TIDMSHG
RNS Number : 9477J
Shanta Gold Limited
27 August 2021
27 August 2021
Shanta Gold Limited
("Shanta Gold" or the "Company")
Interim results for the six months ended 30 June 2021
Shanta Gold (AIM: SHG), the East Africa-focused gold producer,
announces its unaudited interim financial results for the six
months ended 30 June 2021 ("H1" or the "Period"). The Company's
asset portfolio includes New Luika Gold Mine ("NLGM" or "New
Luika") and Singida Project ("Singida") in Tanzania and West Kenya
Project ("West Kenya") in Kenya.
H1 2021 HIGHLIGHTS
Financial
-- Revenue of US$57.8 million ("m") (H1 2020: US$73.0 m);
-- EBITDA(1) of US$17.4 m (H1 2020: US$27.5 m);
-- Profit before taxation of US$8.6 m (H1 2020: US$15.3 m);
-- Profit after taxation of US$3.1 m (H1 2020: US$1.0 m);
-- Maiden final dividend of 0.10 pence per share paid in April
2021, with an interim dividend proposed of 0.10 pence per share,
payable in October 2021;
-- Operating cash flow before movement in working capital of US$16.6 m (H1 2020: US$29.8 m);
-- Group wide exploration spend of US$4.6 m (H1 2020: US$1.4 m);
-- Capital expenditure of US$11.5 m (H1 2020: US$7.4 m);
o Including Singida capital development spend of US$3.8 m (H1
2020: Nil)
-- Net cash(2) of US$24.2 m (FY 2020: US$37.3 m);
-- Gross debt of US$0.8 m (FY 2020: US$11.4 m);
o Convertible loan notes and debt facility with Exim Bank repaid
in full;
-- VAT receivable due to the Company of US$27.4 m (FY 2020: US$27.6 m);
o US$4.2 m offset against H2 2020 corporation tax liability in
the Period;
o US$2.1 m cash VAT refund received post Period;
-- All In Sustaining Costs ("AISC") of US$1,338 /oz (including
US$177 /oz in relation to development costs) in line with
reiterated annual guidance of US$1,325 - 1,375 /oz; and,
-- Shanta has engaged an external consultant to assist with the
preparation of its 2021 Sustainability Report, which is expected to
be published later this year and will detail our ambitions for
increasing the Company's positive impact in the future.
Operational
-- Gold production of 28,842 oz (H1 2020: 42,383 oz);
-- No lost time injuries ("LTI's") during the Period, with zero LTI's since Q4 2017;
-- Precautionary measures in place to reduce the risks posed by COVID-19; and,
-- Reiterated annual production guidance for 2021 of 60,000 - 65,000 oz.
West Kenya
-- Phase 1 drilling programme completed with highly encouraging assay results received;
-- Third drill rig to be on site by the end of August and Phase 2 drilling is underway;
-- Resource update expected to be released in September, focused
on approximately 10% of the total NI43-101 Inferred resource of 1.2
Moz between 0-200 metres in depth;
-- The Company is supporting a local project subsidising
National Hospital Insurance Fund ("NHIF") subscriptions for 300
low-income women local to the West Kenya Project; and,
-- Vocational security guard training for 50 participants in
partnership with a local security company, with a second programme
now underway.
Singida
-- Mine construction progressing with detailed designs and
tenders for key infrastructure ongoing;
-- Manufacture of the Ball Mill underway;
-- US$2.0 m paid towards manufacture of the Crushing Circuit, which is nearing completion;
-- Onsite works continue with bush clearance and installation of
mine infrastructure underway; and,
-- Pre-stripping due to commence in Q3 2021.
Exploration - New Luika
-- Assay results received from the Luika deposit added 76,461 oz
of new Indicated resources grading 7.97 g/t;
-- Resource block model update for BC East Area 1 added 39,786
oz of new Indicated resources grading 4.74 g/t, announced post
Period; and,
-- In aggregate, results from the two targets added 116,247 oz
of new resources at NLGM (before depletion) grading 6.47 g/t, at a
cut-off grade of 1.0 g/t Au.
Interim Dividend
-- Interim dividend of 0.10 pence per share proposed, payable on
29 October 2021. The associated record date is 8 October 2021 and
the ex-div date is 7 October 2021.
Post Period
-- Shanta announced a new five-year plan ("the Plan") for its
gold assets in Tanzania on 19 July 2021, including a reserves and
resources update for NLGM;
-- The Plan forecasts group-wide gold production from Shanta's
Tanzanian assets of approximately 499,000 oz for the five-year
period from H2 2021 - H1 2026; and,
-- US$2.1 m cash VAT refund received post Period.
