Shanta Gold (SHG) stock plunges 20% on lower output guidance
By Jenni Reid
10:57, 7 December 2021
Shares in Shanta Gold (SHG) fell to a near two-year low on Tuesday morning after the miner cut its output guidance for the fourth quarter.
The Guernsey-headquartered miner, which is listed on London’s Alternative Investment Market, said output would be in the range of 55,000 to 57,000 ounces, down from a previous target of 60,000 to 65,000 ounces.
Its stock was down 21.93% to 8.98p ($0.12) at 10:45 UTC, its lowest level since March 2020, putting the price down 49.42% in the year to date.
Delivery issue
The company said the lower guidance was due to operational difficulties at its New Luika Gold Mine in Tanzania, where its mining activities are based.
It added that it had been supplied an unreliable emulsion product and broken underground production charging units by a third-party vendor, which had now been fixed.
Shanta Gold chief executive Eric Zurrin said gold output had been on target and the issues were wholly related to this delivery.
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Profits down
The company reported an annual fall in profit from $27.5m to $17.4m in the first six months of the year, a volatile one for gold prices, as it saw lower sales and production.
“Shanta is well funded with cash and available liquidity of $24.7 million at 30 November 2021, plus operating cash flow from unhedged gold sales. Shanta’s negligible debt position of $1.4 million provides significant additional liquidity on the balance sheet,” Zurrin said.
“Growth projects at Singida and West Kenya continue on track and we look forward to providing a resource update in early 2022 for the latter.”
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