SHG.L Regulatory News (SHG)

13 Jul 2006 15:05

Shanta Gold Limited13 July 2006 Interim Report Shanta Gold announces results for the 6 months to 30 June 2006 Shanta Gold Limited ("Shanta Gold" or the "Company") is pleased to present theinterim report for the six months to 30 June 2006. Following the exploration success at Singida, the Board has considered itprudent to re-establish an executive presence and Richard Shead (CEO) and WalterVorwerk (CFO) were appointed with effect from 1 June 2006. At the same time,George Bennett resigned from the Board. Exploration Report Shanta Gold maintained its focus on extending the evaluation of the Singidaproperty, while limited activity took place at the Mgusu project. 1. Singida Project Londoni 1 Target Shanta Gold's exploration activities during this period have largely focused onthe Singida project with the drill testing of a large gold geochemical anomalydiscovered in a new unexplored greenstone belt in central Tanzania during 2005.Detailed announcements of drilling results were made in February, May and Juneand may be found on the Shanta Gold website (www.shantagold.com). A total of3,630 metres of rotary air blast drilling ("RAB"), 21,700 metres of reversecirculation drilling (RC) and 670 metres of diamond drilling has been completedat four targets along a 5,300 metre strike. Some 10,600 samples have beenassayed for gold, arsenic and base metals at SGS laboratories in Mwanza,Tanzania. Gold was intersected at all four targets and the feature of the period was theintersection of high grade mineralization at two targets in a 600 metre strikesection referred to as the "Gold Tree" and "The Jem". Highlights at the "Gold Tree" are intersections averaging 16 metres at 5.24 g/tAu in SC12, 10 metres at 7.70 g/t Au in SC64, 10 metres at 8.49 g/t Au in SC70and 2 metres at 145.36 g/t Au (including 1 metre at 280 g/t Au) in SC110. Thedrilling to date has confirmed the mineralised shear zone is robust along a 350metre strike down to 200 metres depth. It remains open along strike and down dipwhere step-out exploration drilling is in progress. The highlights of the drilling at "The Jem" along a 425 metre strike is a 5metre intersection averaging 23.90 g/t Au (including 1 metre at 79.38 g/t) inSC43, 7 metres at 21.19 g/t (including 3 metres at 46.36 g/t) in SC115, 3 metresaveraging 65.35 g/t in SC206, and 4.05 metres at 10.18 g/t in diamond drill holeSD207. The mineralised quartz veins in both areas are hosted within a strongly shearedand highly altered basaltic volcanic sequence which contains medium grainedgabbro intrusives. Metamorphic grade occurs in transition from the uppergreenschist to the lower amphibolite facies. Visible gold and bonanza gradesoccur in the strongly sheared margins of quartz-sulphide veins with a broad zoneof mineralization extending into the footwall rocks. Mineralogical examination of the RC chips by Australian mineral consultants,Mason Geoscience Pty Ltd, has shown that native gold is intergrown with quartzveins and with zoisite in altered wallrocks. No gold has been observed inarsenopyrite, suggesting that recoveries should not be problematic. Preliminarymetallurgical testing is still to be undertaken on mineralised drill coresamples. The preliminary open pit mineral resources are being independently modelled byJohannesburg based independent consultants Mineral Corporation. Insufficientdata is available for the assessment of JORC or SAMREC compliant resourceassessments at this stage. Infill and step out drilling continues to generateadditional data points for assessment. Mineral Corporation will be providing thecompany with an independent JORC compliant resource statement shortly. Londoni 2 Target Detailed geological mapping and infill soil sampling has been completed atLondoni 2 situated approximately 6 km east of the Londoni 1 target. Thegeochemical sampling programme located a high grade mineralised vein at surfaceextending along a 500 metre strike length. The reconnaissance chip sampling of apoorly exposed mylonitic quartz-sulphide vein returned with bonanza grades of280 g/t Au with adjacent sheared mafic wallrocks containing values of 10 g/t Au.A first phase RC drill programme is planned to commence in this area shortly.Further geochemical sampling is in progress to define the full extent of thisnew discovery. Londoni 3 Target Shanta Gold has secured the exploration rights on 27 primary mining leases overand along the strike projections from high grade gold mineralization at theLondoni 3 target. Surface and underground sampling of sub-vertically dippingquartz veins and sheared mafic volcanic rocks in artisanal workings returnedwith gold values between 8g/t and 15g/t over several metres width. A preliminaryreverse circulation drill programme is planned in conjunction with detailedgeological mapping and soil geochemical sampling along the projected strikeextensions. Shanta is also planning to complete a detailed airborne magneticsurvey over and along strike from all of the three main Londoni targets inAugust. Miscellaneous A dry weather airstrip (1,800 metres long) has recently been constructed tofacilitate the transport of equipment, supplies and staff into this remote partof Tanzania. The exploration camp has been upgraded with the construction of alarger office and sample storage facilities. Community Involvement The Company has assisted financially with the upgrading of facilities at theShanta Secondary School at Mang'onyi village. Shanta Gold has provided buildingmaterials for the construction of new classrooms and has equipped these with newdesks for students. The company has also drilled water boreholes to supply localvillagers with clean drinking water. 