LONDON (Alliance News) - Shanta Gold Ltd Tuesday said production exceeded the company's guidance during 2014 and said it is set to finalise a new loan facility soon that will give it the flexibility to consider paying a dividend.
During 2014, the gold miner produced 84,028 ounces of gold, which is ahead of the company's guidance of 80,000 ounces for the year and a 31% increase from the 64,000 ounces produced a year earlier.
"The company has delivered a very positive operating performance over the past year enabling us to report full-year production ahead of guidance," said Chief Executive Mike Houston.
Gold sales during the year totalled 87,758 ounces of gold at an average price of USD1,289 per ounce, compared to an average spot price of USD1,201 per ounce. This resulted in the company generating USD34.5 million in cash from its operations during the year, it said in a statement.
Shanta's unit costs were hit by the mining of lower-grade ore during the year, averaging USD941 per ounce, but remained within the company's guidance of between USD900 and USD950 per ounce.
The company's production guidance for 2015 has been set between 82,000 and 85,000 ounces of gold with an all-in sustaining cost guidance of USD830 to USD880 per ounce.
Shanta also has hedged sales from January to September of 31,500 ounces at an average price of USD1,240 per ounce. Spot gold was quoted early Tuesday at 1,291.20 per ounce.
At the end of December, Shanta reported a cash balance of USD14.9 million with an additional USD5.1 million of gold sale proceeds that were received after the year end. The company had net debt of USD40 million at the end of the year.
"Cash generation during the year was healthy, despite the lower gold prices, and enabled the company to fund its capital expenditure program and service debt obligations whilst maintaining a cash balance of USD14.9 million at year end," said Houston.
Shanta said it is expecting to finalise a new loan facility with Investec Bank during the first quarter of 2015, which will give the company greater financial flexibility and the option to consider paying a dividend, said the company in a statement.
The agreement with Investec Bank is for two loan facilities totalling USD40 million. From the facility, USD22.5 million will be used to refinance an existing bank loan with the balance being reserved.
Shanta shares were up 3.5% to 11.00 pence per share on Tuesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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