Shanta Gold Limited New JORC Resource Estimate & Project Update (1125Q)

TIDMSHG

RNS Number : 1125Q

Shanta Gold Limited

04 June 2018

4 June 2018

Shanta Gold Limited

("Shanta Gold", "Shanta" or the "Company")

New JORC Resource Estimate & Project Update at Singida

Shanta Gold (AIM: SHG), the East Africa-focused gold producer, announces an updated JORC compliant Mineral Resource Estimate ("MRE" or "Resource") and project update on the Singida Gold Mining Project ("the Project") in Central Tanzania.

Highlights

-- 56% increase in Measured Resource and a 12% increase in Measured and Indicated Resource, totaling 381 koz of gold at 2.08 g/t;

-- Only 2 of the 7 targets within the Project mining licences were tested in the recent drilling campaign;

-- As previously announced in April 2018, drilling intersections include:

o 10 m @ 20.82 g/t gold from 138 m in hole SC702, including 3 m @ 57.13 g/t gold from 138 m, and

o 5 m @ 10.35 g/t gold from 120 m in hole SC713

-- Ground geophysical work (IP) to commence in early Q3 2018, testing the potential of the 2 km strike between Cornpatch and Cornpatch West targets;

-- Construction of a high voltage power line, by Tanzania's Rural Energy Agency (REA) has commenced; and,

-- Internally estimated Project Net Present Value (NPV) has been enhanced following re-optimisation of the mine plan and improvement in forecasted energy costs.

Singida Resource Estimate

-- JORC compliant Project Resource totaling 12.3 Mt, grading 1.84 g/t and containing 725 koz of gold using a cut-off grade of 1.0 g/t consisting of:

o Measured and Indicated Mineral Resource totaling 5.71 Mt, grading 2.08 g/t gold and containing 381 koz of gold; and,

o Inferred Resource of 6.57 Mt, grading 1.63 g/t gold and containing 344 koz of gold.

-- The MRE incorporates three mining licenses and seven mineralised zones with a combined strike length of 4.9 km, with widths ranging from 5-15 m and mineralisation extending approximately 500 m below the topographical surface;

-- Gold Tree 1, which is at the centre of the three mining licenses, contains measured and indicated resources of 1.61 Mt, grading 2.80 g/t gold and containing 145 koz of gold at a cut-off grade of 1.0 g/t which is located near to surface (<120 m depth);

-- Independent minerology testing has been previously completed with average recoveries of 91%;

-- Mineralisation is open at depth and along strike with numerous parallel structures identified; and,

-- Shanta will shortly be commencing an exploration programme to delineate further resources and upgrade the inferred resources near to surface in the Cornpatch and Cornpatch West targets into measured and indicated resource categories.

Singida Project Update

-- The Rural Energy Authority (REA) is an autonomous body of the Ministry of Energy with an objective to improve access to modern energy services across rural Tanzania;

-- The Singida project is a direct beneficiary of REA's objective and will be connected to the central government power grid, which is expected to pass within 500 metres of the proposed location of the Project site;

-- Construction of the REA power supply line is expected to be completed by the end of 2018, funded by the Government and external donors;

-- In March 2018, Shanta established an internal Owners Team to advance desktop work for the Project using existing internal resources, at no additional cost to Shanta. A number of workstreams are ongoing by the Owners Team across all disciplines including geology, mine planning and process design; and

-- Project capital funding is being targeted from external third parties at the Singida asset level.

Eric Zurrin, Chief Executive Officer, commented:

The objective of the modest 1,600 metre RC drilling programme in Q1 2018, which targeted two of the seven key targets at Singida, was to upgrade resources from the Inferred to the Measured and Indicated (M&I) categories. This objective has been achieved - M&I Resources have now increased to nearly 400,000 oz of gold at 2.08 g/t. A geophysics programme is planned for Q3 to test upside at the Cornpatch and Cornpatch West targets as we target ongoing expansion and upgrading of the resource.

Analyst conference call

Shanta Gold will host an analyst conference call today, 4 June 2018, at 09:30 BST. Participants can access the call by dialling one of the following numbers below approximately 10 minutes prior to the start of the call.

