Shares of Shanta Gold surged by 11% on Thursday following the company’s announcement of record-breaking production for the second quarter of the year. The AIM-listed mining company also reaffirmed its full-year production guidance. Here are the key highlights:
Production Update
- Record gold production: The group achieved 29,403 ounces, marking a substantial 92% increase from the previous quarter.
- NLGM (New Luika Gold Mine) recorded a production of 19,338 ounces, representing a significant 26% increase from the first quarter.
- Singida delivered its first gold pour on March 30, 2023, with a production of 10,065 ounces.
Guidance Confirmation
Shanta Gold reiterated its 2023 group production guidance, aiming to produce between 90,000 to 98,000 ounces of gold. This reaffirmation demonstrates the company’s commitment to meeting its targets.
Key Financials Highlights
- Reduced net debt: The company successfully decreased its net debt from $19.0 million in the previous quarter to $8.7 million, marking a substantial reduction of 54%.
- Increased Adjusted Ebitda: Shanta Gold’s Adjusted Ebitda soared to $23.2 million, reflecting a remarkable growth of 209% from the first quarter.
Operating Efficiency and Costs
- Surpassing expectations: The company achieved better-than-expected operating costs and all-in sustaining costs.
- NLGM demonstrated operating costs of $904/oz and all-in sustaining costs of $1,181/oz.
- Singida displayed impressive operating costs of $579/oz and all-in sustaining costs of $736/oz.
Hedging Strategy
Shanta Gold remains committed to being fully exposed to the spot gold price, with no gold hedging in place. This strategy positions the company to benefit from the market’s performance.
Strong Financial Position
The company reported cash and available liquidity of $25 million as of June 30, 2023, compared to $11.5 million in the previous quarter. Additionally, Shanta Gold has $4 million remaining from the working capital facility, which remains undrawn.
Shares of Shanta Gold were up 1.05 pence, reaching 10.75 pence as of 0742 GMT.