Shanta Gold chief basking in Chunya’s New Luika gold mine success

22Jul 2020
The Guardian Reporter
Dar es Salaam
The Guardian
Shanta Gold chief basking in Chunya’s New Luika gold mine success

Gold production from New Luika gold mine in Chunya district of Mbeya region increased by over 2,000 ounces during the second quarter of the year compared to quarter one of 2020.

Shanta Gold Limited CEO, Eric Zurrin.

Shanta Gold Limited’s CEO, Eric Zurrin said in a recent interview with London based Proactive Media that the company produced 22,216 ounces of gold during the period which was up from 20,167 by end March 2020.

Zurrin noted that because of the impressive performance, the company had net cash of U$2.1million (over 4.8bn/-) at the end of June 2020, the first such occasion in its producing history having had net debt of U$15.1mln at the end of the first quarter.

"Shanta enters a new chapter with a net cash position, completing a period of enormous deleveraging," he said adding that it has also been working up the resource at Singida, which now stands at 243,000 ounces.

As a result of the performance, Shanta Gold’s shares gained value on Monday at London Stock Exchange. In morning trade on Monday, Shanta Gold shares were 8.6 percent higher at 15.88p. The Shanta CEO added that annualised Q2 2020 underlying earnings at spot gold was, “Just under U$100 million (over 231.8bn/-) per annum from the New Luika mine with margins expanded from lower costs and a rising gold price.”

“Unrestricted cash at period’s end was U$12.9mln (Q1 2020: U$5.3m), with U$2.5m available to draw from its working capital facility,” Zurrin stated noting that the company enters a new chapter with a net cash position, completing a period of enormous deleveraging.

"Shanta expects to shortly conclude the acquisition of Barrick's Kenya assets whereupon Shanta will own three projects with three million ounces of high quality gold resources. Shanta's near-term focus is on replacing reserves at New Luika, financing and commencing Singida's construction, and expanding the resource base at the West Kenya Project. We remain committed to rigorous capital allocation, growth of underlying shareholder value and to managing a sustainable and responsible mining company," Zurrin.

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