Shanta Gold enters into forward contracts amid volatile gold prices

Shanta Gold has entered into forward sale contracts for more than 30,000 ounces (oz) of gold to be delivered by year end.

Shanta Gold has entered into forward sale contracts for more than 30,000 ounces (oz) of gold to be delivered by year end.

The company said given the volatility of gold prices and its capital expenditure to achieve production targets, it felt it was necessary to commit to a number of forward sale contracts over part of the 2013 anticipated production.

The group has cash equivalents of $21m and expects capital spend of $7.0m, mostly in the second half of 2013, to achieve its exploration goals, updating the Singida feasibility study and to attain anticipated levels of production at New Luika Gold mine in Tanzania.

Shanta sold 10,192 oz of gold in the first quarter, generating $16.6m in revenue.

The company's new forward sale contracts equate to 43% of the forecast 2013 annual production. The contracts were secured at an average price of $1,429 per oz.

"Shanta in principle does not favour hedging/forward sales unless, as in this particular situation, it is put in place to provide stability during an important period in the company's development," said Chief Executive Officer, Mike Houston.

"We continue to put the necessary building blocks in place to ensure the stability and growth of this exciting asset."

RD

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Most Popular

Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
Inflation is the easiest way out of this – just don’t expect politicians to admit it
Inflation

Inflation is the easiest way out of this – just don’t expect politicians to admit it

The UK government borrowed £34.1bn in December, a record amount for that month. Britain's debt pile now amounts to 100% of GDP. How are we going to pa…
22 Jan 2021
When will the US stockmarket bubble burst?
US stockmarkets

When will the US stockmarket bubble burst?

With US stocks more expensive than before the Wall Street crash of 1929, there are growing signs of “mania”. But what will push markets over the edge?
22 Jan 2021