Completion of Drilling Programme at New Luika Mine

RNS Number : 1163D

Shanta Gold Limited

11 May 2012

 



 11 May 2012

Shanta Gold Limited

("Shanta Gold" or the "Company")

Completion of Drilling Programme at New Luika Gold Mine

Shanta Gold (AIM: SHG), the near-term gold producer with operations in Tanzania, is pleased to announce final assay results following the completion of the upgrade drilling campaign at its flagship project, the New Luika Gold Mine ("New Luika"), located in the Lupa gold region. The previous New Luika resource of 9.7 million tonnes with an average grade of 3.12g/t containing 974,153 ounces (1.0g/t cut-off) was announced in May 2011. Today's assay results follow on from the highly prospective initial drilling results announced 30 January 2012, which will be incorporated into an enlarged resource for New Luika during Q2 2012. The drilling campaign focussed on the optimisation of New Luika's main ore deposits, Bauhinia Creek and Luika, which form the first two of the 13 open pits which, subject to drilling results, will feed the central processing plant.

Highlights:

·      Bauhinia Creek latest assay results from its upgrade drilling programme include:

o  CSR340 - 10m at 18.26g/t, 130-140m below surface

o  CSR341 - 10m at 3.8g/t, 160-170m below surface

o  CSR342 - 5m at 3.21g/t, 200-210m below surface

·        Additional strike expression of mineralisation at depth has been proved. The strike extent of the Bauhinia Creek mineralised body has increased to approximately 500m

·        The increase in both depth and strike expression will be incorporated into a forthcoming resource update due during Q2 2012, which is expected to result in a new pit design that will exploit high grade ore to a depth substantially deeper than the current planned 120m vertical depth

·        Luika latest assay results from its upgrade drilling programme include:

o  CSR348 - 11m at 5.24g/t, 120-130m below surface

o  CSR349 - 6m at 9.02g/t, 160-165m below surface

o  CSR350 - 9m at 9.94g/t, 130-140m below surface

o  CSR356 - 10m at 4.04g/t, 145-155m below surface

·       The New Luika construction project remains on target for first gold production in Q3 2012

Gareth Taylor, Chief Executive Officer, commented;

"These significant results are very encouraging and further support the expectations that the current conceptual pit shells at Bauhinia Creek and Luika will be enlarged. We look forward to the completion of an updated resource statement during Q2 2012 which should be positively influenced by these results as the mineable resources increase and are re-categorised. The results will also provide further clarity on the depths at which mining can take place at both the Bauhinia Creek and Luika open pits."

Bauhinia Creek Deposit

The drilling programme was commissioned to clearly identify the down-dip extensions of the ore bodies delineated during earlier phases of drilling. Today's results complete the raw data from the completed Bauhinia Creek upgrade drilling programme, and supplement the results indicated below, which were previously released to the shareholders on 30 January 2012.

·           Borehole CSR332 - 10m at 26.9g/t, 80-100m below surface *

·           Borehole CSR324 - 11m at 21.71g/t, 100-120m below surface *

·           Borehole CSR325 - 31m at 12.97g/t in total, including 14m at 18.49g/t, 100-20m below surface*

·           Borehole CSR338 - 14m at 11.6g/t, 120-150m below surface*

·           Borehole CSR330 - 13m at 8.19g/t in total, 150 - 200m below surface*

·           Borehole CSR331 - 6m at 11.93g/t  and 8m at 13.24g/t in total, 150 - 200m below surface*.

*as announced on 30 January 2012

The latest results from Bauhinia Creek are summarised in Table 1.

Luika Deposit

The upgrade drilling campaign at the Luika deposit, located approximately 400m northwest of Bauhinia Creek, was undertaken to investigate the continuity of mineralisation at depth.  Current provisional pit designs at the Luika deposit do not include any inferred resources, and are limited to a vertical depth of approximately 130m. The mineralisation at Luika is known to occur in a laterally continuous structurally deformed horizon characterised by alternating low grade and high grade zones. The "payshoots" were identified and mapped by early colonial miners when the Luika deposit was exploited as an underground mine pre-1960.

Despite intersecting moderate gold grades in some of the latest drill holes the Company is satisfied that the continuity of payshoots at depth has been delineated during the latest drilling campaign. A comprehensive summary of drilled intersections achieved appears in Table 2.

Strike expression of the Luika mineralised body is currently approaching 700m, with continuity of mineralisation proven down to approximately 175m vertical depth. It is envisaged that optimisation of newly received data may result in the enlarging of the conceptual Luika pit shell, such that ore located below 130m vertical may be exploited.

