Successful Wet Commissioning of New Luika Plant

RNS Number : 8274F

Shanta Gold Limited

21 June 2012

 



21 June 2012

Shanta Gold Limited

("Shanta Gold" or the "Company")

Successful Wet Commissioning of the New Luika Plant

Shanta Gold (AIM: SHG), the near-term gold producer with operations in Tanzania, is pleased to provide an update on mining and construction activities at its first producing gold mine in the Lupa gold region of the country, the New Luika Gold Mine ("New Luika").

Highlights:

§ Plant wet commissioning certificate awarded by plant design and engineering firm;

§ Remaining US$2.5m tranche of US$15m FBN Bank facility approved post-wet commissioning;

§ Hot commissioning to commence imminently;

§ First gold production expected by mid-Q3, followed by cash receipts by the end of Q3;

§ Current ore and gravels stockpiles estimated to contain over 22,000 ounces of gold;

§ Q4 2012 production guidance of approximately 13,000 - 17,500 ounces of gold.

Shanta Gold Executive Chairman Walton Imrie said today: 

"The New Luika Gold Mine is on the verge of completion in all respects with first gold production on schedule for mid-Q3. The hot commissioning of the New Luika plant and commencement of gold production will mark a new chapter in Shanta Gold's history as we evolve from developer to producer. This historic milestone is a testament to the hard work of the management and operational teams who have worked tirelessly to deliver Shanta Gold's first producing gold mine."

New Luika Plant Commissioning

The Company has successfully completed wet commissioning of the plant and has received the wet commissioning certificate from DRA providing third party confirmation. The successful wet commissioning satisfies the final condition for the receipt of the remaining US$2.5m of the US$15m FBN Bank facility, which has now been approved by FBN Bank. The on-site laboratory has been fully commissioned allowing for the quick turnaround of assay samples for grade and metallurgical controls.  Hot commissioning of the plant will commence imminently, which will include powering the crushers, aligning the ball mills and lining the CIL tanks. Key infrastructure for hot commissioning has now arrived on site.  The final items yet to be delivered but currently in transit include the gold room safe and a replacement transformer, which can be substituted by the generator sets until it arrives.   First treatment of ore is expected in the next few weeks followed by production of carbon in leach.  The Company remains on schedule for first gold pour by mid-Q3.  In addition, the company looks forward to providing an updated New Luika resource statement in July.

Working Capital Update

Following the combined US$40 million equity and convertible loan note placings in April, the Company is in a strong cash position and expects to have sufficient capital to cover the remaining working capital needs of the business through to production and into cash flow in mid-Q3, subject to no major unforeseen delays occurring during the commissioning of the plant.  Project capital costs remain in-line with original forecasts.  The additional funds have been used for working capital requirements for ongoing mining and stockpiling activities.  As of 31 May 2012, the Company had a stockpile inventory of approximately 117,000 tonnes of gold bearing ore; average grade control sampling suggest that the stockpile may contain over 22,000 ounces of gold (approximately US$35m at current gold prices).

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
Tavistock Communications	Tel: [phone]
Emily Fenton / Mike Bartlett

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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