The results are from an infill drilling programme aimed at converting inferred resources to the more certain indicated category. Visible gold was identified in six intersections from seven holes drilled at the deposit.

Isulu deposit

“We have encountered bonanza-grade gold intercepts at Isulu including grades of 721 g/t [grammes a tonne], 210 g/t, 172 g/t, and 93 g/t which are within 100-200 metres vertical distance of surface, in 4 different intersections across the 7 drilled holes. Intersections of that quality, of which we have consistently seen throughout our drilling campaign at West Kenya, is not something that is often seen in the portfolio of a junior miner like Shanta, or indeed any other global gold exploration projects,” said chief executive Eric Zurrin.

“We are extremely excited as a team for what the West Kenya project can deliver to the Shanta portfolio, and with work underway on the updated Mineral Resource Estimate, shareholders can expect a further positive update in the coming months where we expect to see a significant conversion of the inferred resources to indicated ounces,” he added.

Visible gold has now been identified in 67 intersections across 165 holes drilled at Isulu, Bushiangala and Kimingini (Liranda corridor) since January 2021. Assay results for the three remaining holes at Isulu are pending.

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The construction of Singida commenced in late 2020, and will be Shanta’s second operating mine in Tanzania. This operation is set to transform the company into a +100,000 oz/pa producer with a diversified resource base. Singida is in the Ikungi region of Central Tanzania, and the company is said to be investing heavily in the project to ensure it is a success for the region and the local community. The current Life of Mine extends to the end of 2029, based on existing reserves.

“The Singida project continues to progress at a good pace with roughly 70% of the construction activity now finished. We anticipate first gold being poured in Q1, 2023 transforming Shanta into a +100,000 oz gold producer with a diversified asset base. In addition to, the high-grade West Kenya Project continues to drive excitement with the MRE increasing by 31% during the Period to 1.55 Moz.” said Eric Zurrin, Chief Executive Officer of Shanta Gold.

Milling technique

Shanta Mining Company Limited holds 100% of mining licenses ML 456/2012, ML 455/2012, and ML 457/2012, and these Mining Licenses were successfully extended for an additional period of 10 years in January 2022. Mining operations had commenced in September 2021, with ore currently being stockpiled, until it can be processed through the Carbon in Leach plant, which is currently being constructed. Seven open pits are planned to be mined as per the current Life of Mine Plan.

The planned processing methodology is metallurgically simple and conventional involving proven crushing and milling techniques with carbon-in-leach gold extraction planned to deliver robust gold recoveries of 91%. Ore stockpile levels recorded a total of 97,918 tonnes grading 2.11 g/t for 6,647 contained ounces at the end of the period. A total of 114,027 man-hours were worked at Singida in June 2022 resulting in total of 1,037,214 man-hours worked without Lost Time Injury (LTI) for the Period. There were no Medical Treated Injuries (MTI) in the Period which resulted to 0.00 TRIFR for the period and 0.00 TRIFR year to date.

Shanta also boasts of sterling interim results on its other operations in the East Africa region. Revenue has increased from $19.8 m in the first quarter, increasing to $32.1 m in Q2. While the 2021 Final dividend of 0.10 pence per share has been paid in July 2022, with an interim dividend declared of 0.10 pence per share, payable in November 2022.

“Whilst we have to be wary of inflation and its impact on certain unavoidable costs, we remain focused on our operational and capital discipline. As a company, we remain committed to maintaining our strong relationships with the local communities and authorities and operating in a responsible manner. I would like to thank the Shanta employees for their work so far this year. We believe the second half of the year is set to be a bright one for the company and we look forward to updating shareholders in due course,” concluded Zurrin.

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A revenue of $51.9-million was achieved in the first half of the year, with a notable increase in revenue from $19.8-milion in the first quarter to $32.1-million in the second quarter of the year. Gold production totalled 28 947 oz for the six months ended June 30, on par with the prior year’s half-year production of 28 842 oz.

Shanta declared an interim dividend of 0.10p apiece, after posting earnings before interest, taxes, depreciation and amortisation (Ebitda), excluding expenditure on its Singida and West Kenya projects, of $14.1-million in the six months under review. This compares with Ebitda of $17.4-million posted in the six months ended June 30, 2021.

Capital expenditure

The firm also spent $16.5-million in capital expenditure in the reviewing period. Shanta’s asset portfolio includes the New Luika gold mine and Singida project in Tanzania, and the West Kenya project, in Kenya. CEO Eric Zurrin reports that the Singida project development is progressing at a good pace, with 70% of construction having been completed. The company expects the mine to produce its first gold in the first quarter of next year, before ramping up to a 100 000 oz/y operation. In the six months under review, Shanta increased its West Kenya project resources by 31% to 1.55-million ounces contained. Indicated resources have increased by 221% to 378 000 oz, grading 11.7 g/t.

Shanta has $14.3-million of cash and available liquidity on hand. Drilling remains ongoing at the West Kenya project, with up to 75 000 m of drilling planned to be completed in the fourth quarter of the year. The company has started with a feasibility study on the project.