UK Toll-Free Number: 08082370030

UK Toll Number: [phone]

PIN: 86675553#

A recording of the conference call will subsequently be available on the Company's website.

Enquiries:

 
Shanta Gold Limited 
                                         + 255 (0) 22 292 
Eric Zurrin (CEO)                         5148 
Luke Leslie (CFO) 
 
Nominated Adviser and Broker 
Numis Securities Limited 
                                         + 44 (0) 20 7260 
Paul Gillam / John Prior / James Black    0000 
 
Financial Public Relations 
Tavistock 
                                         + 44 (0) 20 7920 
Charles Vivian / Barnaby Hayward          3150 
 

About Shanta Gold

Shanta Gold is an East Africa-focused gold producer. It currently has defined ore resources on the New Luika and Singida projects in Tanzania and holds exploration licenses covering approximately 1,500km(2) in the country. Shanta's flagship asset New Luika Gold Mine commenced production in 2012 and produced 79,585 ounces in 2017. The Company has been admitted to trading on London's AIM and has approximately 778 m shares in issue. For further information please visit: www.shantagold.com.

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

Singida

The Singida Mineral Resource is based on seven-shear zone related gold deposits with a combined strike length of 4.9 km. All of these deposits are situated within three, 100% Shanta owned, mining licenses. The deposits trend east-west to north-west-south-east.

The westernmost deposits, consisting of Corn Patch and Corn Patch West, are moderate to steep dipping, SE/NW striking brittle-ductile structures. The central set of brittle-ductile shears host three deposits: Gold Tree, Gem, and Vivian. These deposits occur in a succession of basaltic host rock and meta-sediment units. The mineralised structures trend from 295 to 310 , dipping steeply to the southwest.

To the east of the Property are two east-west trending, steep dipping mineralised shear zones comprising the Kaizer Chief and Gustav deposits. The Kaizer Chief deposit is a sub-vertical structure with gold mineralisation localised along a distinct brittle ductile shear zone within mafic metavolcanic host rock. Gold mineralisation in the Gustav mineralised prospect is located within a distinct brittle-ductile shear zone characterized by significant percentages of pyrite, chalcopyrite, pyrrhotite and arsenopyrite mineralisation.

The MRE has been delineated by diamond core drilling ("DD"), reverse circulation ("RC") and rotary air blast ("RAB"). The initial drilling campaigns were completed between 2006 and 2009 and consisted of 322 (37,827 m) RC holes, 86 (1,496 m) RAB holes and 42 (6,562 m) DD holes. A drilling phase that started late in 2016 and continued into 2017 involved drilling of 179 RC holes totaling 5,527 m. The last drilling phase was completed in February and March 2018 on the Gold Tree and Jem deposits and comprised 15 RC holes totaling 1,603m.

Drilling Summary

 
                Gold Tree           Jem           Vivian         Cornpatch      Cornpatch       Kaizer Chief         Gustav 
                                                                                 West 
 
Drilling 
            Holes   Metres   Holes  Metres   Holes   Metres   Holes   Metres  Holes  Metres   Holes   Metres    Holes   Metres 
 
   RAB                          71   1,052                       15      445 
 
 (Phase 
    1) 
           ------  -------  ------  ------  ------  -------  ------  -------  -----  ------  ------  --------  ------  ------- 
RC (Phase 
    1)        122   13,307      43   5,767      20    2,605      27    3,628                     57     6,454      28    2,969 
 
DD (Phase 
    1)         10    1,106      14   1,408       1       67       2      340                      5       814       4      610 
 
RC (Phase 
    2)                                                                           25   3,097 
 
DD (Phase 
    2)          3    1,108       3   1,109 
 
 2016/17 
    RC        179    5,527 
           ------  -------  ------  ------  ------  -------  ------  -------  -----  ------  ------  --------  ------  ------- 
 2018 RC        9      991       6     612 
           ------  -------  ------  ------  ------  -------  ------  -------  -----  ------  ------  --------  ------  ------- 
  Total       323   22,039     137   9,947      21    2,672      44    4,413     25   3,097      62     7,268      32    3,579 
 
 

All samples are submitted to the SGS Laboratories in Mwanza, Tanzania, which is accredited to conform to ISO/IEC standards. All QA/QC results have been reviewed by Sphynx Consulting CC.

