Shanta Mining’s Board Chairman, Anthony Durrant said in the country’s annual report for 2018 that currently the London Stock Exchange listed company is reviewing options to fast-track the development of Singida having announced the project economics in the final quarter of 2018.
“Singida will be separated into a new company for funding by third parties at the asset level. We remain optimistic that Singida will progress to production in the near future,” Durrant said.
He said the development of Singida could take Shanta’s consolidated production to over 100,000 ounces per annum once operational saying in 2019, the company is expected to repay a significant portion of its outstanding debt including a partial repurchase of the convertible notes.
The Shanta Board Chairman whose company also owns the Mbeya based New Luika Gold Mine, said Singida is a potential major contributor of value for shareholders and 2018 marked a year of steady progress towards realising the asset’s full potential.
“Key successes included the definition of a new Joint Ore Reserve Committee compliant resource estimate, which signalled a 56 percent increase in measured resource,” Durrant added.
Seconding the chairman’s observation, Shanta CEO, Eric Zurrin said the total measured and indicated resources at Singida increased to 381 kilo ounces at 2.08 gram per tonne. Zurrin said physical works at the site were conducted throughout the period with key infrastructure in place and included the ability to connect to the government-owned power grid, sustainable water provisions in situ and completion of resettlement facilities and housing.
“During 2018 the group embarked on a corporate restructuring process to transfer Singida mining licences and assets into a new company, which is 100 percent owned by our Tanzanian operating company Shanta Mining Company Limited,” he noted.
The Shanta CEO further explained that the move paves the ground for a potential future asset level financing and as a result, the group announced its project economics during the period resulting in a net production value of US$31 million and investment rate of return of 67 percent.
“These are based on an average annual production from open pit mining of 26 koz for an initial six year period, life of mine cash costs of US$794/oz and a pre-production capital requirement of US$19 million,” he added.
Last year, Shanta Gold through its local subsidiary, Shanta Mining Company Limited’s annual results and audited accounts indicated that total mill feed was 639,678 tonnes at an average grade of 4.4 grams per tonne for the production of 81,872 ounces of gold.
As a result, the company’s turnover for the year from sales of gold amounted to U$103.8 million (over241.4bn/-), compared to US$101.5 million made in 2017 which represented an increase of 2.3 percent. The report said the turnover increase was largely due to a proportional increase in ounces sold, with the average selling price realised for the year being slightly lower than that of 2017.