FUND manager Liberum Capital has sung the praises of
emerging gold producer Shanta Gold, describing the Tanzania-focused miner as
“on a roll”.
“Already this year, it has announced a resource and
reserve update at its flagship New Luika mine, in Tanzania, and a maiden
reserve at its next mine, Singida, also in Tanzania, which has driven its
shares up 17%.
“[In addition], the rest of the year is also stacked
with rerating catalysts, including [production] expansion to over 80 000 oz/y
at the New Luika mine and a potential doubling of the mine life,” the firm said
on Friday.
Following an extensive drill programme at Singida,
the miner on Wednesday announced a maiden reserve of 1.39-million tons at 5.1
g/t for 230 000 oz of recovered gold.
The ore reserve estimate, which focused on Singida’s
Gold Tree and Jem deposits, was based on a 2009 Joint Ore Reserves
Committee-compliant mineral resource estimate of 5.18-million tons at 3.3 g/t
for 550 000 oz.
Meanwhile, full-year production from New Luika,
which had been in production since 2012, beat the targeted 63 000 oz to deliver
64 054 oz of gold in 2013.
A new crusher, elution plant and electrowinning
plant would increase production to over 7 000 oz/m by the second half of the
year.
“The exploration upside [at New Luika] is huge, with
only 5% of the Lupa goldfields [surrounding the mine] explored to date. In
addition, the company’s next mine, Singida, offers low-cost, low-execution risk
production growth, while attractively low costs drive Shanta down the global
cost curve. Buy,” said Liberum.
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