It should also be noted that DRA Mineral Projects (PTY) Ltd completed an advanced metallurgical study in February 2014, based on mineralogy reports by SGS Ltd and gravity/leach test work completed by Mintek (SA) and Peacock and Simpson (Zimbabwe). The overall estimated recovery was discounted for plant inefficiencies and calculated to be 91%, from a head grade of 2.6 g/t Au, utilising discounted gravity and leach recovery values of 50% and 82.45% respectively.

As part of a number of studies completed at Singida, SRK Consulting (SA) (Pty) Ltd (SRK) conducted a mining geotechnical study. The scope of the study was to provide recommendations for pit slope designs on a feasibility level in order to facilitate the safe and economical mining of the Singida Open Pits. The results from the study recommended overall slope angles from 49-51 degrees, berms widths of 15 m and bench widths ranging from 2.84 m to 8.83 m dependent on the degree of weathering.

The Company is completing the final phase of the resettlement at Singida and continues its Corporate Social Responsibility program in the district.

Mineral Resources

Singida's Measured and Indicated Resource at 26 May 2018 is an estimated 5.71 Mt, grading 2.08 g/t and containing 0.381 Moz of gold at a cut-off grade of 1.0 g/t. The majority of the measured and indicated resources are less than 120 m from surface.

Estimated Inferred Resources total over 6.57 Mt, grading 1.63 g/t and containing 0.344 Moz of gold at a cut-off grade of 1.0 g/t.

Shanta Gold Ltd - Singida Gold Project Tanzania

Mineral Resource Estimate (MRE) - 26 May 2018

 
  JORC 2012 Classification        Tonnes  Gold Grade         Gold 
 
                                     Mt      g/t             Moz 
 
  Measured                      2.35         2.50        0.189 
 
  Indicated                     3.36         1.78        0.192 
 
  Sub - Total M+I               5.71         2.08        0.381 
 
  Inferred                      6.57         1.63        0.344 
 
  Total                         12.28        1.84        0.725 
 
 
 

The Singida Mineral Resource is based on seven-shear zone related gold deposits with a combined strike length of 4.9 km. Historical drilling has identified mineralisation extending down to 500 m from surface in the Gold Tree One deposit.

 
                   MEASURED                 INDICATED                INFERRED              TOTAL RESOURCES 
             TONNES  GRADES  OUNCES   TONNES  GRADES  OUNCES   TONNES  GRADES  OUNCES  TONNES  GRADES   OUNCES 
 
            ('000)    g/t    ('000   ('000)    g/t    ('000   ('000)    g/t    ('000   ('000)   g/t     ('000 
                               oz)                      oz)                      oz)                      oz) 
            -------  ------  ------  -------  ------  ------  -------  ------  ------  ------  ------  ------- 
CORNPATCH 
   WEST        -       -       -       722     1.67     39      995     1.4      45    1,716    1.51     84 
 
CORNPATCH      -       -       -       415     1.73     23      474     2.07     31     889     1.91     54 
 
  VIVIAN       -       -       -       259     2.27     19      153     2.25     11     412     2.26     30 
            -------  ------  ------  -------  ------  ------  -------  ------  ------  ------  ------  ------- 
 JEM ZONE 
    1&2       577     2.62     49      430     1.96     27      655     1.98     42    1,663    2.19     117 
 
