JOHANNESBURG (miningweekly.com) – Aim-listed Shanta Gold expects to deliver a stronger operational and financial performance during the next few quarters as it shifts into a new strategy of improving profitability and reducing debt following legislative changes in Tanzania.
The East Africa-focused gold producer, developer and explorer on September 5 unveiled a new strategy to right-size the business, target operational improvements, reduce costs and shake up management.
“Shanta’s new strategy of focusing closely on cost control, operational improvements and shareholder returns was implemented in September, accelerated by the recent legislative changes in Tanzania,” said Shanta CEO Eric Zurrin.
Reporting on its third-quarter trading update for its New Luika gold mine, in southwest Tanzania, on Thursday, the company noted that its new strategy is being implemented and refined with expectations of an improvement in performance moving forward.
Shanta is reducing the headcount at New Luika by about 40% by December 31, while targeting $5-million a year in savings through a cost reduction programme focused on operational improvement across the business, including working capital management and equipment productivity.
Senior management also agreed to an average 15% reduction in gross cash salaries and to replace cash bonuses with discretionary share awards to increase alignment with shareholders.
Shanta has also cancelled its proposed £3.5-million buyout of TSX-V-listed Helio Resources.
For the quarter ended September 30, production declined to 18 225 oz, compared with the second quarter’s 19 657 oz.
Gold sales for the third quarter increased to 18 487 oz, from 17 982 oz in the second quarter, at an average price of $1 267/oz.
Shanta reported stable third-quarter cash costs of $558/oz, while all-in sustaining costs (AISC) increased from $735/oz to $822/oz quarter-on-quarter, including $39/oz for higher royalties and a new clearing fee.
The group maintained its lowered 2017 full-year production guidance of about 80 000 oz at an AISC of $800/oz.