logo-loader

UPDATE - Shanta Gold looks to develop exploration in prospective Lupa Goldfields

Published: 04:02 15 Apr 2013 EDT

no_picture_pai
--Adds broker comment--

The acquisition of the outstanding 20% stake in the Lupa Goldfields is a fantastic deal for Shanta Gold, believes broker Liberum.

Shanta has bought Red Kite's interest in the Great Basin Gold joint venture, which covers a dominant portion of the Lupa fields, meaning it now owns 100% of the rights to the licences in this exciting prospecting area.

In effect, said Liberum, Shanta has the entire highly prospective Lupa Goldfields under licence while removing the minimum spend requirement and dilution on resource discovery.

Gold firm Shanta added that stabilising production at the New Luika mine in Tanzania is a major aim in 2013.
Another is to assess the potential for extending the life of the mine, as well as exploring for further opportunities in the highly prospective Lupa Goldfields.

The company is also looking to upgrade the Singida definitive engineering study of 2011 to bankable feasibility study (BFS) and strengthen its balance sheet.

The New Luika mine in Tanzania produced slightly less than 6,000 ounces of gold in the final quarter of last year and is targeting 70,000 ounces plus in 2013.

Chairman Walton Imrie said 2012 had been a "transitional" year for the company. "I believe New Luika will prove to be the cornerstone mining and processing operation for a successful gold producing company," he said.

For the year to end December 2012, the firm posted a loss before tax of US$14.7mln (2011: US$12.2mln).
Broker Liberum said the results reflect the ramp up of the New Luika mine with both revenue and costs capitalised. 
Looking ahead, 2013 production is broadly on track and the preliminary 5yr plan now envisages life of mine average production of 90koz - 50% higher than previous expectations.

Liberum has a ‘buy stance’ and increased its target price to 35p.

Morning Report: Touchstone Exploration reports significant discovery at...

Headlines from the Proactive UK newsroom. Touchstone Exploration (LON:TXP) has made what it says is a significant crude oil discovery on the Ortoire exploration block, onshore Trinidad. Logs from the Cascadura-1 well indicate 1,037 feet of oil pay, which far exceeds pre-drill expectations...

on 16/12/19