East Africa-focused gold producer, developer and explorer Shanta Gold Limited began “rapidly paying down its debt” during a productive third quarter, which saw the Group’s production volumes and sales expand.
The Company booked an impressive reduction in net debt, dropping 23% during the quarter to US $20.7 million. Further, the Group’s net debt narrowed 15% during the same period, to $25.7 million.
This progress was led by improved production volumes, with 22,726 oz produced during Q3, up from 19,856 oz the previous quarter. Shanta Gold added that the average head grade of this output was also superior, at 4.5 g/t compared to 3.9 g/t for the previous period.
Further, while the Group reported that forward sales had dipped by 2,000 oz to 43,000 oz, their operating costs narrowed by $90 per oz to $474 per oz and adjusted EBITDA spiked from $10.5 million to $16.5 million.
The Company said they remained on track to meet their target of 80,000-84,000 oz.
Regarding the Company’s social responsibility ventures, they said enrolment of sesame farmers onto their alternative livelihood programme had increased by 168% during the year-to-date, they built two deep water boreholes for nearby villages and distributed 500kg of sports equipment donated by Eton College, among other activities.
Shanta Gold comments
Eric Zurrin, Chief Executive Officer, stated,
“As we rapidly pay down our debt and improve our financial position, New Luika Gold Mine continues to perform operationally. This quarter has seen us produce over 22,000 oz of gold and positions the Company on track to again meet our guidance for the year. Net debt at US$20.7 m is now the lowest it has been in over six years and has decreased by over 50% since the same period two years ago.”
“Our recent exploration results are encouraging as we look to add more ounces to the New Luika mine plan. Key to our current exploration targets is the close proximity to both the existing sources of high-grade ore and the processing plant. We plan to announce a new resource update shortly which will highlight how we can add low cost gold ounces to our future production and extend the mine life of New Luika.”
After a slight dip, the Company’s shares are up 4.88% or 0.39p to 8.39p per share 17/10/19 13:58 BST. The Group’s p/e ratio is 9.96, their dividend yield is unavailable.
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