Photo by: Bloomberg
JOHANNESBURG (miningweekly.com) – Fund manager Liberum Capital has sung the praises of emerging gold producer Shanta Gold, describing the Tanzania-focused miner as “on a roll”.
“Already this year, it has announced a resource and reserve update at its flagship New Luika mine, in Tanzania, and a maiden reserve at its next mine, Singida, also in Tanzania, which has driven its shares up 17%.
“[In addition], the rest of the year is also stacked with rerating catalysts, including [production] expansion to over 80 000 oz/y at the New Luika mine and a potential doubling of the mine life,” the firm said on Friday.
Following an extensive drill programme at Singida, the miner on Wednesday announced a maiden reserve of 1.39-million tons at 5.1 g/t for 230 000 oz of recovered gold.
The ore reserve estimate, which focused on Singida’s Gold Tree and Jem deposits, was based on a 2009 Joint Ore Reserves Committee-compliant mineral resource estimate of 5.18-million tons at 3.3 g/t for 550 000 oz.
Meanwhile, full-year production from New Luika, which had been in production since 2012, beat the targeted 63 000 oz to deliver 64 054 oz of gold in 2013.
A new crusher, elution plant and electrowinning plant would increase production to over 7 000 oz/m by the second half of the year.
“The exploration upside [at New Luika] is huge, with only 5% of the Lupa goldfields [surrounding the mine] explored to date. In addition, the company’s next mine, Singida, offers low-cost, low-execution risk production growth, while attractively low costs drive Shanta down the global cost curve. Buy,” said Liberum.