Aim-listed Shanta Gold has reported earnings before interest, taxes, depreciation and amortisation of $23-million for the half year ended June 30, 2018,  up from $21.5-million in the first half of 2017.

This was achieved despite fewer ounces being sold in the half year and increased royalty charges brought into effect in the second half of 2017.

Revenue for the period of $50.2-million was generated predominantly from the sale of 37 827 oz of gold at an average price of $1 303/oz.

The company reported all-in sustaining costs of $757/oz in the period, higher than the $715/oz reported for the prior comparable period.

The increase reflects the transition to underground mining at the New Luika mine, in Tanzania, with first commercial production declared in June 2017, and includes the impact of higher royalties brought into effect in the second half of last year.

"I'm delighted to report a profit after tax for the period of $7.1-million for the half year. In the same period last year, we recorded a loss after tax of $2.1-million, showing the positive impact that our stringent cost focus strategy is having on the company for its shareholders," CEO Eric Zurrin said in a statement.

He added that, operationally, the company was doing well at New Luika – achieving a record monthly underground production in June and remaining on track to achieve its production guidance of 82 000 oz to 88 000 oz for the full year.

Gold production and grade in the period was lower than last year, partially offset by a higher average selling price in the period.

Capital expenditure amounted to $7.8-million, primarily being capitalised mining development costs.

Cash generated from operations before working capital was $22-million. Working capital increased by $9.5-million, driven predominantly by an increase in value-added tax receivable, an increase in volume of ore held on the run-of-mine stockpile and a decrease in payables.

During the period, the final $1.9-million tranche of the $7.5-million financing agreed with Exim Bank Tanzania in May 2017 was disbursed to the company.

The company incurred exploration costs of $800 000 in the period. This included the cost of drilling at both Bauhinia Creek at New Luika and at Singida.

The company announced an updated Joint Ore Reserves Committee-compliant mineral resource estimate at Singida in early June which showed an increase in measured and indicated resources to 5.7-million tonnes of gold at 2.08 g/t for 381 000 oz of gold. 

The Singida mineral resource incorporates three mining licences and is based on seven shear zone related gold deposits with a combined strike length of 4.9 km.

"In addition to a strong operational performance and with a vision to increase our mine life, we have achieved a number of exploration successes in the first half of this year. At New Luika, we completed phase one underground drilling at Bauhinia Creek, confirming the extension of high-grade mineralisation adjacent to our existing underground operation.

“At our second asset, Singida, we also announced two phases of exploration drilling results with encouraging intersections and I look forward to providing further updates on the project in the second half of the year," he said.