Data derived from the upgrade drilling campaign is being integrated into the superseding geological database with the view to publish an updated resource statement in the foreseeable future.

Luika Slope Scree Gravel Material

In addition to mining the Bauhinia Creek open pit, Shanta Gold is currently focussing on the stripping of slope scree gravels that fall within the footprint of a conceptual Luika pit. The Company is screening and stockpiling the +10mm gravel material at the New Luika plant site. Although this material does not form part of the Company's resources as currently stated, the +10mm gravel fraction has been sampled and found to be gold bearing. It is envisaged that this material will be used during the commissioning phase of the start-up operations.

Project Update

Construction of the New Luika plant is ongoing and first gold production remains on target for Q3 2012.  A detailed announcement on the project progress will be released to the market in due course.

Table 1: Bauhinia Creek drill intersections and assay results

BHID	FROM	TO	SAMPLE NO	AU GRADE	INTERSECTION WIDTH	COMPOSITE GRADE
CSR339	185	186	177684	32.80	1	32.80
CSR340	132	133	327059	2.20	10	18.26
	133	134	327060	45.35
	134	135	327062	3.35
	135	136	327063	43.90
	136	137	327064	9.93
	137	138	327065	6.33
	138	139	327066	24.3
	139	140	327067	31.10
	140	141	327068	15.70
	141	142	327069	0.45
CSR341	161	162	327104	0.44	10	3.80
	162	163	327105	0.97
	163	164	327107	1.92
	164	165	327108	3.97
	165	166	327109	4.15
	166	167	327110	3.38
	167	168	327111	4.58
	168	169	327112	1.02
	169	170	327113	17.20
	170	171	327114	0.41
CSR342	205	206	327212	2.53	5	3.21
	206	207	327213	5.33
	207	208	327214	3.07
	208	209	327215	4.34
	209	210	327216	0.80
CSR343	33	34	327253	0.90	4	1.00
	34	35	327254	0.17
	35	36	327255	1.18
	36	37	327256	1.75
AND
CSR343	73	74	327297	1.81	3	0.99
	74	75	327298	0.59
	75	76	327299	0.57
AND
CSR343	195	196	327430	2.95	4	1.52
	196	197	327431	1.74
	197	198	327432	0.74
	198	199	327433	0.66

