Shanta Gold Share Discussion Threads

[chipperfrd] 23/1/2020 09:00

johnrxx99, thank you. Yes family well and I can't complain.

[redhill] 23/1/2020 08:44

My target is 20p/25p by the end of 2020 if they clear their debt.

[fitton] 23/1/2020 08:19

My target is 20p,25p if they can add to resources.45p would be a market cap of £350m, that would be great and I will be retiring but unless they add a further 20k a year and add another 5 years of reserves 45p may be optimistic.

[goodgrief] 23/1/2020 08:01

Good to meet you Chip. The moment you uttered 'zig-zag', I thought that has to be Chip!

[johnrxx99] 23/1/2020 07:17

Nice to see you active Chip. Hope family all well.

[338] 22/1/2020 20:24

Share price 4.5 times higher means 45p...👍... that's my target

[jc2706] 22/1/2020 15:54

On that basis the share price should be about 4.5 times higher to get to the average. In my experience share prices rarely jump to the 'logical' price. They either go way too high (generally for companies without revenue streams based on 'hope' - GGP is a classic example) or gradually narrow the gap with selling all along the way.

The perception of SHG will gradually improve as VAT is returned and debt is removed but it will happen over a course of months and years, with the odd sharp jump of course. I believe that there will also be a backdrop of rising gold prices which will improve the share price of all gold companies so SHG should perform well relative to a well performing market sector.

[chipperfrd] 22/1/2020 13:54

Ev/EBITDA is 2.6 !!

Reduced debt lowers the Ev and improved gold price increases EBITDA.

So just how low is the market going to keep SHG (that's rhetorical)!

Average Ev/EBITDA in the gold sector is c. 11.7x

Very overdue an improved share price IMHO.

[chipperfrd] 22/1/2020 13:44

2020 should be a major step for Shanta.

They should be finally deleveraged and henceforth be net cash positive.

Without debt to service they can clear current hedge and henceforth be non-hedged.

Singida IPO will provide a go/no-go option on finally beginning to realise returns from that asset.

Hopefully, a continued offset of tax against VAT receivables above the rate of new VAT will gradually reduce the outstanding amount due - with clear benefit to the bottom line. And perhaps further direct cash payments from the Government!!

The above will (in all probability) set the scene for a commencement of dividends in 2021(ish).

Chip

[hamp] 20/1/2020 12:45

most if not all the sells are buys at10.59 as ihave just tested the market,and bought they are down as sells! hamp.

[risa5] 19/1/2020 22:42

Best shares for January 2020

Royston Wild: Shanta Gold
With gold prices having charged through the psychologically critical $1,500 per ounce marker in chirpy end-of-year business, the stage could well be set for more meaty gains in January, I reckon.
And what better way to play the gold bull run than by buying shares in Shanta Gold (LSE: SHG)? It’s a bullion digger whose share price boomed around 55% in 2019, and yet one whose low forward P/E ratio of 6.8 times still suggests that it’s undervalued.
Shanta Gold isn’t just a play on the strong metal prices of the moment, though, with accelerating production (which was up 15% in the third quarter at 22,726 ounces) giving extra reason for stock pickers to pile in today.
Royston Wild does not own shares in Shanta Gold.

[qs99] 19/1/2020 12:12

thanks....bodes well for major re-rating IMO over and above this year's rise....DYOR.....

[risa5] 18/1/2020 22:33

Shanta to enter net cash position in 2020

16th January 2020

By: Creamer Media Reporter


East Africa-focused gold miner Shanta Gold says it is well-positioned for another strong year, after having exceeded its production guidance for 2019.
It produced 84 506 oz of gold in the 12 months to December 31, above the guided 80 000 oz to 84 000 oz.

All-in sustaining costs (AISC) for the year, at $779/oz, were also in line with guidance of $740/oz to $780/oz.
During the last quarter of the year, Shanta's New Luika mine, in Tanzania, was successfully connected to the Tanzania Electric Supply Company's (Tanesco's) power grid, following the construction of the required infrastructure.

The connection to the grid is expected to give the mine access to low-cost power supply that could help Shanta access lower-grade ounces by lowering overall costs. The connection to the grid also diversifies the mine's available power sources.
The mine will initially draw 10% of its power requirements from the Tanesco grid and this might increase to 25% at a later date.
By December 31, Shanta's net debt stood at $14.3-million, the lowest in the company's history.
Shanta said the decrease was achieved as a result of prudent cost containment and a strong gold price.
“The company has achieved a number of important objectives in 2019, with gold production exceeding guidance and net debt expected to soon move to net cash," CEO Eric Zurrin commented in a release published on Thursday.
The gold miner expects to produce between 80 000 oz and 85 000 oz of gold this year, at an AISC of $830/oz to $880/oz. The higher AISC will mainly be driven by the reintroduction of higher-cost supplementary openpit mining from the Shamba pit.
Meanwhile, the company has set its exploration budget for this year at $5-million, an increase of 65% year-on-year. Exploration remains focused on the existing mining licences, as well as regional targets in the Lupa goldfield.

