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The miner posted first quarter and final 2014 results today, which showed that last year it recorded a profitable year, despite a 'challenging' gold market.
However in the three months to end March, production at New Luika in Tanzania was impacted by completing the Bauhinia Creek access ramp and reduced access to the Luika Pit which meant a lower quantity and quality of ore was processed.
The company said operations should recover by May.
The lower production means the firm's full year guidance has been revised to 72,000 - 77,000 ounces at all in sustaining costs of between US$850 and US$900 per ounce.
Chief Executive Toby Bradbury said: "While production in Q1 was below forecast, operations will recover to full potential from May 2015 on a lower cost profile. The focus remains on growing the business by capitalising on the upside potential of our exploration opportunities at New Luika as well as at Singida."
“We are on course to meet our targets of 72-77 thousand ounces despite the setbacks in the first quarter.
“We are predicting production in the third and fourth quarter to match the best quarters of 2014.”
Cash cost and all in sustaining costs for the first quarter were US$1,143 (Q4: US$779) and US$1,451 (Q4: $979) per ounce respectively
Gold sales were 13,551 ounces (Q4: 24,700) at an average price of $1,252 per ounce, while cash generation from operations stood at US$5.8 million
The firm has forward sales from April 2015 to September 2015 of 21,342 ounces at an average price of US$1,251 per ounce.
Reworked mine plans for both these areas have resulted in a substantial reduction in forecast strip ratios resulting in cost savings.
Initial indications showed that more than US$20 million could be saved over the next two years.
Bradbury said: "Our newly enhanced management and technical team has identified substantial opportunities to optimise the surface mining operations at New Luika.”
For the year to December 31, 2104, pre-tax profit was US$16.6mln compared to a loss US$4.4mln in 2013, while revenue was US$115mln - 31% higher than US$65.9mln.
The firm said 87,758 ounces of gold were sold, an increase of 42% from 2013, while 580,664 tonnes of ore were milled, up 48% on the previous year.
The group said: "Despite the weaker gold price, revenue for the year was 115mln. That is 31% higher than the previous year and was driven by gold production.
“The company consolidated the successes achieved in 2013 with above forecast production and a strong cash generation which enabled Shanta to record a profitable year, reduce its net debt position by US$9 million and fund a critical capital expenditure programme whilst maintaining a positive cash position at year end."
Broker Shorecap said the first quarter financials had taken the shine off the 2014 report.
Shorecap said: “As expected following its full-year production report (84koz at US$941/oz, slightly ahead of guidance of 80-83koz at US$900-950/oz), Shanta reported good 2014 financials.
It was therefore unfortunate that Shanta has had again to revise down full-year 2015 production guidance to 72-77koz at S$850-900/oz AISC (previously: 82-85koz at US$830-880/oz AISC; originally 83-85koz).”
Shares in Shanta eased 5.6% to 8.1p.