GOLD TREE 
  ZONE 1     1,179    2.95    112      431     2.37     33     1,479    1.68     80    3,089    2.26     224 
 
GOLD TREE 
  ZONE 2      172     1.51     8       130     1.31     5       250     1.2      10     552     1.32     23 
 
GOLD TREE 
  ZONE 3      295     1.67     16      303     1.71     17     1,867    1.61     96    2,464    1.63     129 
 
  KAIZER 
   CHIEF       -       -       -       234     1.27     10      398     1.36     17     632     1.33     27 
 
  GUSTAV      128     1.12     5       435     1.41     20      295     1.29     12     858     1.33     37 
 
  TOTAL      2,351    2.50    190     3,359    1.78    193     6,566    1.63    344    12,275   1.84     725 
            -------  ------  ------  -------  ------  ------  -------  ------  ------  ------  ------  ------- 
 

Estimation Methodology

The top and bottom contacts of the orebodies were defined along section lines using geological, structural and alteration data as well as gold assay grades. The orebodies were defined by 3D wireframe interpretation with sub cell block modelling.

Statistical analysis of the data was undertaken for each prospect in order to inform decisions on treatment of extreme grade values, compositing length, variography and orientation of the resource model.

In order to determine the optimum model block size, the Kriging Efficiency and Regression slope was studied for the Gold Tree 3 orebody and the block size obtained was applied to the other deposits.

Ordinary Kriging was used as the estimator and a three-pass search strategy was utilised with either an octant search method or a limit placed on the amount of data per hole that informed the estimate so that the informing data was not clustered.

The resultant block models were validated against the raw input data to ensure the block model grades are both realistic and representative.

The resource was classified into Measured, Indicated and Inferred mineral resources according to guidelines compliant with the Australasian Code for Reporting (2012) as published by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy (JORC).

Recommendations to get to PFS and Mine Reserve

The Company will now focus on reviewing and upgrading the inferred resources near to surface in the Jem, Gold Tree and Corn Patch deposits into measured and indicated resource categories, with the objective of establishing and completing a Singida Mineral Resource and Ore Reserve statement.

The MRE was completed by independent consultants - Sphynx Consulting CC from South Africa. The technical information contained within this announcement has been reviewed and approved by Mr. Awie Pretorius MSc.Pri.Sci.Nat. Mr. Pretorius is a consultant to Shanta and a member of the South African Council for Natural Scientific Professionals (SACNASP Membership Number 400060/91).

He has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' and for the purposes of the AIM Guidance Note on Mining and Oil & Gas Companies dated June 2009.

Glossary of Terms

 
                   the lowest grade, or quality, of mineralised material 
  cut-off grade     that qualifies as economically 
                   mineable and available in a given deposit. May be 
                    defined on the basis of 
                   economic evaluation, or on physical or chemical 
                    attributes that define an 
                   acceptable product specification. 
                  ---------------------------------------------------------- 
                   Grams per metric tonne. The unit of measurement 
  g/t               of metal content or grade, 
                   equivalent to parts per million. 
                  ---------------------------------------------------------- 
                   A 'Measured Mineral Resource' is that part of a 
  Measured          Mineral Resource for which 
                   quantity, grade (or quality), densities, shape, 
  Mineral           and physical characteristics are 
                   estimated with confidence sufficient to allow the 
  Resource          application of Modifying Factors 
                   to support detailed mine planning and final evaluation 
                    of the economic viability 
                   of the deposit. 
                   Geological evidence is derived from detailed and 
                    reliable exploration, sampling 
                   and testing gathered through appropriate techniques 
                    from locations such as 
                   outcrops, trenches, pits, workings and drill holes, 
                    and is sufficient to confirm 
                   geological and grade (or quality) continuity between 
                    points of observation where 
                   data and samples are gathered. 
                   A Measured Mineral Resource has a higher level of 
                    confidence than that 
                   applying to either an Indicated Mineral Resource 
                    or an Inferred Mineral 
                   Resource. It may be converted to a Proved Ore Reserve 
                    or under certain 
                   circumstances to a Probable Ore Reserve. 
                  ---------------------------------------------------------- 
                   the process or processes by which a mineral is introduced 
  Mineralisation    into a rock, resulting 
                   in a valuable or potentially valuable deposit. It 
                    is a general term, incorporating 
                   various types; e.g., fissure filling, impregnation, 
                    and replacement. 
                  ---------------------------------------------------------- 
                   A 'Mineral Resource' is a concentration or occurrence 
  Mineral           of solid material of 
                   economic interest in or on the Earth's crust in 
  Resource          such form, grade (or quality), and 
                   quantity that there are reasonable prospects for 
                    eventual economic extraction. 
                   The location, quantity, grade (or quality), continuity 
                    and other geological 
                   characteristics of a Mineral Resource are known, 
                    estimated or interpreted from 
                   specific geological evidence and knowledge, including 
                    sampling. Mineral 
                   Resources are sub-divided, in order of increasing 
                    geological confidence, into 
                   Inferred, Indicated and Measured categories. 
                  ---------------------------------------------------------- 
 
