SHANTA Gold was “comfortably on track” to hit full year gold production guidance of up to 84,000 ounces from its New Luika Gold Mine in Tanzania after registering 19,856 oz in second quarter production, taking the half-year number to 42,230 oz.
The company also continued to make in-roads on debt. Eric Zurrin, CEO of Shanta Gold, declared the firm was one of the “least geared” of the UK gold players. Net debt was down 11% to $26.9m and would be wiped out entirely in the event the Tanzanian government refunded VAT due.
Zurrin even floated the hope there may be “some movement” in the VAT. Tanzania has become an unreliable host, however, embargoing export of production by companies to which it has imputed an offence. President John Magufuli’s conservative administration has also come in for criticism from investors and civil society.
“The company moves into H2 with a strong balance sheet, strong operations, an increasingly attractive orebody and exciting upcoming catalysts,” said Zurrin in notes to the company’s second quarter numbers.
“In the second half of this year we expect more on-mine and regional exploration results,” he said, also pointing towards the launch of the Singida initial public offering.
Shanta is to list its Singida project on Tanzania’s Dar es Salaam Stock Exchange in an effort to raise $20m for its development which is expected to take Shanta Gold’s overall gold output to 100,000 ounces a year. The funds will also provide finance for exploration aimed at expanding the Singida resource.
Shanta said it would retain 51% ownership of Singida post the IPO. It would also be the operator of the project, the company said previously.
