Shanta Gold reduces debt to US$1.4mln on early repayment of Exim loan facility

0
33

Shanta Gold Ltd’s (LON:SHG) gross debt of US$11.1mln (£8.0mln) has been reduced to US$1.4mln following the repurchase of all outstanding convertible loan notes and early repayment of an Exim loan facility, the East Africa-focused gold producer said in a first-quarter update.

“Following the announcement of our maiden dividend in March, we remain committed to enhancing our robust fundamentals to protect long-term sustainable returns,” said chief executive Eric Zurrin. “Reducing our debt is a key part of that strategy. The early repayment of the Exim loan facility and the repurchasing of all outstanding convertible loan notes demonstrates our financial discipline and further strengthens our balance sheet.”

The AIM-quoted company said it produced 14,641 ounces of gold in the first quarter, down from 20,167 ounces in the year-earlier period. It expects output to increase throughout the year with the first half delivering 45% of production as previously guided and reiterated its 2021 guidance of approximately 80,000 ounces.

Ongoing ramp-up of the new third mill at its New Luika mine, its only operating mine, is targeting monthly throughput of 2,300 tonnes per day during the third quarter of 2021, an increase of 18% compared with daily throughput in 2020.

Underlying profits (EBITDA) fell to US$7.6mln, from US$15.0mln in the first quarter of 2020, as cash costs per ounce rose. Its All In Sustaining Costs (AISC) were higher than 2021 annual guidance, in part due to the increase in quarterly gold production forecast for the remainder of the year.

In addition to the New Luika gold mine, Shanta also has the Singida project in Tanzania and the West Kenya project.

“Beyond the income opportunity for shareholders and the steady gold production at New Luika, our exploration programme continues to unlock further capital growth within the portfolio,” said Zurrin.

“We are seeing encouraging drilling results across all three of our assets having completed 19% of the drilling programme so far this year which has already unlocked an additional 76,461 oz of new indicated resources at Luika.”

READ: Shanta boosted by exploration success at New Luika and West Kenya

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here