 
 
                     An 'Indicated Mineral Resource' is that part of 
  Indicated           a Mineral Resource for which 
                     quantity, grade (or quality), densities, shape and 
  Mineral             physical characteristics are 
                     estimated with sufficient confidence to allow the 
  Resource            application of Modifying Factors 
                     in sufficient detail to support mine planning and 
                      evaluation of the economic 
                     viability of the deposit. 
                     Geological evidence is derived from adequately detailed 

                      and reliable exploration, 
                     sampling and testing gathered through appropriate 
                      techniques from locations 
                     such as outcrops, trenches, pits, workings and drill 
                      holes, and is sufficient to 
                     assume geological and grade (or quality) continuity 
                      between points of 
                     observation where data and samples are gathered. 
                     An Indicated Mineral Resource has a lower level 
                      of confidence than that applying 
                     to a Measured Mineral Resource and may only be converted 
                      to a Probable Ore 
                     Reserve. 
                    --------------------------------------------------------- 
                     An 'Inferred Mineral Resource' is that part of a 
  Inferred Mineral    Mineral Resource for which 
                     quantity and grade (or quality) are estimated on 
  Resource            the basis of limited geological 
                     evidence and sampling. Geological evidence is sufficient 
                      to imply but not verify 
                     geological and grade (or quality) continuity. It 
                      is based on exploration, sampling 
                     and testing information gathered through appropriate 
                      techniques from locations 
                     such as outcrops, trenches, pits, workings and drill 
                      holes. An Inferred Mineral 
                     Resource has a lower level of confidence than that 
                      applying to an Indicated 
                     Mineral Resource and must not be converted to an 
                      Ore Reserve. It is reasonably 
                     expected that the majority of Inferred Mineral Resources 
                      could be upgraded to 
                     Indicated Mineral Resources with continued exploration. 
                    --------------------------------------------------------- 
  In-Situ            In its natural position or place. 
                    --------------------------------------------------------- 
                     The Australasian Code for Reporting of Exploration 
  JORC Code           Results, Mineral 
                     Resources and Ore Reserves (the 'JORC Code' or 'the 
                      Code') sets out 
                     minimum standards, recommendations and guidelines 
                      for Public Reporting in 
                     Australasia of Exploration Results, Mineral Resources 
                      and Ore Reserves. The 
                     Joint Ore Reserves Committee ('JORC') was established 
                      in 1971 and 
                     published several reports containing recommendations 
                      on the classification 
                     and Public Reporting of Ore Reserves prior to the 
                      release of the first edition of 
                     the JORC Code in 1989. 
                     Revised and updated editions of the Code were issued 
                      in 1992, 1996, 1999, and 
                     2004. The 2012 edition supersedes all previous editions. 
                    --------------------------------------------------------- 
                     One thousand Troy ounces. All references to ounces 
  Koz                 are Troy ounces with the 
                     conversion factor being 31.1034768 metric grams 
                      per Troy ounce 
                    --------------------------------------------------------- 
  Mt                 One million metric tonnes 
                    --------------------------------------------------------- 
                     That portion of the metal contained within the ore 
  Recoverable         that can be recovered through 
  Ounces             metallurgical processing 
                    --------------------------------------------------------- 
                     Mined ore that can be processed by the recovery 
  ROM                 plant 
                    --------------------------------------------------------- 
 

ENDS

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June 04, 2018 02:00 ET (06:00 GMT)