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Shanta Gold ahead of both cost and production targets

Published: 03:01 19 Jan 2017 EST

picture of gold being poured
Records are being broken regularly at New Luika

Shanta Gold Ltd (LON:SHG) beat its targets for both the amount of gold it produced and the costs of extracting it in 2016.

Output from the New Luika mine in 2016 totalled 87,713oz, which was a record for the Tanzania-based junior and compared to the top end of guidance of 87,000oz.

All-in-costs for the year were US$661/oz against guidance of US$690-740 /oz, which had already been reduced from US$750 - US$800/ oz at the start of the year.

Sales for the year were a little less than the amount produced at an average price of US$1,232.

Shanta has also sold 21,000 oz at an average price of US$1,318 /oz from January to August 2017.

The miner is carrying out a major underground development at New Luika and first development ore was delivered in December on schedule it said.

Underground ore production is due to start in the second quarter of 2017.

Feasibility studies area also underway at the Ilunga deposit as a possible new high grade underground satellite operation.

Pilot mining is also scheduled to start at another project, Singida, in the second quarter.

Shanta said that due to the transition underground, production will be weighted towards the second half of the year as it will need to process lower grade ore first.

Toby Bradbury, chief executive said  that beating full year guidance on both cost and volume was a fantastic accomplishment.

He added the underground project is significantly de-risked with initial access already developed within the Bauhinia Creek orebody.

High grade ore production from underground operations is scheduled to start within six months.

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