On 5 September 2017 Shanta Gold announced a plan to reduce costs by US$5 million on an annualised basis – this has now been achieved with cost reductions of $5.1 million executed, the full benefit of which will be achieved by the end of Q1, 2018.
Savings do not include the replacement of a mining contractor which was a result of the decline in open pit production and constitutes a large standalone saving.
The $5.1 million cost reduction is mostly comprised of renegotiated contracts with suppliers, lower headcount and eliminating non-essential G&A spending.
Further cost reduction initiatives remain ongoing with 45% of Shanta Gold’s supplier contracts (in terms of value) so far having been reviewed or replaced.
Shanta Gold is also pleased to announce initial results of its operational improvement program which includes:
- Targeting higher recoveries of over 93%, an improvement of 1.5-2% by H2, 2018. This follows laboratory scale extended leach test work on increasing residency time through the installation of an additional pre-leach tank. The project will cost around $0.5 million and is expected to have a payback period of 24 months. Assembly and installation is expected in April 2018 with commissioning by the end of June 2018
- Revised its mining method for the New Luika underground from cut and fill to long hole open stoping. This does not require back-filling with cement, lowering the cost by an estimated $3.6 million in 2018
- Shanta Gold continues to progress a number of operational improvement initiatives and will update the market in due course
“We have made good progress at Singida by declaring a compliant resource and in doing so, increasing Shanta Gold’s total group compliant resources to over 2 million oz,” says Shanta Gold CEO, Eric Zurrin.
“We have identified a number of targets at the project, that we will continue to explore over the coming months, with a view to expanding the potential size of the Singida project and increasing the measured and indicated resource ounces.
“I am also pleased to announce that we have already surpassed our targeted spending reductions of $5 million of annualised savings whilst identifying operational changes which will continue to create further value for Shanta Gold and its shareholders.
“This approach is in line with our previously announced strategy of aligning the senior management team with that of Shanta Gold’s owners and optimising the financial performance of our operations.”
Feature image credit: Wikimedia