Shanta Gold (SHG:AIM)
The company reported record annual gold production for 2016 of 87,713 oz; beating guidance of 82k-87k oz. All in sustaining cost for 2016 was US$661/oz which was lower than guidance of US$690-740/oz and an improvement over 2015 AISC of US$845/oz.
Q4 2016 production was 18,897 oz Au, at AISC of US$747/oz. The company ended the year with a cash balance of US$15 million. The company was able to improve their financial position for the year by reducing gross debt from a peak of US$75 million in H1 2016 to US$57.9m by year end.
Guidance for 2017 is 80k-85k oz of gold production at AISC of US$800-US$850/oz. Production will be weighted to the second half of the year, as transition from surface to underground operations will require processing of lower grade ores, until higher grade underground ore is established.
A feasibility study is underway for New Luika’s Ilunga deposit as a new high grade operation; an updated mine plan incorporating the use of existing NLGM infrastructure and Elizabeth Hill is expected to be completed at the end of Q1 2017. The Singida Pilot Mining Project is scheduled to start operations in Q2 2017.
Management expects to continue to deliver high margin ounces and generate strong operational cash flows in 2017, as well as continue to reduce debt despite completion of the underground development program in H1 2017.