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Shanta lowers New Luika full-year output guidance

7th December 2021

By: Creamer Media Reporter

     

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Aim-listed Shanta Gold has lowered its full-year production guidance for the New Luika gold mine, in Tanzania, to between 55 000 oz and 57 000 oz of gold.

This compares with the previously guided 60 000 oz to 65 000 oz of gold.

Shanta attributes the lower guidance to operational difficulties as a result of the supply, by a third-party vendor, of an unreliable emulsion product and underground production charging units during the fourth quarter.

Emulsion product quality has since been restored and the underground production charging units have been fixed.

"While operationally we had very much remained on track to meet our 60 000 oz to 65 000 oz guidance for 2021, the challenges wholly relating to our emulsion product and production charging units supplier means we've had to temporarily change our underground mining sequence to prioritise ore development headings with lower grades rather than mining from stopes that were available.

"Positively, following increased grade control drilling at New Luika underground deposits over the last six months, reconciliation of mined ounces has been pleasing and averaged +4% versus the grade control model. This continues to point to the long-term value opportunity created by New Luika in the Shanta portfolio," says Shanta CEO Eric Zurrin.

Shanta's share price on the LSE fell by nearly 23% following the announcement on Tuesday.

Meanwhile, Zurrin notes that Shanta is well funded with cash and available liquidity of $24.7-million as at November 30, plus operating cash flow from unhedged gold sales.

"Shanta's negligible debt position of $1.4-million provides significant additional liquidity on the balance sheet.

"Growth projects at Singida and West Kenya continue on track and we look forward to providing a resource update in early 2022 for the latter," he adds.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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