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Shanta Gold finishes Chunya feasibility study....

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by Ndahani, Jul 12, 2010.

  1. Ndahani

    Ndahani JF-Expert Member

    Jul 12, 2010
    Joined: Jun 3, 2008
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    Results of Chunya Feasbility and Issue of Equity

    6 July 2010

    Shanta Gold Limited ("Shanta Gold" or the "Company") is pleased to announce the completion of its Feasibility Study on the Chunya gold project in the Lupa goldfield in southern Tanzania. The study was conducted and coordinated by Environmental, Process and Mining Consultants (Pty) Ltd ("EPMC") a South African based consultancy with a proven track record and many years of successful performance.
    Overview of feasibility study results:

    [​IMG] The study supports a 360,000 tonnes per annum metallurgical process plant fed from a number of open pit operations all within 3 km of the metallurgical plant which could produce an average of 28,400 ounces of gold per annum over an eleven year production life. Construction is estimated to take one year. A 50 tonnes per hour capacity plant consisting of crushing and screening, comminution, conventional CIL and smelting is forecast to achieve an 89% recovery in dore bars.
    [​IMG] Average operating cash cost of US$643/ounce.
    [​IMG] Capital estimated at US$23.1 million with a payback period of two years.
    [​IMG] A robust project internal rate of return (IRR) of 39% and when discounted at 7% a net present value (NPV) of US$37.5 million at a base case gold price of US$1100.
    [​IMG] Mine construction is expected to be completed within nine months of project start-up.
    The Company has been investigating various avenues of financing for the project and these will which are anticipated to be finalised in due course.
    The opportunity exists to double the mine's capacity to exploit the additional resource already evaluated and any further ore resulting from ongoing discoveries. Initial incremental capital estimates for the expansion are US$5 million (to double capacity) and the plant layout has been designed to accommodate such expansion.
    Project Summary

    EPMC of Johannesburg, South Africa conducted the feasibility study to evaluate the economic potential of developing a small to medium scale mining operation at Shanta Gold's Chunya gold project in southern Tanzania. In doing so EPMC project managed the additional inputs from specific specialist consulting groups including Geologix (Pty) Ltd (ore resource consultants), Epoch Resources (Pty) Ltd (tailings design and EIA), Mintek (metallurgy), DRA Engineering Ltd (process design and infrastructure) and MINOPEX (Minerals Operations Executive (Pty) Limited) (process plant operations).
    The study demonstrated the feasibility of a series of open pits with a combined life in excess of 10 years, exploiting the resources delineated by Shanta during the past three years and calculated by Geologix, independent resource consultants to the Company. A key element in designing the mine has been to implement a selective mining strategy supported by grade control drilling across mining blocks of 3mx3m. The mined ore will be hauled to a 360,000 tonnes per annum capacity process facility, comprising a crushing and screening section, followed by a mill circuit and then a conventional carbon in leach ("CIL") circuit. Gold recovery will be by smelting to dore bars.
    The capital expenditure to develop the mine is estimated at about US$23.19 million. Capital recoupment is anticipated to be achieved within two years. This estimate is based on new equipment and Shanta plans to reduce capital through appropriate second hand purchasing.
    The feasibility study projects production of an average of 28,400 ounces of gold per annum at an average cash cost of US$643 per ounce. The level of annual gold production is dependent on the pit being exploited and rises from 28,000 ounces in Year 2 to 44,000 ounces in Year 8 and then decreases to the end of the mine life, when low grade stockpiles are processed.
    The project has an IRR of 39% and a NPV of US$37.53 million at a gold price of US$1,100 per ounce. At a 10% discount rate the NPV amounts to US$29.96 million. These results are based on constant money value modelling.
    Sensitivity analysis of a number of the key variables has demonstrated the project should be robust and be able to withstand changes in capital, operating cost gold price and grade.
    The project as designed does not fully exploit the possible resource upside at Chunya and potential exists to expand the plant capacity further, as well as to exploit additional open pittable resources that may be discovered through the ongoing exploration programme. This is demonstrated by the fact that the current open pit designs stop on high grade boundaries, and further drilling is thus expected to extend economic ore zones beyond existing pit designs. Possible extensions and new ore bodies currently being tested are described in an announcement released on 30 June 2010. A preliminary estimate of the capital required to double the capacity is US$5 million.
    Further upside is indicated by a common high grade zone in the core of most of the ore bodies that could in future be exploited by underground mining methods on completion of the economic open pit stage. This has not been considered in this study. Additionally, in the feasibility, no account has been taken of by- product silver, which occurs at a ratio of approximately 2:1 in the ore bodies.
    The Company proposes to use both contractor mining and contractor process operation and discussions are underway with competent contractors in this regard.
    Shanta Gold is exploring financing options for the development of the mine at Chunya and has a number of advanced discussions underway.
    Feasibility study financing

    The feasibility study was commissioned during May 2009, at the risk of third parties, and Shanta Gold entered into preliminary conditional agreements to raise finance to pay for the feasibility study from parties associated with the preparation there-of. Funds were to be raised at a price of 8p per share with a warrant attached for every two shares subscribed for with a strike price of 10p per warrant, such warrants to have a term of 2 years from the date of grant and to be exercised if the Shanta share price exceeds 15p for 15 consecutive trading days 12 months after the date of grant. The price of ordinary shares averaged 2.92p per share during the month of May 2009. Participants in the financing agreed not to dispose of the shares for 90 days from the date of allotment.
    DRA (process engineers to the feasibility study) subsequently agreed to accept shares in lieu of cash due for work completed directly for the feasibility study and agreed to contribute additional funding. Some participants in the fund raising required South African foreign exchange control approvals prior to providing the funds and agreements were dependant on this being obtained.
    As a result of the conditional agreements and described above, the Company has today agreed to issue a total of 11,540,033 shares at 8p per share and 5,770,016 warrants to the parties in connection with the financing and in lieu of fees due. Of the total issue of shares, 9,906,046 shares have been placed for cash to raise £792,483.68 (before expenses) and 1,633,987 shares have been issued in lieu of fees due to be paid in cash.
    DRA will receive 1,633,987 shares at 8p per share and 816,994 warrants in respect of work completed and 4,901,961 shares at 8p per share and 2,450,980 warrants in respect of the financing.
    Application will be made to the London Stock Exchange plc for 11,540,033 shares to be admitted to trading on AIM and it is expected that admission will take place at 8.00 a.m. on 9 July 2010. The shares will, when issued, rank pari passu in all respects with the Company's existing ordinary shares.
    Following the issue of 11,540,033 ordinary shares of 0.01p each as described above, the Company will have a total of 127,032,887 voting shares in issue.
    For further information, please contact:

    Shanta Gold Limited
    Walton Imrie
    Mobile: +27 (0) 82 444 2851

    David Scott
    Mobile: + 255 (0) 784 366146

    Gareth Taylor
    Mobile: +255(0)757732484

    Walter Vorwerk
    Moblie: +27 (0)83 308 0080

    Fairfax I.S. PLC
    Ewan Leggat / Laura Littley
    +44 (0) 20 7598 5368
  2. e

    elanoralph19 New Member

    Aug 3, 2011
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    Hey, I was actually searching for the books for writing good feasible business study plan but you got me here. I read your information and so much excited but still I can’t find good book in business study. Can you give me some links related to business study plan because I really need it next month there is this festival in my college and I want to give paper presentation in business plan category. , just need some guidance to win the contest.

    Business Feasibility Study