Table 2: Luika upgrade drilling intersections

BHID	FROM	TO	SAMPLE NO	AU GRADE	INTERSECTION WIDTH	COMPOSITE GRADE
CSR344	92	93	327519	10.02	1	10.02
CSR345	148	149	327624	1.05	1	1.05
CSR346	133	134	327774	1.21	10	0.96
	134	135	327775	0.46
	135	136	327776	0.86
	136	137	327777	1.21
	137	138	327779	0.51
	138	139	327780	0.51
	139	140	327781	0.06
	140	141	327782	0.68
	141	142	327783	2.73
	142	143	327785	1.33
CSR347	55	56	327862	1.19	1	1.19
AND
CSR347	121	122	327935	5.91	1	1.19
AND
CSR347	173	174	327990	5.83	10	1.90
	174	175	327992	3.91
	175	176	327993	1.35
	176	177	327994	0.35
	177	178	327995	0.15
	178	179	327996	0.45
	179	180	327998	1.38
	180	181	327999	1.24
	181	182	328000	1.24
	182	183	328001	3.07
CSR348	91	92	328121	2.42	1	2.42
AND
CSR348	130	131	328163	0.76	11	5.24
	131	132	328164	1.99
	132	133	328165	0.05
	133	134	328166	0.03
	134	135	328167	19.7
	135	136	328168	3.00
	136	137	328169	1.23
	137	138	328171	5.80
	138	139	328172	13.50
	139	140	328173	11.25
	140	141	328174	0.32
BHID	FROM	TO	SAMPLE NO	AU GRADE	INTERSECTION WIDTH	COMPOSITE GRADE
CSR349	20	21	328217	1.59	2	1.50
	21	22	328218	1.41
AND
CSR349	180	181	328392	32.50	6	9.02
	181	182	328393	10.71
	182	183	328394	5.25
	183	184	328395	3.60
	184	185	328396	1.13
	185	186	328397	0.95
CSR350	147	148	328575	0.69	9	9.94
	148	149	328576	76.95
	149	150	328577	4.98
	150	151	328578	0.79
	151	152	328579	0.96
	152	153	328580	2.04
	153	154	328581	1.63
	154	155	328582	0.75
	155	156	328583	0.72
CSR351	127	128	328718	1.3	1	1.30
AND
CSR351	141	142	328733	5.09	2	2.82
	142	143	328734	0.55
CSR352	157	158	328789	0.57	3	1.34
	158	159	328791	2.47
	159	160	328792	0.97
AND
CSR352	171	172	328805	0.79	2	1.34
	172	173	328806	1.89
CSR353	83	84	328895	0.82	3	0.80
	84	85	328896	0.85
	85	86	328897	0.74
AND
CSR353	108	109	328923	2.49	1	2.49
CSR354	188	189	329031	0.92	2	1.26
	189	190	329032	1.605
CSR355	147	148	329115	0.81	2	2.50
	148	149	329116	4.18
AND
CSR355	196	197	329169	5.74	2	4.47
	197	198	329170	3.19
BHID	FROM	TO	SAMPLE NO	AU GRADE	INTERSECTION WIDTH	COMPOSITE GRADE
CSR356	168	169	329235	0.85	10	4.04
	169	170	329236	3.48
	170	171	329237	0.78
	171	172	329238	10.81
	172	173	329239	5.55
	173	174	329241	1.89
	174	175	329242	3.64
	175	176	329243	7.04
	176	177	329244	4.59
	177	178	329245	1.80
CSR357	112	113	329346	2.08	9	3.87
	113	114	329347	1.22
	114	115	329348	0.59
	115	116	329349	2.57
	116	117	329350	1.80
	117	118	329351	16.00
	118	119	329352	1.25
	119	120	329353	7.80
	120	121	329354	1.50
CSR358	168	169	329411	0.62	5	3.44
	169	170	329412	8.01
	170	171	329413	5.04
	171	172	329414	2.85
	172	173	329415	0.67
CSR359	50	51	329467	1.59	1	1.59
AND
CSR359	159	160	329586	1.71	4	5.17
	160	161	329587	13.00
	161	162	329588	5.68
	162	163	329589	0.30
CSR361	115	116	329799	0.86	2	1.13
	116	117	329800	1.40
AND
CSR361	120	121	329804	1.62	1	1.62
AND
CSR361	205	206	329897	1.27	4	1.49
	206	207	329898	3.08
	207	208	329899	1.02
	208	209	329901	0.6
CSR362	69	70	329937	2.265	1	2.27
BHID	FROM	TO	SAMPLE NO	AU GRADE	INTERSECTION WIDTH	COMPOSITE GRADE
CSR3631	100	101	330189	0.31	30	0.47
	101	102	330190	0.99
	102	103	330192	0.73
	103	104	330193	0.46
	104	105	330194	1.7
	105	106	330195	0.83
	106	107	330196	0.4
	107	108	330198	0.745
	108	109	330199	0.05
	109	110	330200	0.04
	110	111	330201	0.21
	111	112	330202	0.57
	112	113	330203	0.15
	113	114	330204	0.48
	114	115	330205	0.29
	115	116	330206	0.27
	116	117	330207	0.36
	117	118	330208	0.15
	118	119	330209	0.16
	119	120	330210	0.56
	120	121	330211	0.48
	121	122	330212	0.295
	122	123	330213	0.08
	123	124	330214	0.45
	124	125	330215	0.21
	125	126	330216	0.21
	126	127	330217	1.14
	127	128	330218	0.48
	128	129	330219	0.37
	129	130	330220	0.78

¹CSR363 - Interpreted to represent drilling sub-parallel to localised faulted zone responsible for slight displacement of the Luika mineralised ore zone.

Qualified Person

Braam (J.A.C.) Jankowitz, M.Sc., Pr.Nat.Sci. (400127/93), Shanta's Technical Services Manager is a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies, June 2009, of the London Stock Exchange, and has reviewed and approved the technical information contained in this announcement.

Enquiries:

Shanta Gold Limited	Tel: [phone]
Walton Imrie / Gareth Taylor
Nominated Adviser and Broker
Liberum Capital Limited	Tel: + 44 (0)20 3100 2000
Michael Rawlinson / Clayton Bush / Christopher Kololian
Public Relations UK
Tavistock Communications	Tel: [phone]
Emily Fenton / Ed Portman
Public Relations SA	Tel: + 27 11 880 3924
Russell & Associates
Charmane Russell / Marion Brower / Pam Wolstenholme

About Shanta Gold Limited

Shanta Gold is a Tanzania focussed gold explorer and mine developer. It currently has defined ore resources on the New Luika, Singida and Mgusu projects and holds exploration licences over a number of additional properties. The New Luika Gold Mine is currently under construction and is expecting first production in 2012. The Company is admitted to trading on AIM and has approximately 319 million shares in issue.

For further information visit the Company's website: www.shantagold.com.

 

END

 

 

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