Initial tests highlight potential for Shanta Gold

Shares in Tanzania-focused gold explorer Shanta Gold climbed by 16% on Tuesday after the firm revealed positive test results from its 100%-owned mine in Singida.The feasibility study showed that the if the mine produces 45,000 ounces of gold per annum at a capital cost of $39m and an average operating cost of $412 per ounce, then - based on a $1,200 per ounce gold price - the company should make a net present value of $130m and would have an internal rate of return of 126%."The significant results from the Singida Feasibility Study show attractive investment outcomes and will allow Shanta to proceed to project construction," said executive chairman Walton Imrie."Singida will enable Shanta to transform into a mid-tier gold producer by 2013, as the Company's annual gold production should increase to more than 100,000 ounces once the new project is in production alongside the New Luika Gold Mine," he said.By 13.11, shares were trading at 26.62p, 16.39% higher than Monday's close of 22.88p.BC