SHG.L Share News (SHG)

(Sharecast News) - East Africa-focussed gold producer Shanta Gold announced the expansion of processing capacity at the New Luika Gold Mine on Tuesday.
The AIM-traded firm said the integration of a new pilot plant had started, with commissioning scheduled for January.

Following commissioning, the annual nameplate processing capacity at New Luika was expected to increase to a baseline of 708,000 tonnes per annum, from a current capacity of 620,000 tonnes per annum, with the projected annual processing rate increased to a baseline of 783,000 tonnes per annum from 695,000 tonnes per annum.

The company said it had started the plant upgrade through the integration of the 10-tonne-per-hour pilot plant, which was previously purchased in 2016 for the Singida Project.

Installation of the pilot plant at Singida was abandoned following a review of the project economics, and it had been in storage in South Africa since purchase.

The cost to integrate the pilot plant at New Luika was estimated at $1.2m (£0.94m), and would be financed from cash flow.

Shanta said the New Luika plant upgrade would focus on increased ball mill power, with upgrades to other components including an increase to pumping capacity, a tailings discharge system, and additional leach capacity to support the higher throughput, and increased operability.

Increased plant capacity would provide New Luika with the flexibility to reduce cut-off grades, thus lowering the hurdle for resources to be converted to minable ounces.

The board said detailed engineering design was complete, with the company starting civil works on the mill floor and foundation.

Plant capacity expansion was expected to be completed in January, with milled throughput to increase immediately thereafter.

"Shanta has consistently expanded plant throughput over the last three years," said chief executive officer Eric Zurrin.

"Throughput in 2021 is expected to be 24% higher than 2017."

At 1431 BST, shares in Shanta Gold were down 3.06% at 17.45p.