(Alliance News) - Shanta Gold Ltd saw its share price plummet on Tuesday it cut its gold production guidance for 2021.
Shares in Shanta Gold were down 24% at 8.76 pence on Tuesday in London, have set a new a 12-month low at 8.75p earlier.
The Guernsey-based gold mining company reduced its gold production guidance to a range of 55,000 to 57,000 ounces from 60,000 to 65,000 ounces for its New Luika mine in Tanzania.
Operational difficulties relating to the supply of an unreliable emulsion product by a third-party vendor and underground production charging units during its fourth quarter were blamed for the slash in guidance figures.
Shanta Gold added that the emulsion product quality has since been restored, and the underground production charging units have now been fixed.
Chief Executive Eric Zurrin said: "Whilst operationally we had very much remained on track to meet our 60,000-65,000 ounces guidance for 2021, the challenges wholly relating to our emulsion product and production charging units supplier means we've had to temporarily change our underground mining sequence to prioritise ore development headings with lower grades rather than mining from stopes that were available.
"Positively, following increased grade control drilling at New Luika underground deposits over the last six months, reconciliation of mined ounces has been pleasing and averaged plus 4% versus the grade control model. This continues to point to the long-term value opportunity created by New Luika in the Shanta portfolio."
By Heather Rydings; heatherrydings@alliancenews.com
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Shanta Gold (SHG)