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Matthieu Bos has now served 6 months as independent director of SHG since confirmed appt on 22/5/23. In this time he has not been letting the grass grow under his feet!
He is currently the President and CEO of SRG Mining, an advanced stage graphite development company with assets in Guinea, W Africa. For the past 5 months he has been working with a Chinese company C-ONE who has made a strategic investment in SRG and together they plan to develop a large graphite mine in Guinea and market the processed material to the EU for battery production.
RNS yesterday 29/11/23. SRG and C-ONE sign non-binding term sheet. C-ONE to make C$17M investment in SRG. SRG and C-ONE to develop anode material facility in Morocco. SRG to maintain TSX-V listing and redomicile outside of Canada.
I have no idea if Matthieu has applied for the CEO position in Shanta but he would be eminently suitable and highly qualified with much Chinese experience both with SRG and previously with the Ivanhoe/Chinese mega copper mine across the border from TZ in DRC.
Eric says Singida cost of development was $42 million for current 34k oz annual production capacity. Add $6.5 million for the second ball mill etc and we get $48.5 million for 60k oz pa which is baked in the cake.
He says that if they didn't do the engineering, purchasing, construction and management (EPCM) themselves it would have cost near double.
If they adopt the same approach for Ramula, WK, for an initial 100k oz development taking ore from the Ramula open pit and some high grade trucked in from Isulu/Bushiangala a low ball scaled up cost estimate would be c.$90 million.
This Shanta could handle itself with accumulating cash 2024/25/26 plus a moderate s/t bank loan quickly repaid from mine profits.
There would be no need to partner with another party for such a low risk and low cost development.
Then next would be Isulu/Bushiangala open pit/underground development that would be higher cost and higher risk.
A major now next door at Singida.
Eric: "We’re not the only ones, incidentally, to believe in the potential of the Singida area as one of the gold majors has recently staked out land immediately to the south of our property".
If it is Barrick pegging leases to the south of and adjacent to Singida it's possible they could take an interest in all of Shanta's assets in due course.
WK is known to them as Shanta bought the licenses from Acacia (Barrick) when Barrick was reducing it's involvement in the area due to the Magafuli wild elephant saga. But a new chapter has begun for Barrick here. Barrick would be interested in property that yields a minimum 200k to 500k+ oz gold pa.
Shanta is on the way to fitting that bill!
The key drilling news will be from Singida and WK Ramula.
Ramula. 2023 drilling aims to increase M&I inventory and expand Inferred for the proposed open pit. Potential for new discoveries of stand alone deposits within
The key drilling news will be from Singida and WK Ramula.
Ramula: 2023 drilling aims to increase M&I inventory and expand Inferred for the proposed open pit. Potential for new discoveries of stand alone deposits within
Overview of Shanta Exploration. Shanta now has significant funds to invest in exploration that has been lacking in recent times. Capex for Singida was completed in H1/23 and the new mine has been contributing significantly to cash flow from the end of Q1,
WK Exploration.
>20 robust targets on the 580 sq km tenement package.
+5 targets within a few km of Ramula
2021. approx $4.5 million.
2022. $2.1 million.
2023. 2023 drilling programmes re-commenced in May 2023.
Isulu and Bushiangala 2023: Diamond Drilling 24 DD for 10,500 me.
2/11. 4,421 me drill results reported from 12 diamond holes conducted in Q2/23 at the Isulu and Bushiangala deposit, and 717 metres of drilling from 6 diamond holes at Ramula.
Drilling has been ongoing in H2 to meet program with further results to come.
Some historic results from Isulu/Bushiangala:
4 me at 706.3 gm/t
13.8 me at 46.7 gm/t
0.5 me intercepts at 1,000 gm/t plus.
Singida Exploration.
Several targets on large (30 sq km) underexplored mining licence + external potential (partly owned by Shanta)
2021. nil.
2022. nil.
2023. Current drill program. 31 holes designed, totaling 5,670 me.
Vivian. 24 holes of infill drilling for 3,000m aiming to convert 60k oz Au to indicated and include into LOM.
Gold Tree, Jem, Vivian. Four exploration holes designed to test the inferred displacement faults and extend the ore bodies. Extensional, parallel and UG targets.
Drilling results expected December/January.
NLGM.
Fully funded each year to increase reserves by at least at much as is depleated each year through production. Current reserves extension covers production to Q1/28 before any drilling in 2023.
2023 drilling results expected in December.
G G G. Thanks to you as well for your detailed analysis here.
I think this first drill campaign at Singida for ages is to add ozs to the first production pits and do some exploration drilling the results of which will determine where to go next with drilling in 2024. Shanta exploration manager is looking at historic drilling results. He wants to understand where is most cost effective to drill initially now given there are so many targets! One aspect of current drilling is the 4 deep drills at GT/Jem/Vivian to get an idea of continuity of resource at depth, the effects of faulting and potential for these deposits merging.
If these initial results are good and capital allocation is approved, we should be looking at, at least, a doubling of resources to 1 million oz to give a long life expanded mine and protection against any future declines in production at the now mature mine at NLGM .
