Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Shanta Gold (SHG) has issued an exploration update for its assets in Tanzania and Kenya with its Singida gold mine achieving production ramp-up objectives.
With steady state throughput and gold production at Singida in Tanzania, the company emphasises that “34,000 meters of drilling has now recommenced at New Luika Gold Mine and West Kenya Project”. For New Luika in Tanzania, there’s a planned 8,000 metres of drilling across 51 holes at surface and underground deposits. At West Kenya there’s planned up to 26,000 metres drilling across 80 holes targeting both resource category upgrades and resource extensions. There’s also exploration drilling at Singida planned for the third quarter.
There can be confidence including with the company’s drilling track-record at the projects and with, for example, at Singida only 26% of total resource included in the reserve-based mine plan and at West Kenya already a resource of 1.76Moz grading 5.55g/t having been defined and consultants now being engaged to accelerate technical studies.
The company notes that it has now completed two gold shipments from Singida and the mine is free cash flow positive – and we’ve previously noted that, at even a $400 per ounce margin, a now heading towards 100,000 ounces of annual production equates to $40 million. With also the clear potential of West Kenya and now “expect to announce drilling assay results beginning in July and updates to our reserves and resource estimates throughout Q3 and Q4”, we continue to see clear catalysts for a return to above a 16p share price here. At up to the current 11.5p, approaching £121 million, currently approx. $150 million, market cap, following our 10.5p offer price November tip, Buy.
This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.