JOHANNESBURG (miningweekly.com) - East-Africa focused gold producer Shanta Gold has successfully completed an oversubscribed bookbuild for the conditional placing of about 111-million new ordinary shares.
These shares were conditionally placed by stockbroking and advisory house Peel Hunt at 6.5p a share, with certain existing, new institutional and other investors, raising gross proceeds of $10.5-million.
"These proceeds significantly strengthen the company's financial position as we continue the development of the future underground operation at our flagship New Luika gold mine (NLGM),'' said Shanta Gold CEO Tony Bradbury.
Funds from the placing would help the company to execute its base case mine plan, undertake the underground development of NLGM and progress satellite deposit exploration.
FINANCIAL RESULTS
Meanwhile, the company reported earnings before interest, taxes, depreciation and amortisation (Ebitda) of $31.9-million in the year ended December 31, 2015, compared with Ebitda of $33-million the previous year.
Loss after taxation of $17.3-million was reported as a result of a one-off noncash depreciation charge of $21-million for waste stripping and future development expenditure.
The company announced revenue of $95.7-million compared with $114.9-million the previous year, along with an average realised gold price of $1 163/oz.
Gold production of 81 873 oz exceeded guidance of 72 000 oz to 77 000 oz, while gold sales of 80 622 oz were reported at an average price of $1 163/oz, compared to an average spot price of $1160 /oz.
"While 2015 saw a lower gold price than in the previous year, Shanta's position in the lowest-cost quartile of gold producers ensures that the company is able to withstand a continued volatile market while delivering significant margin into the business,” Bradbury stated.
Shanta further reported a cash balance of $16.3-million with cash generated from operations of $12.3-million before working capital and capital expenditure of $5.6- million.
OUTLOOK
The NLGM’s reworked mine plans for the Bauhinia Creek and Luika pits resulted in a substantial reduction in costs and the company anticipated to be at the higher end of its 2016 yearly production guidance, which is between 82 000 oz and 87 000 oz.
Shanta published an updated reserves statement in September last year, as well as an underground feasibility study and base case mine plan, which provided the company with a clear production platform to 2022.
“Part of this vision, and a major focus for the 2016 financial year, will be the transition to underground mining, alongside the renewed emphasis on the company's exploration programme, which is set to define additional resources and reserves within the mining licence, and an economic radius of the New Luika plant,” he said.