Shanta Gold Limited Final Results

Shanta Gold Limited Final Results

Shanta Gold (AIM: SHG), the East Africa-focused gold producer, developer and explorer, announces its audited final results for the year ended 31 December 2017. The Company’s focus remained on its flagship asset, the New Luika Gold Mine, located in Southwest Tanzania, throughout the Year.

Highlights

Financial

  • Revenue of US$103.4 million (2016: US$107.1 million) at average realised gold price of US$1,263 per oz (“/oz”) (2016: US$1,220 /oz);
  • EBITDA of US$37.7 million (2016: US$50.2 million) inclusive of revenues from development ore;
  • Profit after taxation of US$4.2 million (2016: loss after taxation of US$8.0 million);
  • Net debt at year end reduced by US$4.7m to US$39.5 million (2016: US$44.2 million);
  • All in Sustaining Cost (“AISC”) of US$743 /oz against guidance (restated to World Gold Council basis) of US$781 /oz (2016: US$659 /oz);
  • Capital expenditure of US$37.9 million (2016: US$54.6 million);
  • Operating cash flow before movement in working capital of US$40.3 million (2016: US$50.1 million); and,
  • Cash and cash equivalents of US$13.6 million at year end (2016: US$14.9 million).

Operational

  • Gold production of 79,585 oz consistent with guidance of approximately 80,000 oz (2016: 87,713 oz);
  • Gold sales of 80,365 (2016: 86,332 oz);
  • Milled 632,287 tonnes of ore (2016: 597,583 tonnes);
  • Average recoveries of 91.1 per cent achieved (2016: 89.9 per cent);
  • Average ore grade of 4.3 grams per tonne (“g/t”) (2016: 5.1 g/t);
  • TIFR safety record of 4.02, down from 4.60 in 2016; and,
  • Commercial production declared at NLGM underground operation in June 2017.

Corporate

  • Eric Zurrin appointed as CEO and an Executive Director of Shanta in August 2017 having been previously re-appointed to the Company as CFO in March 2017;
  • Luke Leslie appointed as CFO in September 2017 having previously held a Non-Executive position;
  • Keith Marshall appointed as a Non-Executive Director in June 2017;
  • Prudent hedging programme continued with 22,500 oz of gold sold forward at 31 December 2017 at an average price of US$1,271 /oz; and,
  • VAT refund of US$3.4 million received in November 2017.

New corporate strategy announced

  • New strategy announced in September 2017 focusing on maximising shareholder returns through a modern and efficient mining approach;
  • Cost reductions of US$8.7 m per annum on an annualised basis achieved in November (including US$3.6 m from a new mining method at the Luika underground orebody);
  • NLGM headcount reduced from 1,075 at the end of H1 2017 to 759;
  • Planned installation of additional pre-leach tank expected to increase recoveries by 1.5 -2.0% with a payback period for the project of 4 months; and,
  • Cost saving target (from supplier contracts, G&A costs and redundancies unrelated to the underground operation) increased in January 2018 from US$5.0 million to US$7.0 million per annum on an annualised basis (excluding impact of new mining method at the Luika underground orebody), expected to be executed by third quarter of 2018.

Singida

  • Updated JORC compliant Resource declared at Singida during the year totalling 12.3Mt, grading 1.84g/t and containing 728koz of gold using a cut-off grade of 1.0g/t;
  • Positive results from Phase 1 exploration and resource infill Reverse Circulation (“RC”) drilling conducted at Singida, as announced in April 2018; and,
  • Planning completed for IP and Phase 2 drilling at Singida in second quarter of 2018 in advance of a development decision.

Outlook

  • Annual guidance for 2018 of 82,000 – 88,000 oz at AISC of US$680 – US$730 /oz.

Eric Zurrin, CEO, commented: “We are pleased to report a set of full year results that reflect a sustainable transition to underground mining at New Luika, as well as a new management strategy of cost control and optimisation.

Considerable inroads have been made into reducing the net debt position and the continuation of this is central to plans for restructuring the Company’s balance sheet. Recording a profit in 2017 for the first time wouldn’t have been possible had the underground operation not been transitioned to on time and within budget and our efforts to optimise the Company’s recurring cost base will be a key driver towards improving future cash flows.

Our priorities for 2018 remain focussed on continued low-cost operational excellence, balance sheet deleveraging, and targeted growth.”

No Comments

Post a Comment