Shanta Gold posts record output in Tanzania

26Jan 2016
Our Reporter
The Guardian
Shanta Gold posts record output in Tanzania

Shanta Gold’s output recovered strongly in the second half of 2015 after another record quarter at its New Luika mine in Tanzania, the miner has said in a statement.

Shanta Gold production soars in second half

The British company, which trades in Tanzania as Shanta Mining Company Limited, is engaged in both exploration and mining projects in highly prospective, under-explored areas in the country,

Its flagship 100 per cent owned New Luika Gold Mine in Chunya commenced gold production in 2012 and produced 84,028 ounces in 2014.

Its other assets are Mgusu in Ilemela, Mwanza Region, 10 prospecting licences covering 474 km² in Singida, and 15 prospecting licences covering 378 km² in Mbinga and Songea districts in Ruvuma Region.

“New Luika’s output rose to 29,139 ounces (oz) in the three months to December, 19 per cent higher than the previous quarter, to take the total for the year to 81,873oz,” the company noted in the statement.

The 2015 total output was higher than the forecast of between 72-77,000oz for the year but still below the previous year’s slightly over 84,000 oz performance.

Shanta expects to exceed that this year. It forecast the 2016 output to range between 82,000 and 87,000 oz at a production cost of between US$750-US$800 per ounce. In 2014 and last year, the company produced each ounce at a cost of US$941 and US$845 respectively.

The record-breaking performance at Luika in the last two quarters of 2015 marked a strong recovery from a difficult start for company in an industry that has been reeling under falling prices.

On Thursday, spot gold prices went down US$3.50, or 0.32 per cent, at $1,098.70 compared to the previous day’s performance. On Wednesday, gold prices surged US$17.20, or 1.58 per cent, to settle at US$1,107.10 an ounce.

It was the gold price's biggest gain in two weeks and highest close since January 7. Escalating fears of a global slowdown and an unrelenting slide in oil prices had investors piling into gold.

In January oil has fallen below US$30 per barrel, with no bottom in sight as crude producers seem to have reached a point of losing interest to keep pumping. On Thursday, March-dated Brent crude, the global oil benchmark, fell 0.9 per cent to US$27.63 a barrel on London's ICE Futures exchange.

New Luika is Shanta’s major asset and getting the mine back on track after first half re-development problems enabled the company to end the year with higher production, lower debts and sharply reduced costs.