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June 15, 2024
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Shanta Gold cuts 2021 output guidance, but remains on track to become a mid-tier gold producer in Africa

It expects average annual gold production from its Tanzanian assets to increase to about 116,000 ounces from 2023-2025
Shanta Gold Ltd  reduced its production guidance for this year due to weaker output in the second quarter and a revised operating plan, although it said it remained on track to become a mid-tier gold producer in Africa.
It expects to produce 60,000-65,000 ounces at an all-in sustaining cost (AISC) of US$1,325-1,375 an ounce in 2021, versus its previous guidance of about 80,000 ounces.
Its gold production in the second quarter was 14,201 ounces due to lower-than-anticipated grades from underground mining, taking its output for the first half to 28,842 ounces.
On a positive note, it said the installation and ramp-up of third mill at its New Luika Gold Mine (NLGM) has been completed resulting in throughput of 2,450 tonnes per day (tpd) being achieved by the end of June, higher than the anticipated 2,300 tpd announced in April.
Shanta also announced an updated five-year operating plan for its Tanzanian assets, including NLGM and the Singida gold project.
Its gold production forecast from Tanzanian assets is about 499,000 ounces for the five-year period covering the second half of 2021 to the second half of 2026. Average annual gold production from Tanzanian assets is anticipated to be 116,000 ounces from 2023-2025 at an average AISC of US$986 an ounce.
“We’ve had some real exploration success at Shanta Gold during 2021 leading to the positive five-year outlook that we’ve outlined this morning transforming us to a 110,000+ ounces gold producer by 2023,” said chief executive Eric Zurrin.
However, it has also decided to defer mining of newly discovered ounces at Luika and Bauhinia Creek East Area 1, previously expected for the second half of this year, until 2022 and 2023.
“Whilst we are looking forward to the future, we are disappointed that we will be reducing this year’s production guidance to 60,000-65,000 oz,” said Zurrin. “Whilst this is partly due to a deferral of ounces to 2022 onwards, it is not the outcome we hoped for this year.
“Our softer production for Q2 has also meant that our revenues have been slightly reduced for the quarter but we are pleased to confirm that we have received US$4.2 million in VAT offsets as we work with the Tanzanian government to clear the outstanding balance.
“We have a strong future across our portfolio of assets in Tanzania and Kenya, with near term production at Singida and exploration upside in New Luika and West Kenya, and we remain on track to fulfilling our ambition of becoming a mid-tier gold producer in Africa,” he added.
The AIM-listed company also announced group-wide JORC compliant gold reserves as at 30 June 2021 of 666,000 ounces grading 2.99 grammes a tonne (g/t).
Gold reserves at NLGM are 423,000 ounces grading 2.99 g/t, up from 382,000 ounces grading 2.98 g/t as at end December 2020. The reserve-based mine life has also been extended to 2026 at NLGM and 2029 at Singida.
Group-wide its gold resources are 3.215mln ounces grading 3.62 g/t.
Shanta said there was also significant upside through the potential conversion of 7.26 Mt grading 2.37g/t for 552,000 ounces of resources at NLGM and 9.78 Mt grading 2.11 g/t for 664,000 ounces of resources at Singida, currently sitting outside the five-year plan.
“Our revised group-wide gold reserves and resources at 666,000 oz and 3,215,000 respectively demonstrate the huge potential in the portfolio, and our extension of the reserve-based mine life to 2026 at New Luika and 2029 at Singida underpins our confidence in the long-term sustainability of both assets,” said Zurrin.

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