Aim-listed East Africa-focused gold producer Shanta Gold on Thursday announced strong financial and operational results for the year ended December 31, 2018.

The results focussed on the performance of Shanta’s flagship asset, the New Luika Gold Mine, in south-west Tanzania.

Shanta’s revenue reached $103.8-million, while its earnings before interest, taxes, depreciation and amortisation reached $45.7-million – up 21% from 2017.

Operating profit increased by 75% year-on-year to $19.3-million, while profit before tax amounted to $13.1-million, a 263% increase compared with 2017.

Net profit improved to $8-million, from $4.2-million in the prior year.

Net debt reduced by $8-million to $31.5-million as at December 31 – its lowest level in six years.

The company’s cash costs amounted to $538/oz, while its all-in sustaining cost (AISC) of $730/oz, was below the $750/oz guidance.

New Luika produced 81 872 oz of gold in 2018, exceeding the guidance of 80 000 oz, while gold sales increased by about 2% year-on-year to 82 457 oz.

Milled tonnes increased by 1.1% to 639 678 t, with the mine achieving average recoveries of 90.9% and an average ore grade of 4.4 g/t.

OUTLOOK
Shanta has set its production guidance for this year at between 80 000 oz and 84 000 oz at an AISC of between $740/oz and $800/oz.

CEO Eric Zurrin commented that 2018 had been a “transformational” year, as it was the company's first full year of underground production from its flagship operation. Additionally, Shanta’s continued implementation of its cost strategy resulted in a 21% reduction in net debt.

"Looking ahead, a key focus for Shanta is mine life extension at New Luika . . . we have doubled our exploration budget for 2019 and identified a number of key targets within our licence area."

Zurrin further noted that Shanta had several other “exciting catalysts”, specifically plans to develop its second asset, Singida.

“During the fourth quarter of 2018, we announced compelling project economics and a development plan with a net present value of $31-million and an internal rate of return of 67%.

“Asset-level funding plans for this project are progressing, with site visits by interested parties having taken place,” he concluded.