Note: 1. EBITDA is earnings before interest, tax, depreciation
and amortisation which has been derived as operating profit
exclusive of depreciation/depletion of tangible assets and
amortisation of intangible assets.
Note: 2. Net cash includes liquidity available from 65 oz unsold
at the refinery at 30 June 2021 (FY 2020: 75 oz unsold at the
refinery and 3,701 oz in transit).
Note: 3. Available liquidity has been derived as unrestricted
cash plus the sale value of bullion available for sale at the end
of the Period (net of royalties and expected selling costs).
Eric Zurrin, Chief Executive Officer, commented:
"Shanta's exploration success during H1 has generated new
high-grade resources at Luika and BC East Area 1. West Kenya is
also proving to be very promising with phase 1 drilling now
complete and highly encouraging assay results including one of our
highest-grade intersections at 4m at 706 g/t. We continue to be
excited by the prospects of West Kenya and we look forward to
announcing a Resource Update in September.
Whilst we are disappointed that our H1 gold production and sales
are lower than last year, our strong fundamentals of net cash, low
debt and consistent operating cashflow attest to the Company's
robust financial health, and I'm delighted to announce an interim
dividend of 0.10 pence per share proposed for payment in October
2021. We are also pleased to confirm that we have received US$4.2
million in VAT offsets during H1 and a further $2.1 million VAT
cash refund post Period as we work with the Tanzanian government to
clear the outstanding balance.
Our new five-year plan outlines our strategy to transform the
business into a 110,000+ ounces gold producer by 2023. Our forecast
increase in reserves and resources demonstrates the huge potential
in the portfolio, and our extension of the reserve-based mine life
at New Luika and Singida underpins our confidence in the long-term
sustainability of both assets."
Enquiries:
Shanta Gold Limited
+44 (0) 14 8173
Eric Zurrin (CEO) 2153
Luke Leslie (CFO)
Nominated Adviser and Joint Broker
Liberum Capital Limited
+44 (0) 20 3100
Scott Mathieson / Ed Thomas / Nikhil Varghese 2000
Joint Broker
Tamesis Partners LLP
+44 (0) 20 3882
Charlie Bendon / Richard Greenfield 2868
Public Relations
FTI Consulting
Sara Powell / Genevieve Ryan +44 (0) 20 3727 1426
About Shanta Gold
Shanta Gold is an East Africa-focused responsible gold producer,
developer and explorer. The company has an established operational
track record, with defined ore resources on the New Luika and
Singida projects in Tanzania, with reserves of 666 koz grading 3.0
g/t, and exploration licences covering approximately 1,100 km(2) in
the country. Alongside New Luika and Singida, Shanta also owns the
West Kenya Project in Kenya with defined inferred resources of 1.2
Mt grading 12.6 g/t and licences covering approximately 1,162 km(2)
. With a strong balance sheet, a growing diversified portfolio and
a maiden dividend paid in 2021, Shanta offers a resilient
investment opportunity for the near and long-term. Shanta is quoted
on London's AIM market (AIM: SHG) and has approximately 1,048
million shares in issue.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as amended by the
Market Abuse (Amendment) (EU Exist) Regulations 2019.
Financial Performance
Revenue for the Period of US$ 57.8 m (H1 2020: US$73.0 m) was
generated from the sale of 31,977 oz (H1 2020: 44,018 oz). The
average realised price from gold sales in the Period was US$1,807
/oz (H1 2020: US$1,533 /oz). Revenue for H1 2021 was 21 % lower
than for H1 2020 reflecting the decrease in ounces sold, partially
offset by a higher average selling price. Gold production of 28,842
oz (H1 2020: 42,383 oz) was lower than H1 2020, due to lower than
anticipated grades from underground mining.
Cost of sales for the Period amounted to US$ 39.3 m, down 10 %
from US$43.9 m in H1 2020. This decrease was driven by a US$3.5 m
reduction in depreciation charged to cost of sales and a US$1.0 m
decrease in Other cost of sales, compared to H2 2020. The decrease
in Other cost of sales was primarily driven by lower royalties and
selling costs in line with the reduction in ounces sold.
Administration expenses amounted to US$4.5 m, up 25% from US$3.6
m in H1 2020. This was driven by the introduction of US$1.0 m
administrative costs at West Kenya, which was acquired in H2 2020.
Exploration and evaluation costs amounted to US$ 4.6 m, higher than
US$1.4 m recorded in H1 2020 and consistent with the Company's
expansive exploration programme and budget for 2021. The increase
was partly driven by new exploration costs at West Kenya of US$1.7
m.
