New Luika Gold Mine Resource Update

RNS Number : 7540I

Shanta Gold Limited

30 July 2012

 



30 July 2012

Shanta Gold Limited

("Shanta Gold" or the "Company")

Significant Resource Increase at New Luika Gold Mine

Shanta Gold, the East Africa focused near term gold production & exploration company, is pleased to announce an updated JORC compliant Mineral Resource estimate, complied by Geologix Mineral Resource Consultants (Pty) Ltd, for its New Luika Gold Mine ("New Luika") in south western Tanzania. 

Highlights:

·      Total in-situ New Luika resources increased by 52% to 1.48Moz Au with an average grade of 3.22 g/t (1.0 g/t cut-off)

·      New Luika Indicated resources increased by 80% to 0.83Moz Au with an average grade of  3.87 g/t (1.0 g/t cut-off)

·      All nine gold deposits identified at New Luika remain open at depth demonstrating potential for further resource upside

·     Revised New Luika mining plan to be undertaken reflecting the significant increase in total resource

Table 1: July 2012 New Luika In-Situ Resource

	Indicated			Inferred			Total
Cut-off	Tonnes	Grade	Oz	Tonnes	Grade	Oz	Tonnes	Grade	Oz
0.0	11 692 319	2.39	889 658	17 015 817	1.47	805 548	28 780 617	1.85	1 703 673
0.5	8 584 945	3.16	871 888	12 777 468	1.86	765 126	21 434 893	2.39	1 645 482
1.0	6 642 315	3.87	827 133	7 630 967	2.64	648 905	14 341 191	3.22	1 484 390

* In addition to the above, the 2012 Resource Assessment has identified 8,351 ounces with an average grade of 3.82 g/t (1.0 g/t cut-off) in the Measured category

Walton Imrie, Executive Chairman, commented: "This impressive increase in our resource at New Luika, containing as it does an 80% increase in Indicated category resources, confirms the Board's view of the quality of this project as well as validates its decision to concentrate investment and development in this area of Tanzania. With the production facilities nearly complete and our first gold pour on target for mid-Q3 2012, these are exciting times for Shanta Gold. The coming months will see us further develop our mining plan at New Luika as well as transition from a junior developer to an emerging gold producer".

Highlights from the Resource Assessment Report

After publishing the last resource assessment in May 2011, Shanta Gold continued with exploration and infill drilling at five of the nine known gold deposits located in New Luika Gold Mine. The focus was on the Luika and Bauhinia Creek deposits where both infill drilling and resource upgrade drilling was done to achieve on-strike and down-dip extensions to mineralised envelopes earlier identified. The Jamhuri, Black Tree Hill and Shamba deposits were also targeted with limited infill drilling to improve delineation of the respective ore bodies, which have so far resulted in insignificant resource adjustments. However, the Company is satisfied that the definition of mineralised envelopes achieved at these three deposits will greatly assist with improving scheduling capacity once these deposits are exploited. The increase in resources at New Luika therefore arises overwhelmingly from upgrades at the Bauhinia Creek and Luika deposits which together account for two thirds of the total in-situ resource at New Luika.

Bauhinia Creek Deposit

Spectacular drill intersections achieved at the company's Bauhinia Creek deposit (currently being exploited by means of opencast mining) have resulted in a significantly positive impact on all aspects of current and future mining activities at New Luika. The in-situ resource at Bauhinia Creek has increased to 692Koz at 5.35 g/t (1g/t grade cut-off applied). This represents an improvement of 142% in total contained gold. Mineralised intersections in drill-holes at Bauhinia Creek were achieved to a vertical depth of 200m, resulting in an increase in Indicated category resources of 244% (1 g/t grade cut-off applied). The current Indicated resource at Bauhinia Creek amounts to 429Koz at 7.42 g/t, up from 125Koz ounces at 5.93 g/t in the May 2011 Resource Assessment (1 g/t grade cut-off applied). Bauhinia Creek accounts for more than half of the total Indicated category resources at New Luika of 827,133 ounces of gold at 3.87g/t (1g/t grade cut-off applied).

Table 2: Bauhinia Creek Deposit - July 2012 In-situ Resource

	Indicated			Inferred			Total
Cut-off	Tonnes	Grade	Oz	Tonnes	Grade	Oz	Tonnes	Grade	Oz
0.0	1 897 439	7.06	430 838	2 607 458	3.16	264 806	4 577 378	4.78	704 112
0.5	1 864 863	7.18	430 450	2 505 804	3.27	263 698	4 443 149	4.92	702 616
1.0	1 796 936	7.42	428 843	2 162 233	3.67	254 970	4 027 080	5.35	692 164

Please note: Minor ounce and tonnage discrepancy is due to Measured category ounces of 8,351 ounces at 3.82 g/t at 1 g/t grade cut-off

Luika Deposit

At the Luika deposit, mineralised down-dip intersections were achieved to a vertical depth of up to 185m. Earlier drilling programmes targeted the orebody to a maximum vertical depth of approximately 150m. Robust mineralised envelopes intersected at depth have resulted in a significant increase of the Luika in-situ resource. The in-situ resource at Luika has increased to 445Koz at 3.01 g/t (1 g/t grade cut-off), which represents an improvement of 27% in total contained gold. Additional infill and upgrade drilling at the Luika deposit has resulted in an increase in Indicated category resources of 36% (1 g/t grade cut-off applied). The current Indicated resource at Luika amounts to 204Koz at 3.13 g/t, from 150Koz at 3.64g/t in the May 2011 Resource Assessment (1 g/t grade cut-off applied).

Table 3: Luika Deposit - July 2012 In-Situ Resource

	Indicated			Inferred			Total
Cut-off	Tonnes	Grade	Oz	Tonnes	Grade	Oz	Tonnes	Grade	Oz
0.0	2 073 252	3.07	204 884	2 628 957	2.87	242 678	4 702 209	2.96	447 562
0.5	2 073 252	3.07	204 884	2 625 853	2.87	242 642	4 699 105	2.96	447 527
1.0	2 024 559	3.13	203 608	2 577 038	2.91	241 317	4 601 598	3.01	444 924

The significant increases in the Indicated category resources at both the Luika and Bauhinia Creek deposits will result in the commissioning of studies aimed at the optimisation and re-design of pit shells. It is expected that both Bauhinia Creek and Luika pit designs will be enlarged significantly to include the additional Indicated category resources identified.

New Luika Project Update

Based on the updated Mineral Resource Assessment, the Company is currently optimising the New Luika mine plan and expects this to be completed in Q4 2012.

The Company is also pleased to confirm that commissioning at New Luika remains on track with first gold production expected middle of this quarter and that the Company remains fully funded through the ramp up period into production.

The information in the report to which this statement is attached that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr David Briggs who is a member of the South African Council for Natural Scientific Professions (SACNASP), a Recognised Overseas Professional Organisation ('ROPO') included in a list promulgated by the ASX from time to time. Mr Briggs is a director of Geologix Mineral Resource Consultants (Pty) Ltd and is an independent consultant to Shanta Gold Ltd. Mr Briggs has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Briggs consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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
Financial Public Relations
FTI Consulting	Tel: [phone]
Billy Clegg / Oliver Winters

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 Q3 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.

 

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