Shanta Gold Share Discussion Threads

[qs99] 10/2/2020 14:54

I would tend to agree Redhill....Helps provide another string to their bow....diversification of political risk away from TNZ.....not without it's risks, but management IMO have proven their ability and steps like this should help them grow further, while adding (hopefully) to TNZ reserves and de-leveraging further......if they can get that bloody VAT in, it would pay for this!!

[chipperfrd] 10/2/2020 14:53

Thanks for the links guys. Eric does come across as pretty happy about all this :-)

[redhill] 10/2/2020 14:47

Yes i think the name of the game here is diversification. With Tanzania being a little greedy and Kenya keen to attract mining it makes a lot of sense.
Costs to get this up and running at $8 million a year are very manageable and i notice that dividends are still very much in the managements plans.
This is very good for the Company and shareholders.

[roguetreader] 10/2/2020 14:35

Eric
talking the talk:



RT

[goodgrief] 10/2/2020 14:23

New presentation up...

[risa5] 10/2/2020 14:13

Shanta To Acquire Barrick's Kenya Gold Projects
Mon 10 Feb 2020 07:00
RNS Number : 4576C
Shanta Gold Limited
10 February 2020

10 February 2020
Shanta Gold Limited
("Shanta Gold", "Shanta" or the "Company")

SHANTA GOLD TO ACQUIRE BARRICK'S KENYA GOLD PROJECTS
Shanta Gold (AIM: SHG), the East Africa-focused gold producer announces that it has entered into a definitive agreement pursuant to which it will purchase 100% of the shares of Barrick's subsidiary Acacia Exploration (Kenya) Ltd. ("AEKL") from two subsidiaries of Barrick Gold Corporation ("Barrick"). AEKL's primary asset is a 100% participating interest in licences held by Afriore which includes an existing high-grade resource. ("West Kenya", "Project").

Transaction Highlights
· NI-43101 compliant Inferred Mineral Resource Estimate of 1,182,000 ounces ("oz") gold grading 12.6 g/t, believed to be one of the highest grading +1 Moz gold deposits in Africa;
· Project covers 1,161 sq km within the Lake Victoria greenstone gold field located in NW Tanzania and SW Kenya and home to Global Tier 1 assets including North Mara and Geita Gold Mine;
· Project requires in-fill drilling and technical studies prior to construction decision;
· Approximately US$55 m invested in exploration activities across West Kenya since 2010 by Acacia Mining Plc ("Acacia") and previous owners;
· Exploration drilling of 221,000 metres, approximately 80,000 soil samples, and regional IP has identified attractive exploration targets;
· Historical gold production of approximately 259,000 oz at 12.3 g/t from Rosterman mine, included in the licence area of the West Kenya Project;
· Fully financed purchase price totalling US$7 million cash, US$7.5 million shares in Shanta Gold Limited issued to Barrick, and a two percent life of mine net smelter return (NSR) royalty over the Project; and
· Barrick to become Shanta Gold's fifth largest shareholder with a 6.4% interest.
Benefits for Shanta Gold Shareholders
· Acquisition of one of the highest grade gold projects in Africa;
· A major presence in a geologically rich and underexplored greenstone gold region;
· Expands Shanta's operating presence in East Africa with a diversified portfolio of exceptional assets delivering long term growth;
· An established Centre of Excellence at the New Luika Gold Mine will advance the West Kenya Project and complement the project team based in Kisumu, Kenya;
· Increases Shanta's high-quality gold resource inventory to over 3 Moz contained gold with the prospect of future growth; and
· Complementary language and legal systems between Tanzania and Kenya based on English law.

Eric Zurrin, Chief Executive Officer, commented:
"The West Kenya acquisition is significant for Shanta Gold, creating an East African gold mining champion with realisable growth prospects and high asset quality across three attractive gold projects.
Shanta has successfully operated in East Africa for nearly 20 years and this acquisition is a natural extension in terms of geographic footprint, skillset, size and mining method.
One of Shanta's competitive advantages is being able to operate Long Hole Open Stoping operations more efficiently than its peers which lends itself well to the advancement of the West Kenya Project."

