On Target With Singida Development
East Africa-focused gold producer Shanta Gold (AIM: SHG), has released its unaudited interim financial results for the six months ended June 30, 2021.
The company’s asset portfolio includes New Luika Gold Mine (NLGM) and Singida Project in Tanzania and the West Kenya Project Kenya.
H1 2021 HIGHLIGHTS
Financial
- Revenue of US$57.8 million (H1 2020: US$73.0m);
- EBITDA of US$17.4 m (H1 2020: US$27.5m);
- Profit before taxation of US$8.6m (H1 2020: US$15.3m);
- Profit after taxation of US$3.1m (H1 2020: US$1.0m);
- Maiden final dividend of 0.10 pence per share paid in April 2021, with an interim dividend proposed of 0.10 pence per share, payable in October 2021;
- Operating cash flow before movement in working capital of US$16.6m (H1 2020: US$29.8m);
- Group wide exploration spend of US$4.6m (H1 2020: US$1.4m);
- Capital expenditure of US$11.5m (H1 2020: US$7.4m);
West Kenya
- Phase 1 drilling programme completed with highly encouraging assay results received;
- Third drill rig to be on site by the end of August and Phase 2 drilling is underway;
- Resource update expected to be released in September, focused on approximately 10% of the total NI43-101 Inferred resource of 1.2 Moz between 0-200 metres in depth;
- Vocational security guard training for 50 participants in partnership with a local security company, with a second programme now underway.
Singida
- Mine construction progressing with detailed designs and tenders for key infrastructure ongoing;
- Manufacture of the Ball Mill underway;
- US$2.0m paid towards manufacture of the Crushing Circuit, which is nearing completion;
- Onsite works continue with bush clearance and installation of mine infrastructure underway; and
- Pre-stripping due to commence in Q3 2021.
Exploration – New Luika
Assay results received from the Luika deposit added 76,461 oz of new Indicated resources grading 7.97 g/t;
Resource block model update for BC East Area 1 added 39,786 oz of new Indicated resources grading 4.74 g/t, announced post Period; and,
In aggregate, results from the two targets added 116,247 oz of new resources at NLGM (before depletion) grading 6.47 g/t, at a cut-off grade of 1.0 g/t Au.
“Shanta’s exploration success during H1 has generated new high-grade resources at Luika and BC East Area 1,” CEO Eric Zurrin, said.
“West Kenya is also proving to be very promising with phase 1 drilling now complete and highly encouraging assay results including one of our highest-grade intersections at 4m at 706 g/t. We continue to be excited by the prospects of West Kenya and we look forward to announcing a Resource Update in September.
“Whilst we are disappointed that our H1 gold production and sales are lower than last year, our strong fundamentals of net cash, low debt and consistent operating cashflow attest to the Company’s robust financial health, and I’m delighted to announce an interim dividend of 0.10 pence per share proposed for payment in October 2021.
“We are also pleased to confirm that we have received US$4.2 million in VAT offsets during H1 and a further $2.1 million VAT cash refund post Period as we work with the Tanzanian government to clear the outstanding balance.
“Our new five-year plan outlines our strategy to transform the business into a 110,000+ ounces gold producer by 2023. Our forecast increase in reserves and resources demonstrates the huge potential in the portfolio, and our extension of the reserve-based mine life at New Luika and Singida underpins our confidence in the long-term sustainability of both assets.”
For further information please visit: https://www.shantagold.com/
