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

Delivering profits : should you buy Royal Mail shares?
Share tips

Delivering profits : should you buy Royal Mail shares?

The volume of parcels delivered by Royal Mail soared during the pandemic, and so did its profits. But it has been coming under pressure lately. So, as…
19 May 2022
Avoid easyJet shares – there are better airlines to invest in
Share tips

Avoid easyJet shares – there are better airlines to invest in

EasyJet used to be one of Europe’s most impressive airlines. But now it is facing challenges on all fronts and losing out to the competition. Rupert …
19 May 2022
Tech stock crash – dotcom bust 2.0 is upon us
Tech stocks

Tech stock crash – dotcom bust 2.0 is upon us

It’s carnage in the tech sector as the market crashes. But that spells opportunity for canny investors, says Matthew Lynn
19 May 2022
Three things you should learn from Bill Ackman's brilliant Netflix trade
Investment strategy

Three things you should learn from Bill Ackman's brilliant Netflix trade

Hedge fund guru Bill Ackman has lost $400m selling Netflix shares. John Stepek explains why this was a brilliant trade, and outlines three things that…
19 May 2022

Most Popular

Get set for another debt binge as real interest rates fall
UK Economy

Get set for another debt binge as real interest rates fall

Despite the fuss about rising interest rates, they’re falling in real terms. That will blow up a wild bubble, says Matthew Lynn.
15 May 2022
Is the oil market heading for a supply glut?
Oil

Is the oil market heading for a supply glut?

Many people assume that the high oil price is here to stay – and could well go higher. But we’ve been here before, says Max King. History suggests tha…
16 May 2022
Value is starting to emerge in the markets
Investment strategy

Value is starting to emerge in the markets

If you are looking for long-term value in the markets, some is beginning to emerge, says Merryn Somerset Webb. Indeed, you may soon be able to buy tra…
16 May 2022