Shanta to enter net cash position in 2020
East Africa-focused gold miner Shanta Gold says it is well-positioned for another strong year, after having exceeded its production guidance for 2019.
It produced 84 506 oz of gold in the 12 months to December 31, above the guided 80 000 oz to 84 000 oz.
All-in sustaining costs (AISC) for the year, at $779/oz, were also in line with guidance of $740/oz to $780/oz.
During the last quarter of the year, Shanta's New Luika mine, in Tanzania, was successfully connected to the Tanzania Electric Supply Company's (Tanesco's) power grid, following the construction of the required infrastructure.
The connection to the grid is expected to give the mine access to low-cost power supply that could help Shanta access lower-grade ounces by lowering overall costs. The connection to the grid also diversifies the mine's available power sources.
The mine will initially draw 10% of its power requirements from the Tanesco grid and this might increase to 25% at a later date.
By December 31, Shanta's net debt stood at $14.3-million, the lowest in the company's history.
Shanta said the decrease was achieved as a result of prudent cost containment and a strong gold price.
“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," CEO Eric Zurrin commented in a release published on Thursday.
The gold miner expects to produce between 80 000 oz and 85 000 oz of gold this year, at an AISC of $830/oz to $880/oz. The higher AISC will mainly be driven by the reintroduction of higher-cost supplementary openpit mining from the Shamba pit.
Meanwhile, the company has set its exploration budget for this year at $5-million, an increase of 65% year-on-year. Exploration remains focused on the existing mining licences, as well as regional targets in the Lupa goldfield.
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