East Africa-focused gold producer Shanta Gold (AIM: SHG) announced its production and operational results for Q1 2017 for its New Luika Gold Mine in Southwest Tanzania, showing an increase of in the gold production of +8% compared to Q4 2016.
Quarterly gold production reached 20,416 ounces in Q1 2017 compared to 18,897 ounces in Q4 2016.
Quarterly gold sales reached 23,252 ounces at an average price of USD 1,249 per ounce, compared to an average spot price of USD 1,219 per ounce.
Forward sales from April to October 2017 stand at 25,000 ounces at an average price of USD 1,292 per ounce.
The company indicates that the Revised Mine Plan (RMP) was delivered as promised lifting gold production by 39% when compared to the 2015 Base Case Mine Plan.
Chief Executive Officer Toby Bradbury commented: “Shanta had a promising start to the financial year with more ounces produced, at a greater margin than planned, ensuring the company is on track to meet its 2017 guidance of 80-85,000 ounces at an All-In Sustaining Costs (AISC) of USD 800 – 850 per ounce.”
Shanta Gold currently has defined ore resources on the New Luika and Singida projects in Tanzania and holds exploration licences over a number of additional properties in the country.
New Luika Gold Mine commenced production in 2012 and produced 87,714 ounces in 2016.
The Ministry of Energy and Minerals of Tanzania issued a ban on the export of mineral concentrates and ores for metallic minerals such as gold, copper, nickel, and silver, with effect from 2nd March 2017
The ban impacted the sale of gold of another large gold producer in Tanzania, Acacia Mining, as indicated in its Q1 2017 results.
However, the ban had no impact on Shanta Gold’s sales as it applies to mineral concentrates and Shanta produces instead doré, a type of gold bar that can contain silver and some impurities.
Doré bars are exported and sold to refineries that produce pure gold bars that comply with London Bullion Market Association standards.
The processing plant that exists at New Luika is appropriate in size and capacity for the Shanta Gold rate of production, which is between 80,000 ounces a year and 90,000 ounces a year.