Shanta Q2 output leaps with help from newly commissioned low-cost mine, Singida

Eric Zurrin, outgoing CEO, Shanta Gold

SHANTA Gold reported a sharp increase in year-on-year second quarter gold production which came in at 29,403 ounces – 92% higher than the first quarter.

Second quarter adjusted Ebitda was $23.2m which was three times the $7.5m reported in the first quarter. It helped Shanta make serious in-roads on its net debt which fell to $8.7m from $19m in the first quarter.

The performance also included better-than-expected costs, the company said. This is largely owing to first production from Singida, a new gold mine commissioned about three months ago. Its all-in sustaining costs came in at $736/oz compared to AISC of $1,181/oz at New Luika Gold Mine, the firm’s flagship operation.

The second quarter also signals the last full interim period over which outgoing CEO of six years Eric Zurrin will preside. In April Shanta announced he would step down in the third quarter during which time a successor would be appointed.

Said Zurrin of Singida’s contribution: “With this significant increase in production combined with a better than expected cost performance, we have been able to deliver the financial results that we have always said would come with a diversified portfolio”.

Shanta said earlier this month that the commissioning of Singida would see the company’s production average 103,000 oz over the next first years. There was potential for expansion from Singida, it said. Singida, situated in Tanzania, is expected to average 34,000 oz a year over five years after pouring first gold. There were “significant exploration and expansion opportunities”, said Shanta of the mine’s seven year reserve-based mine life.

“The future is exciting for Shanta with our two producing assets delivering record results, and yet with room for further growth at Singida and West Kenya, we are confident in the long-term prospects for shareholders,” said Zurrin.

Acquired from Barrick Gold for $14.5m in cash and shares in 2020, West Kenya represented high grade gold production. In January, Shanta announced a mineral resource of 1.72 million oz at West Kenha including a 91% increase in indicated resources to 722,000 ounces grading at 11.45 grams per ton.