A strong gold price supported Aim-listed Shanta Gold’s profitmaking to $15-million for the six months ended June 30.

This compares with the $4.1-million loss reported for the prior comparable six months.

With 42 383 oz of gold produced in the first half of the year, similar to what was produced in the first half of last year, the company is on track to meet its guidance of producing between 80 000 oz and 85 000 oz for the full year.

Shanta ended the interim period with net cash of $2.1-million, compared with a net debt position of $14.3-million in the prior comparable six months.

Adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) were $34.4-million for the six months under review, compared with adjusted Ebitda of $22.6-million reported for the prior comparable six months.

The company had gross debt of $13.4-million at the end of June, an improvement on the gross debt of $22-million at the end of June last year. 

Meanwhile, the company is progressing financing discussions for its Singida project, in Tanzania, which are expected to be announced before the end of the quarter.

The company also expects to release a scoping study on the West Kenya project, in Kenya, soon. Shanta acquired the project from Barrick Gold for $7-million cash, $7.5-million in shares issued to Barrick and a 2% net smelter royalty on future gold production.

Shanta continues to see encouraging results from drilling programmes at the Bauhinia Creek and Illunga deposits, in Tanzania, while surface exploration drilling just started at the Luika deposit to test for mineralisation continuity.

CEO Eric Zurrin says that entering a net cash position in the first half of the year was a major achievement for Shanta and followed sustained deleveraging over a number of years.

“The New Luika gold mine, in Tanzania, remains on track to deliver production and costs within annual guidance and this has been achieved with a continued exceptional safety record.

 "With the stronger gold price environment, the company remains focussed on value-driven opportunities alongside maintaining sustainable and cost-efficient operations at New Luika.

"With the acquisition of the West Kenya project now complete, Shanta has diversified its East African portfolio with a highly complementary asset that significantly bolsters the company's growth pipeline," he notes.