Shanta Gold (LON:SHG) has updated shareholders about its operations in Tanzania.
The firm said that full-year production at the New Luika mine in Tanzania has beat its target output range with annual tonnes mixed rising to a new company record.
For the year ended December 31, production rose by 3.2% year-on-year to 84,506 ounces, edging above the 80,000 ounces to 84,000 range.
In the fourth quarter, Shanta reported that output fell by 14% on a quarterly basis to from 22,726 ounces to 19,550 ounces.
Looking forward the firm saids that it expects annual production to be between 80,000 ounces and 85,000 ounces
On a good note for shareholders, all sustaining costs toiled $779 per ounce in 2019 which met the guided figure in its $740 to $780 range.
In 2019, Shanta’s net debt was trimmed to $14.3 million from $20.7 million the year before. It is setting its sights on achieving a net cash positive position in 2020.
Shareholders will be further pleased as the firm said it would be boosting its exploration budget in 2020 to $5 million.
Eric Zurrin, Chief Executive Officer, commented:
“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.”
“I’m pleased to report that through low-cost exploration drilling we were able to add new reserves to the mine plan which more than replaced production during the year. Mine life at New Luika continues to be a priority and the Board have approved a significantly increased exploration budget for 2020 as we look to upgrade resources and identify new ounces.”
“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 build on third quarter positivity
In October, the firm told shareholders that it had begun “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.
Shanta Gold will be pleased with the results across the fourth quarter, and with the expanding exploration budget the firm has entered the new year with a motivation to drive forward across 2020.
Shares in Shanta Gold trade at 10p (-1.44%). 16/1/20 15:08BST.
