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East Africa’s Shanta Gold announces US $7m reduction 3 months prior to schedule

By Nita Karume :

East Africa-focused gold producer, developer and explorer, Shanta Gold has announced that the company has been able to achieve a US $7m reduction 3 months ahead of schedule. Earlier on this year, the firm announced its target to reduce annualized costs by a further US $2m. Moreover Shanta Gold has since achieved an additional US $2.1m of recurring cost reductions. This, in turn, increased the total cost reductions achieved to US $7.2m annually.

According to media reports, the 2018 cost reductions are the result of renegotiated contracts with suppliers and the elimination of non-essential G&A spend. As such, the full benefit of the 2018 cost reductions will be realized from the third quarter of 2018.

Meanwhile, the underground operation has been put on hold during this exercise. This, according to Shanta Gold CEO Eric Zurrin, will ensure that underground production continues as planned. He further explained that the cost reductions help cement further the firm’s position as one of the lowest cost producing gold mining companies in Africa. It also forms part of their overriding strategy of maximizing value for their shareholders.

Shanta Gold’s portfolio of properties includes mining licences held at both New Luika and Singida in Tanzania. The new Luika gold mine is located in the Lupa Goldfield of southwest Tanzania. The mine unearthed approximately 87,713 ounces of gold in 2016. It is also the second largest goldfield in Tanzania outside of the Lake Victoria Goldfield.

On the other hand, Singida is an advanced stage exploration and development project with a mining licence granted in 2012. Furthermore, drilling results from an exploration program to expand the understanding of the deposit in 2016 have increased the company’s confidence that Shanta Gold will be able to significantly add to its production of low cost ounces, at a competitive capital cost. However, this is still subject to a feasibility report.

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