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Shanta delivers record gold output, hikes New Luika resource

20th October 2014

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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JOHANNESBURG (miningweekly.com) – London-listed Shanta Gold on Monday reported record gold output for the third quarter of the year.

The East Africa-focused gold production and exploration company delivered 22 720 oz of gold during the three months to September, up 4% from the 21 940 oz delivered during the second quarter of the year.

Following the increase, Shanta maintained its yearly production guidance at between 80 000 oz and 83 000 oz, with its all-in sustaining cost guidance revised downwards to between $900/oz and $950/oz.

“Given the year to date production, we forecast 2014 production will be at the top end of our guidance.

“I am pleased that production and cost performances continue to trend positively. Although the fourth quarter is unlikely to exceed 19 000 oz with the Bauhinia Creek and Luika pit development impacting on ore availability over this period, resulting in a lower grade profile, we remain confident of achieving the 2014 production guidance at a lower cost than previously expected,” CEO Mike Houston said in an update to shareholders.

During the quarter under review, Shanta had sold 18 600 oz of gold at an average price of $1 306/oz, which was a decline on the 22 400 oz sold during the prior quarter. However, 3 800 oz were in transit at quarter-end and were sold in early October.

Meanwhile, Shanta announced that its New Luika gold mine, in Tanzania, received a new lease on life as the company hiked its resource and reported a seven-year life-of mine (LoM) extension.

The miner reported a Joint Ore Reserves Committee-compliant mineral resource estimate and ore reserve increase from 456 000 oz in January to 690 000 oz across the Bauhinia Creek, Luika and Ilunga targets of New Luika.

An in-situ indicated mineral resource increase of 3% to 814 000 oz with an average grade of 4.5 g/t was reported for Bauhinia Creek, Luika and Ilunga, while the in-situ inferred mineral resource for these targets increased 12% to 221 000 oz with an average grade of 2.3 g/t.

The probable ore reserve at New Luika as at September was 4.95-million tons, grading at 4.33 g/t.

“We are very encouraged by the resource and reserve upgrade announced today,” said Houston.

Shanta’s LoM extension and expansion study on the New Luika mine had also been completed, with the third-party review expected to be concluded mid-November.

“Good progress” was also being made with potential debt financiers on funding for the New Luika LoM extension, with discussions to be concluded by end of the fourth quarter.

“The company is confident that it will continue to discover new resources both in the current mining licence and within an economic trucking distance from the processing plant,” Houston concluded.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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