said.

“The mine (Singida) is currently forecast to add a further 45% to 60% to the group production profile, transforming the company’s short-term future and diversifying the asset portfolio,” said Zurrin.

Shares in the company fell nearly 3% by midday in London but are nonetheless 33% higher on a 12-month basis, assisted by the dollar gold price which is 16% higher over the last 90 days. Gold is currently trading at $1,919/oz.

Commenting on New Luika’s outlook, Zurrin said his company would increase open pit capacity 40% by adding new mining equipment from a second contractor. A new underground mining rig was also due for delivery which would help “derisk” the mine, said Zurrin.

He also promised “a significant update” to the mineral resource estimate at West Kenya, a prospect Shanta bought from Barrick Gold. “We are very optimistic about its future,” said Zurrin of the project adding that Shanta contained “serious growth”.

The company was the subject of several takeover or merger approaches last year, all of which were rejected. Zurrin said previously the company remained “in the takeover bucket”, but did not elaborate on whether discussions with other companies were ongoing.