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Shanta Gold starts construction of the Singida Project, Tanzania

Shanta Gold Ltd. said it has started construction of the Singida Gold Mining Project in central Tanzania with updated project economics.

The mine will increase Shanta’s group production to 110,000 ounces in the first full year of operation and have average annual underlying earnings of US$27 million.

The reserve-based mine plan gives a post-tax net present value (NPV) at 8% of US$73 million, an increase of US$25 million since the previously published estimate of US$31 million in December 2018.

The internal rate of return (IRR) will be 59% at US$1,900 per ounce at the approximate current gold spot price, the company said, for an average annual life of mine gold production of 32,000 ounces at an all-in sustaining cost (AISC) of US$869 per ounce.

It will increase Shanta’s group production to 110,000 ounces in the first full year of operation and have average annual underlying earnings (EBITDA) of US$27 million.

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The miner said the total capital investment will be US$26 million over a 24-month construction period, excluding pre-stripping, funded from internally generated cash flow.

Over 90% of the miner’s existing reserves are 120 metres below surface, while resources 9.8mln tonnes grading 2.11 grammes per tonne for 664,000 ounces currently sit outside the project economics, but within the mining licenses, giving “significant upside potential” Shanta said.

“Singida is hosted in a greenstone deposit lending itself well to upside exploration potential,” said Shanta chief executive Eric Zurrin in a statement.

“Future exploration will target the extension of reserves and will be funded by cash flow from production at Singida. Successful future exploration could justify an increase in the size of the plant to increase both throughput and production.”

“Singida will have a major positive impact on the Ikungi region. Shanta intends to roll out its well-regarded CSR program into the surrounding villages which will lead to improvements in livelihoods, water, health and education,” he added.

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