New Luika Gold Mine Announces Life Extension And 506,000 Oz Of Gold

New Luika Shanta gold mine Tanzania

Shanta Mining Company Limited (SMCL), a subsidiary of the UK-based Shanta Gold Limited (AIM:SHG) involved with gold mining, development and exploration in Tanzania, has recently released the Life of Mine (LOM) extension study for its New Luika Gold Mine (NLGM) project which indicates new total reserves of gold at 506,000 ounces (oz) up from 479,000 oz found in 2013.

NLGM, located in Mbeya in Tanzania’s south western region, counts with total underground gold reserves increased by 10% to 329,000 oz with lower ore reserves of 1.57 million tonnes at an improved grade of 6.5 grams of gold per tonne (g/t Au) compared with 2.46 million tonnes at 6.1 g/t Au in 2013.

The project open pits’ gold reserves remained unchanged at 177,000 oz of gold with ore reserves of 1.09 million tonnes at 5.08 g/t Au.

The NLGM’s LOM extension allows it to produce 462,000 ounces of gold between January, 2016 and 2022 at an also improved underground LOM All-In Sustaining Costs (AISC) of USD 640 per oz down from USD 748 per oz in 2013.

This aggregate cost together with a pre-production capital cost of USD 38.4 million including contingency, total capital expenditure (CAPEX) over the project life of USD 61.2 million, an 8.0% discount rate and gold price at USD 1,200 per oz, give NLGM project a Net Present Value (NPV) of USD 72 million.

The company is also considering a separated tailing recovery project which could produce up to 19,000 oz of gold with a NPV of USD 5.1 million under the same scenario.

SMCL has also announced that more ore resources exist outside the plan and can potentially benefit from further exploration, since the future pits are included within the NLGM license that enables the company quick access for earlier production.

Elizabeth Hill is one out of four future pits not included in the current company’s six-year plan and it counts with ore reserves of 2.3 million tonnes at 1.7 g/t Au for 128,000 oz of gold.

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