[risa5] 18/1/2020 22:07

Shanta Gold to clear debts in 2020 as production rises
Snapshot
Tanzania-focused gold miner
2019 production rises to 84,500oz
Proposal to IPO Singida asset to raise US$20mln for construction

How it's doing
Shanta Gold Limited (LON:SHG) comfortably beat its 2019 production forecast even with reduced output from the New Luika mine in the fourth quarter.
The Tanzania-based miner produced 19,550 ounces (oz) of gold in the last three months taking the yearly total to 84,500oz, 500oz better than the top of the guided range.

Head grade in the last three months was 3.8 grammes per tonne (g/t) compared to 4.5 g/t in the previous quarter, while costs were also affected by an overhaul of its power station generator.
For 2020, Shanta expects to produce between 80,000-85,000oz at a sustainable cost of US$830-880/oz.
Strong cashflow currently being generated will clear the group's debts fully during the year.
In the New Luika mine area, exploration drilling at Bauhinia Creek North and Elizabeth Hill North has intersected mineralisation over sizeable widths, suggesting significant potential for additional resources to add to the mine plan Shanta said in October.
Singida float
Plans to float its Singida gold mining asset in Tanzania on the Dar es Salaam stock exchange are progressing.
The gold miner wants to raise US$20mln to develop Singida, with the IPO documents now lodged with the Tanzanian authorities.
Shanta will retain at least 51% ownership of Singida and will operate the project with the money to be used to start production and for exploration to expand the resource.
Newly published project economics suggest production will average 26,000oz per annum for an initial six-year period.
Singida will cost US$16mln to get up and running and a further US$3mln in working capital but the investment is expected to pay off as the project has a net present value of US$31mln and an internal rate of return of 67%.
A life project cash cost of US$794/oz is well below the price of gold.
Shanta sees “significant further upside” for the project with substantial resources – around 344,000oz – currently sitting outside the project economics.
Watch the interview

Inflection points
Details of Singida IPO
More VAT repayments from Tanzanian government
Gold price continues to rise
Resource upgrade from drilling at New Luika satellite deposits

Blue sky
Production above 100,000oz takes Shanta to next level in league of miners
Additional acreage around New Luika and Singida can boost output even more

Proactive Investors 16 Jan 2020
[...]

[phippsy1] 18/1/2020 21:50

If everything goes to plan we should be debt free by Q3,What is a realistic dividend to expect assuming the price of gold is $1550?

[imnotspartacus] 18/1/2020 09:22

It's amazing non of the investment sites have mentioned the VAT...shh!

[hazl] 18/1/2020 08:10

What a great investment this has been this year!

Looks rearing to go .

[redhill] 18/1/2020 04:42

VAT has already decreased substantially and is expected to continue to fall.
Would be foolhardy to write this off in my opinion.

[risa5] 17/1/2020 23:55

Q4 Financial Summary
-- Net debt(1) (excluding VAT receivable) of US$14.3 m (Q3: US$20.7 m);
-- Unrestricted cash balance of US$3.5 m (Q3: US$5.0 m);
-- 5,348 oz of bullion available for sale at the end of the Period (Q3: 3,022 oz);
-- Liquidity available for draw down from Exim working capital facility of US$2.5 m (Q3: US$2.5 m);
-- Forward sales reduced to 40,000 oz (Q3: 43,000 oz);
-- AISC(3) of US$902 /oz (Q3: US$723 /oz); and,
-- VAT receivable decreased to US$21.8 m (Q3: US$27.4 m) including US$2.7 m of cash refunds.

[trader365] 17/1/2020 20:28

JC - $6m refund?? I think your calculator needs a new battery.

I only see $4.8m in 2 years. Over the same 2 years Shanta has paid over $14m in VAT, so the debt has grown by over $10m and is growing by $600,000 a month.

"VAT refund of US$1.4 million in the form of a cash payment"


"VAT refund of US$3.4 million, which is made up of a US$1.9 million offset against corporate taxes payable in 2016 and 2017 and a cash payment to the Company of US$1.5 million"


"Monthly VAT outgoings have been reduced to approximately US$600,000 per month and maintaining a lean business has been key to dealing with these continued cash outflows"

[jc2706] 17/1/2020 17:25

Kennyp52,

I would be very surprised if that was included. They very clearly want to highlight the VAT to be returned and when you have just got $6m back, why would you write the rest off?

[redhill] 17/1/2020 17:21

It was good to see that the rise today was maintained up until the close. Bodes well for Monday.

[redhill] 17/1/2020 17:07

kennyp52

Very unlikely in the foreseeable future bearing in mind that it appears to be reducing again now.

Also net debtors & creditors have never been included in this calculation.

[kennyp52] 17/1/2020 16:20

This stands out to me ...

Q4 Financial Summary
· Net debt 1 (excluding VAT receivable) of US$14.3 m (Q3: US$20.7 m);

If the VAT was recoverable why would you exclude it ?

The point remains ... are they going to have to write this down at some stage ??