[juju44] 10/2/2020 12:57

Producers struggling to get market attention , explorers dont count

[phippsy1] 10/2/2020 12:55

Today's Analyst call is on Shanta's website. At 14mins Luke says the 7mil will come out of Shanta's funds, this means Shanta will not be debt free until H1 2021.
Still worth a short delay in my opinion to add longevity to the company.

[338] 10/2/2020 12:45

I plan to top up... Shanta is very undervalue with Tanzania operation that's why Barrick is willing to take SHG shares as part of payment

Barrick is also confident with Shanta to deliver production in Kenya that's why Barrick is willing to take 2% royalty as part of the payment

the acqusition is very good for Shanta and Barrick

[338] 10/2/2020 12:40

because it's not clear about the source of cash to pay the acquisition and how it will affect the plan for debt free and closing down the hedging.

Hopefully, we will get more explanation on the day or after the Final Results this month.

[juju44] 10/2/2020 12:31

Like I said , never does well on news

[roguetreader] 10/2/2020 11:52

At face value looks a good deal, buying at approximately $13 an Oz in the ground and long-term strategically looks a good move to me, so overall I'm positive.

Short-term concerns are whether they are biting off more than they can chew i.e. they are still net debt with New Luika until mid 2021; they are kicking off the Singida IPO and now they have a three year plan to get the Liranda project up and running. A lot of balls to juggle with not a lot of capital behind them. I would be a lot more positive if they had a financial backer at reasonable terms in the wings or money in the bank as a safety net.

EDIT: I confused debt timeline above with HUM, SHG actually should be net cash this year not mid 2021.

[qs99] 10/2/2020 11:34

again another muted reaction IMO....

Decent update though by SRB this am so not all bad!

DYOR

[hazl] 10/2/2020 10:11

thanks....

[donald pond] 10/2/2020 09:59

Thy are: ABF, AVV, BARC, ENQ, ERGO, FDEV, GFRD, GAMA, GOOD, JDG, LGEN, MGP, POG, PFD, RNK, RMV, RCH, RRE, SHG, SOLI
Based on combination of either Quality/Value and Momentum

[hazl] 10/2/2020 09:47

I didn't know that about the Stockopedia call MF.
What were the rest ?

8-)

[juju44] 10/2/2020 09:23

Apart from the misjudged hedge they are doing all the right things and a big re-rate is overdue

[mad foetus] 10/2/2020 09:18

There's an analyst call at 9.30, this looks a very good deal and that may put more detail out there. I was reminded yesterday that SHG was one of Stockopedia's naps for 2020. The price of gold and actions of company are all spot on right now, just need the share price to go through the gears

[juju44] 10/2/2020 09:15

Shanta never seems to do well on news

[kennyp52] 10/2/2020 09:09

QS99 .. agree with your assessment . Don’t need city boys round this one IMO . Tread carefully and self fund as much as possible as finance is likely to be very expensive. Barricks stake might be important moving forward .

[qs99] 10/2/2020 08:48

So the incentive is to keep waking market up to the delivery of SHG and get the shares re-rated, so that any issuance is not too dilutive. Incentive for management and think over last year or so they have delivered to what they said they would, so credibility at the moment is very good. DYOR etc, but easily lost so they do need to tread carefully, but looks a decent deal IMO at face value....

[kennyp52] 10/2/2020 08:45

Does acquisition mean they need to fund the building of a new mine ? Looks like they will be buying explored resource that is currently not being mined . If so how do they fund ? ... sounds like further dilution in the future when we get sold on all of the optimism .

[qs99] 10/2/2020 08:16

nice new high, but also need Market to digest this IMO....

[qs99] 10/2/2020 08:09

Doesn't appear IMO to be much stock around DYOR

[qs99] 10/2/2020 07:53

"Increases Shanta's high-quality gold resource inventory to over 3 Moz contained gold with the prospect of future growth"

that is the bit I like......still potential to be debt free, producing un-hedged gold and exploration upside IMO within 12-18 months....48p could be a realistic target now 338 mate!

GLA and DYOR