2. Other Projects Activity at the Mgusu Project has been restricted to the construction of accessroutes and drill platforms for the planned 3,600 metre RC and 2,400 metrediamond drill programme. The resource definition and expansion programme will becompleted as soon as a rig is available from the Singida Project. First phase reconnaissance exploration programmes are expected to commence inthese areas in the second half of 2006. Financial report During May and June 2006, 7.4 million warrants were exercised and shares issuedraising US$4 million in additional funds. The total number of shares in issue isnow 69,698,128 (62,224,735 at 31 December 2005). Due to the intensified exploration in the Singida Area, significant drillingcosts amounting to US$907,000 are included in exploration expenditure ofUS$1,599,000. The Company has also spent US$776,000 on obtaining the rights toexplore additional primary mining licence areas in the Singida area, reflectedin the increase in the intangible assets item in the balance sheet, and hasincurred capital expenditure of US$182,000 to support exploration activities. At 30 June 2006 the Company had US$5,464,000 free cash available for furtherexploration activities. Financial Results Consolidated results for the Company have been prepared based on InternationalFinancial Reporting Standards (IFRS). INCOME STATEMENT 6 months to 6 months to Period to 31 30 June 2006 30 June 2005 December 2005Notes US$000 US$000 US$000Investment and operating income (287) - 137Exploration costs (1,599) (14) (1,533)Administrative expenses (571) (28) (710)Share option costs (227) - (422)Net loss for the period (2,684) (42) (2,528) Loss per share basic (US cents) 1 4.23 0.52 5.18Loss per share diluted(US cents) 2 3.12 0.52 5.17 BALANCE SHEET At At At 31 December 2005 30 June 2006 30 June 2005 US$000 US$000 US$000AssetsNon current assets Intangible assets 1,312 1,281 671Property, plant and equipment 270 134 152Goodwill 3,318 3,425 3,318 4,900 4,840 4,141Current assetsReceivables 158 101 121Cash and cash equivalents 6,864 - 5,301 7,022 101 5,422Total assets 11,922 4,941 9,563 Equity and liabilitiesEquityShare capital and premium 14,384 4,758 10,020Share option reserve 649 - 422Warrant reserve 305 - 672Translation reserve 396 - 119Accumulated loss (5,212) (42) (2,528) 10,522 4,716 8,705 Non current liabilitiesLoans from related parties 508 147 508Current liabilitiesOther creditors and accruals 892 78 350Total equity and liabilities 11,922 4,941 9,563 CASH FLOW STATEMENT Period to 6 months to 6 months to 31 December 30 June 2006 30 June 2005 2005 US$000 US$000 US$000Cash outflow from operations (1,476) (25) (745) Cash flows from investing activities (958) (5) (112)(net) Cash flows from financing activities 3,997 20 6,158(net) Increase/decrease) in cash 1,563 - 5,301 Cash and equivalents at the beginning of 5,301 - -the period Cash and equivalents at the end of the 6,864 - 5,301period STATEMENT OF CHANGES IN EQUITY For the periods to 30 June 2006 Share Share Share Warrant Translation Accumulated Capital Premium Options Reserve Reserve Loss TOTAL US$000 US$000 US$000 US$000 US$000 US$000 US$000Balance on - - - - - -incorporation Shares issued 8 4,910 4,918 Shares issue expenses (160) (160) Loss for the period (42) (42) Total capital and 8 4,750 (42) 4,716reservesat 30 June 2005 Shares issued 3 7,589 7,592 Shares issue expenses (2 ,330) (2,330) Share option costs 422 422 Warrant costs 672 672 Translation on 119 119consolidation Loss for the period (2,486) (2,486) Total capital and 11 10,009 422 672 119 (2528) 8,705reservesat 31 December 2005 Shares issued 1 4,001 4,002 Shares issue expenses (5) (5) Share option costs 227 227 Warrants exercised 367 (367) - Translation on 277 277consolidation Loss for the period (2,684) (2,684) Total capital and 12 14,372 649 305 396 (5,212) 10,522reservesat 31 December 2005 Notes Calculated on the loss for the period divided by the weighted average number ofshares in issue (63,463,419) Calculated on the loss for the period divided by the weighted average fullydiluted number of shares in issue (84,119,479) For further information: Shanta GoldRichard Shead:Mobile: +27 (0) 82 654 1821 Walter VorwerkMobile: +27 (0) 83 308 0080 This information is provided by RNS The company news service from the London Stock Exchange