Singida. These licenses are massively under explored. Drilling is underway for the first time in about 10 years whilst the company has been building the new mine and processing facility there and involved in other activities at NLGM and WK. First new drill results from there are likely in December/January time frame.
Current drill program. 31 holes designed, totaling 5,670 me.
Vivian. 24 holes of infill drilling for 3,000m aiming to convert 60k oz Au to indicated and include into LOM.
Gold Tree, Jem, Vivian. Four exploration holes designed to test the inferred
displacement faults and extend the ore bodies. Extensional, parallel and UG targets.
Total Resource: 460k oz grading 2.7gm/t.
75% of current resource, 335k oz grading av. 3gm/t, are at the chain of 3 deposits of Gold Tree, Jem, Vivian.
GT: 216k oz
Jem: 82k oz
Vivian: 37k oz (to be increased to 100k oz with current drilling?)
Seven open pits are planned to be mined as per the current Life of Mine Plan.
To be investigated is the possibility of linking GT/Jem/Vivian pits to form a combined pit.
Singida has considerable upside potential given its location within a greenstone deposit, meaning it is well suited to further exploration growth. Only 26% of current resources are included in the existing life of mine plan and 90% of contained gold within reserves are less than 150 meters from the surface, highlighting the potential for reserve expansion at depth.
It is very likely that new resources will be added, both at surface and at depth, in the current and future drill programs allowing the purchase of a second ball mill for $6.5 million to double capacity of Singida from 34k oz per year. Combined with NLGM a total capacity for Shanta of 140k oz year from 2025.
San Jose AISC of $1953 means it is now high cost and running at break even at best at the current gold price.
Pallancata closing now for 3? years on C&M.
What production does HOC have left?: Inmaculada. (Brazil H1 next year).
Can see why Ignacio Bustamante, CEO, has moved on from his long standing exec position.
McEwan Mining on JV with HOC San Jose production.
In Q3, the San Jose Mine produced 17,800 GEOs, an increase of 3% compared to Q2/23 due to a modest improvement in processed tonnes. Our joint venture partner and mine operator, Hochschild Mining, reiterates production guidance of 66,000 to 74,000 GEOs for the year. Cash costs(4) and AISC per GEO(4) sold for San Jose were $1,445 and $1,953, respectively. We expect costs to remain approximately 15% above 2023 guidance due to additional capital development costs associated with the operator's revised mine plan.
28/9/23. Italia MDC Bank loan/refi. "Subject to specified performance improvements due to be made by the end of 2023."
If the problems here were easy to fix it would not be taking 9 months or more to fix since the plant was declared 'operational' in March. There is no information on current or past performance of the MDC and no information on what performance improvements the Bank requires. The Bank refi is not to EQT but to the Italia SPV where EQT holds 20%.
This is THE key project. EQT is not levelling with shareholders on this subject (as has been the case since December). Rather the policy is concealment and playing for time which is now running out ......
22/6/23. Additionally, Italia MDC is pursuing refinance of the plant asset by an Italian bank, which is expected to complete during Summer 2023.
4/9/23. Italia MDC S.r.l. the operating company for the Plant, is implementing a series of performance improvements anticipated to be completed in early Q4 2023.
So we have gone from Summer, to early Q4 to the end of 2023. As with all of EQT's predicted end dates they get pushed back and back and back which is just one reason why DP has zero credibility.
VH. Thanks for for your information about this plant in the summer and continued interest.
The company has provided no performance metrics or details of the running of the Italia MDC so far.
It seems the tech has not been performing to spec and has been operating at a loss.
On 4/9 EQT announced a Bank loan of EU2.9 million subject to certain performance criteria to the MDC.
"Provision of funds is subject to the Plant's achievement of certain performance criteria set by the Lender. Supported by EQTEC engineers, EQTEC Italia MDC S.r.l. ("Italia MDC"), the operating company for the Plant, is implementing a series of performance improvements anticipated to be completed in early Q4 2023, at which point, assuming the required performance criteria have been achieved, Italia MDC will draw down the amount of the full Facility."
What recent info do you have?
The mining space in TZ has changed dramatically in the past few years as I have mentioned in previous reports. Eric in his presentation on Wednesday alluded to the big fish moving in in the case of BHP, or back in in the case of Barrick! Shanta's investment at Singida is on the back of this new climate of partnership with the TZ government that has been established since the passing of President Magafuli.
BHP has a 17% investment in Lifezone Metals (NYSE:LZM) with an option to increase to 51%, the TZ government holding 16%. Lifezone Metals listed on the NYSE on July 6, 2023.
Lifezone Metals, valued at around $1 billion, owns the Kabanga Nickel mine and refinery project in NW TZ. It has one of the largest undeveloped deposits of high grade nickel, copper and cobalt in the world. A significant amount of drilling has been done with a DFS due to be released next year and mining operations to start in 2026. The project has a second string to its bow which is a proprietary high tech process, Lifezone Hydromet Technology, that will be the basis for refining the products. This is to be built in-country in W TZ which will add full value to the metals which has been a prime aim of African governments.
