JOHANNESBURG (miningweekly.com) – Aim-listed Shanta Gold remains on track to achieve its guidance of 82 000 oz to 88 000 oz in 2018 at an all-in sustaining cost (AISC) of between $680/oz and $730/oz, despite the New Luika gold mine, in south-west Tanzania, reporting lower production.

Production in the March quarter reduced to 17 663 oz, from 21 288 oz in the December quarter, but was in line with the company's revised mine plan and its full-year production guidance, it said on Thursday.

Overall, a total of 142 784 t of ore, grading 4.4 g/t gold was mined, compared with 143 092 t of ore grading 4.7 g/t gold in the fourth quarter.

The gold was produced at an AISC of $776/oz, which is in line with the reduced gold production during the period.

Shanta stated that the business continued to respond well to cost optimisation initiatives implemented under management's initial $5-million target, achieved in late 2017. In January this year, the miner increased the target to $7-million, with the additional $2-million expected to be achieved by the third quarter of 2018.

“Continued deleveraging of the balance sheet remains a high priority and, supported by a performing gold price, the production schedule for the remainder of the year puts us on track to make significant headway," CEO Eric Zurrin commented.

The gold miner lowered its gross debt by $3.8-million to $49.2-million, while its net debt decreased by $2-million to $37.5-million. This, the company noted, was the lowest level since the ramp up of operations in the last quarter of 2012.

Earnings before interest, taxes, depreciation and amortisation for the company were $9.1-million during the period, with cashflows from operating activities of $7.1-million.

Shanta reported quarterly gold sales of 17 691 oz at an average price of $1 329/oz. Forward sales from April to June 2018 have been reduced to 17 600 oz at an average price of $1 287/oz.

Capital expenditure decreased to $3.3-million from $6.3-million in the fourth quarter, while the cash operating costs increased to $599/oz, from $591/oz in the same period.