Shanta remains on track to produce between 68 000 oz and 76 000 oz of gold for the current full-year. The company has had to increase its all-in sustaining cost guidance for the year from between $1 050 and $1 250/oz to between $1 150/oz and $1 275/oz, owing to cost inflation influencing inputs such as fuel, emulsion, steel supports and consumables.

Since June, Shanta has entered into a $20-million senior debt facility agreement with Stanbic Bank of Tanzania, of which funds were disbursed on July 15. As a condition to this debt facility agreement, Shanta entered into a zero-cost collar contract over the 12-month period from August this year to July 2023 of 1 333 oz a month, with a floor price of $1 600/oz and ceiling price of $1 950/o

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The Aim-listed company produced 17,527 ounces of gold from its New Luika mine in Tanzania, up from 11,408 ounces in the first quarter and 23% higher than in the second quarter of 2021. Production was 15% higher than planned for the quarter, it noted.

CEO Eric Zurrin highlighted in a production and operational update for the period, published on July 21, that production for the month of June, at 7 538 oz, had been the highest output level achieved by the company in more than 12 months.

Track record

The company owns NLGM and the Singida project, in Tanzania, as well as the West Kenya project in Kenya. Construction at Singida was 63% complete at the end of June and is on track for first gold production in March 2023.

“At New Luika, the initial Crown Pillar mining has been delivered safely resulting in production being up 54% in Q2 vs Q1, which exceeded our internal expectations. Singida will transform Shanta into a +100 000 oz/y producer with a diversified resource base,” said chief executive Eric Zurrin.

He added that the company was also making material inroads at West Kenya, with three drill rigs in operation across the project, following on from the announcement of the high-grade, upgraded mineral resource estimate in the first quarter.

Shanta has also been awarded a maiden mining licence covering the Porcupine South resource area of the Lupa Goldfield, about 22 km from the NLGM processing plant. Zurrin said Shanta had a strong balance sheet, underpinned by its new $20-million senior debt financing with the Stanbic Bank of Tanzania, announced in June, with disbursement completed on July 15. Singida construction is fully funded through to first production.

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The company’s CEO Eric Zurrin hailed that the efforts were unveiled after a successful drilling programme that led to the discovery of 45,359 kilograms (1.6 million ounces). The area of discovery was primarily in the Ramula region in Kakamega County. The gold is estimated to be worth Ksh331 billion from the 45,359 kilograms of deposit unearthed by the firm.

“We are delighted with the transformative drilling results announced at the Ramula target, adding 434k oz grading to 2.08 g/t and increasing total resources at our West Kenya Project by a significant 37 per cent to 1.6 million oz.

“This further strengthens our view that the region is a major new gold district and an area of massive future growth for the Company,” Zurin stated.

Significant resource region

The CEO added that efforts had been put in place in order to expand the Ramula region to become the second significant resource region in Western Kenya.

“In the near term, we are looking forward to updating shareholders on the updated mineral resource estimate at Isulu-Bushiangala as well as the re-estimated historical maiden resource at the Bumbo polymetallic target. The West Kenya Project continues to produce exciting results the more we look, and we are confident that it has the potential to be a multi-million-ounce gold district comparable with other prolific greenstone belts in the world,” Zurin noted.

During the drilling program, the company focuses on seven targets including Ramula, Miruka, Anomaly 22, Ramba-Lumba, Aila, Masumbi and the former colonial mine Kiboko. The entire Ramula region is located approximately 35 kilometres from the Liranda region.

This comes as the company had uncovered 1.31 million ounces of gold deposits in May 2021. The gold is estimated to total Ksh164 billion. The company has dedicated its resources- pouring billions for the completion of the program. Initially, Shanta Gold poured over Ksh1 billion for the exploration of the Ramula region in a bid to uncover more gold.

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The Ramula target adds 434 400 oz of inferred resources to West Kenya’s total resource, which now stands at 1.6-million ounces – a 36% improvement on the previous MRE. The expansion follows a successful drilling programme conducted in 2021, with more updates expected on other targets – Isulu-Bushiangala and Bumbo – in coming months.

Positive outcomes

CEO Eric Zurrin who revealed the report said the West Kenya project continues to produce exciting results and the targets reaffirm the project’s potential to be a multimillion-ounce gold district comparable with other prolific greenstone belts in the world. More expansion drilling is planned for the Ramula region, as are metallurgical testing, infill drilling for conversion to mineable resources and a scoping study.

Shanta has established a solid operational track record which has allowed it to embark on an exciting exploration campaign across its large and highly prospective licence areas. This exploration programme is targeting new resources to extend the mine life of New Luika as well as increasing resources at Singida project in central Tanzania.

The New Luika Gold Mine (100% owned) is a low cost, established, cash generative operation boasting high grade resources rarely found around the world. Shanta is focused on delivering maximised sustainable value for shareholders from this mine, and other assets in its portfolio, through meticulous expert management throughout the business.

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