Magafuli wanted Acacia to invest in a gold refinery to process TZ gold in-country but was told quite rightly no way at the time by Barrick because it would not be economic.
The Kabanga mine was previously owned by Barrick Gold and Glencore until Tanzanian President John Magufuli's administration revoked their retention license in 2018.
Interims next week.
Forget the PR spiel (lies) that will be the cover for the financials.
I expect the company finances to be dire.
Look for:
Cash at 30/6
work out cash burn/month for the 6 months Jan to June. cb/mth. (Estimate EU800+/mth including loan repayments, interest, salaries, overheads)
Take 3 x cb/mth from the cash to arrive at the current cash position for end September.
If this is still positive extrapolate to see how long it will last on the forecast revenue of EU2-3 million for the FY (EU 1 million in H2).
It can be assumed the company has explored all finance options and come up with nothing. This is why there is no mention of how the axe taken to the revenue is to be covered.
Audited accounts will be required for FY results. Can the company survive that long?
Certainly not without massive reductions in overheads, agreement on refi on all borrowings, external funding (unlikely) and another deeply discounted cash raise.
Why does the company itself mention it is endeavouring to drive 'continual operations' if current operations are not start/stop?
"The Company remains actively involved with supporting Italia MDC in its endeavours to drive more productive and continual operations."
It is nothing to do with tweeking operational parameters or the staff needing more time to become familiar with the plant.
The tech is not performing because it doesn't work as designed.
We were told all this in H1 in dozens of posts by the German tech investor who visited Galina and spoke with the staff there. The 'experts' here tried to shout him down but he persisted that he had direct insider information on why the plant was not working. The plant starts then stops. It needs manual intervention. Staff were leaving. The problem may be at the front end ie feed related or it may be with continual operation of the main process. Output may be 50% or less than expected because of constant stoppages.
The U o Lorraine pilot plant runs in batch mode so is no test of continual feed that is required for production.
EQT should provide details of exactly what they are trying to fix, how much capex it will cost and how this impacts on Larissa and North Fork.
Simms. You have been posting ramping rubbish nonsense all day. There is no refinance.
Instead there is a new loan to the MDC to cover huge losses. The tech has had problems from the get go and these issues continue to this day. So production is "not continual" ie it is start/stop. The plant is not operating as it was designed to do and is incurring losses.
Only now after all this time do EQT fess up that there are serious problems which may result in bankruptcy if they also affect Larissa and North Fork and claims are made against the guarantees of performance which similarly are not met.
"the operating company for the Plant, is implementing a series of performance improvements anticipated to be completed in early Q4 2023, at which point, assuming the required performance criteria have been achieved, Italia MDC will draw down the amount of the full Facility."
"The Plant became operational in March 2023 and EQTEC completed handover protocols and transfer of plant operations to Italia MDC in June 2023. The Company remains actively involved with supporting Italia MDC in its endeavours to drive more productive and continual operations."
From ADVFN: Today's RNS headlines:
EQTEC PLC Bank Refinance of Italy Market Development Centre
MetalNRG PLC Bank Refinance of Italy waste to energy plant
Are these not 2 cases of misleading/lying headlines?
We understood there was to be a refi allowing the original investors incl EQT (20%) to take some or all of their capital out and easing their cash flow problems. But we find out in the text that none of this is happening.
Instead the Italia MDC has been offered a loan of EU2.9 million under certain conditions which may or may not be fulfilled in Q4 with Eqtec, the company, getting nothing. How much debt has the MDC racked up already (financed by EQT?) to be included in H1 results and FY results?
It is expected that the loan requirement in Q4 will be EU2.9 million as this full amount is to be drawn down immediately and an EQT bridging loan? repaid. These will be the estimated losses and capex of the Italia MDC to the date of the loan draw down.
Is EQT expecting another cash raise to cover this loan to the MDC in the next 3 months and not telling us as usual with all the other cash raises/loans in the past 18 months or so?
This is yet another MAJOR screw up that has been hidden up to now with only a glimpse of disclosure in this RNS.
1plus1. Thanks for the link to the OreCorp takeover announcement yesterday.
The value of the offer is US $141 million or £110 million. so gives an indication of a similar valuation for Shanta's WK project which has zero value in the sp at present. Silvercorp's bid may be eclipsed by a counter bid. Persius (ASX:PRU) is thought to be interested. Persius is an Auz miner with 3 mines in West Africa, 500k oz pa gold production, a Mkt Cap of US1.5 billion and US$800 million in liquidity. It is looking for African acquisitions and if it doesn't bid for OreCorp could well be interested in Shanta/WK project.
WK drilling results are due soon which will hopefully increase resources to 2 million oz plus and increase it's attraction.
TZ is back in favour, particularly properties in the prolific Lake Victoria greenstone belt invl WK.
West Africa with it's political instability and wars is losing favour for investment to renewed interest in English speaking and British based legal systems with peaceful people of East Africa incl TZ.
Imo at any time Shanta could attract new significant bid interest from multiple parties as it is so undervalued and has such valuable property at WK. The Feasibility Study next year will lay it all out for those willing to wait!