RE: 14 Mining Companies to follow for 2021 (Part II) say @tmsreach31 Dec 2020 13:56
Shanta Gold
Through 2020 Shanta Gold (LSE:SHG) made further progress towards its longer term aim of looking beyond its long-time focus on Tanzania.
Production continued at its flagship asset, the New Luika Gold Mine located in the Lupa Goldfield, Tanzania’s second largest after the Lake Victoria field. The mine, now successfully transitioned from a surface to underground operation, has consistently produced 80-88k oz of gold per year since 2014. Production is due to continue to at least 2024, but there is potential for more: the current mine plan excludes an additional 531k oz of resources, and only three of seven potential deposits are currently in production.
Elsewhere, Shanta has started constructing its near-surface mine at Singida, an advanced stage exploration and development project. The mine is due to be commissioned in 2022, targeting 32k oz production per year. A further 664k oz of gold resources are estimated to be available beyond the current seven-year mine plan.
In August Shanta completed the acquisition of the West Kenya Project from Barrick Gold Corporation, paying $14.5m for an asset with an estimated 1.182m oz of resources – with an unusually high average gold grade of 12.6g/t – that has generated $55m through historical exploration. New resource estimate and construction decisions are expected within 36 months. An October fundraise brought in £32.2 million to support plans for planned infill drilling, expansion drilling, and technical studies over the period.
With the West Kenya project Shanta now has total gold resources of 3.2 million oz grading 3.58 g/t across all three of its assets in Tanzania (JORC 2012 compliant), and Kenya (NI 43-101 compliant). The company’s Q3 production and operations update stated an unrestricted cash balance of $6.7m, and net debt of $5.1m, down by more than $44m since 2017. A new Hardman & Co research note gives Shanta a provisional valuation of 31.7p based on NPV valuations for NLGM, Singida and West Kenya, and an expected long-term gold price of $1,700/oz.
Shanta’s strong progress this year is reflected in the sharp rise in its share price, from less than 10p at the start of the year to around 16p today.
****Wishing you ALL an outrageously happy healthy and very profitable New Year!!!****
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