Shanta Gold on track to hit 2013 gold production target

East African-focused mining company Shanta Gold is back on track to hit its 2013 production target of 70,000 ounces of gold in the New Luika Gold Mine in Tanzania, according to a trading update published this morning.

New crusher speeds up productionThe AIM-listed mining company revealed that, following the successful installation of a tertiary crusher at the mine, it had more than doubled the volume of material broken down daily since the initial crushing circuit installed struggled to handle the run of mine ore.

The original two-stage crushing circuit was upgraded to a three-stage crushing circuit in early January resulting in 870 tonnes of material being crushed per day in the early commissioning period compared to an average of 390 tonnes per day in the last quarter.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Following the commencement of production at New Luika at the end of August 2012, the company produced 5,748 ounces of gold in the fourth quarter of 2012 with a further 1,917 ounces of gold absorbed on carbon which has since been converted to dore.

Houston: 'we're making progress'

Mike Houston, Chief Executive Officer of Shanta Gold, commented: "I am pleased to be able to report that we are making progress in achieving both our operational and commercial goals. It is still early days but the commissioning of the recently upgraded three-stage crushing circuit has gone satisfactorily and will result in a more consistent feed to the mills and in addition allow the company to build up a stockpile of crushed ore which will assist in alleviating potential downstream plant outages.

"While the ramp up will continue during the first few months of this year the changes put in place by the company to date, together with our strengthened financial position, has provided a sound base to meet the 2013 production target of 70,000oz plus."

Shanta Gold's share price was up 10.65% to 23.38p at 10:29 on Monday morning.

MF