Operating profit for the Period was US$ 9.4 m (H1 2020: US$15.8
m) for H1 2020. EBITDA for the Period was US$ 17.4 m (H1 2020:
US$27.5 m).
Finance costs reduced to US$ 0.9 m (H1 2020: US$1.8 m), in line
with the Company's debt repayments.
A profit before tax of US$ 8.6 m was recorded for the Period (H1
2020: US$15.3 m). Profit after tax for the Period was US$ 3.1 m (H1
2020: US$1.0 m), resulting in a basic earnings per share of
US$0.299 cents (H1 2020: US$0.132 cents). Taxation for the Period
of US$5.4 m comprised a current tax charge of US$4.6 m and a
deferred tax charge of US$0.8 m. Further information on taxation
for the Period is included below in Note 3 to the Consolidated
Financial Information.
Adjusted Operating Costs of US$1,009 /oz and AISC of US$1,338
/oz (including US$177 /oz in relation to development costs) were
achieved in the Period, in line with reiterated annual guidance of
US$1,325 - 1,375 /oz .
Financial Position
Total liabilities reduced by US$22.0 m in the Period, driven
primarily by a US$9.6 m reduction in income tax payable, repayment
of loans and borrowings which decreased by US$4.6 m, and a US$9.8 m
buyback of all outstanding convertible loan notes. These movements
were offset by an increase in trade payables and accruals of US$1.1
m, an US$0.7 m increase to the provision for deferred taxation, and
an US$0.3 m increase to the provision for decommissioning in the
Period. Gross debt was reduced from US$11.4 m at the beginning of
the Period to US$0.8 m. The Company had net cash of US$24.2 m at
the end of the Period.
Inventories were US$26.0 m at the end of the Period, down from
US$30.0 m at 31 December 2020. This included 1,908 oz of gold
bullion available for sale at the end of the Period (3,775 oz at 31
December 2020). The value of spares and consumables decreased by
US$1.4 m during the Period.
Trade and other receivables (current and non-current) amounted
to US$31.7 m at the end of the Period, down US$0.5 m from 31
December 2020. This includes the Company's VAT receivable which
decreased by US$0.2 m to US$27.4 m. During the Period US$4.2 m of
VAT receivables were offset against the Company's 2020 corporation
tax liability in Tanzania. Remaining VAT receivables are subject to
verification audit by the TRA before being available for further
offsets and are treated as a non-current asset.
Cash flow
Gold production and sales in the Period were 32% and 27% lower
than H1 2020 respectively. The reduced production was driven by
lower than anticipated grades from underground mining. Capital
expenditure amounted to US$11.5 m, including US$5.1 m of
capitalised mine development costs and US$3.8 m at Singida.
Cash generated from operations before working capital amounted
to US$16.6 m in the Period. Working capital decreased by US$5.6 m ,
accounted for by a decrease in inventories (US$4.0 m), a decrease
in trade and other receivables of US$0.5 m and an increase in trade
and other payables (US$1.1 m).
The Company's unrestricted cash balance at 30 June 2021 was
US$24.8 m, down from US$41.6 m at 31 December 2020. Net cash at the
end of the Period amounted to US$24.2 m (FY 2020: US$37.3 m). This
decrease was primarily driven by significant debt repayments, the
buyback of convertible loan notes, corporation tax payments,
capital expenditure and increased exploration activity in the
Period.
Singida
Construction of Singida Gold Mine progressed in line with
expectations, with work on detailed designs for key project
equipment and tenders for major contracts advancing. Several
contracts for important plant equipment were awarded, including for
the manufacture of a Ball Mill, and a Crushing Circuit for
Singida's processing plant. The manufacture of the Crushing Circuit
is tracking ahead of schedule, and instalments of US$2.0 m were
paid during the Period. Pre-stripping is due to commence at site
during Q3 2021.
Key recruitment during the Period included a new Safety Officer,
Construction Manager and Community and Liaison Officer. Shanta is
committed to supporting local employment and is recruiting from
villages surrounding the mine site wherever possible.
The Company is focused on bringing a positive impact within the
surrounding Ikungi region and several CSR initiatives are now
underway, including the construction of a classroom block at the
Mangonyi Secondary School which Shanta supported during the
Period.
West Kenya Project
Exploration works at West Kenya continued during the Period,
with 9,383 metres of completed drilling marking the end of the
first of three drilling phases in the Period. Phase 2 drilling is
now underway, and the number of drill rigs mobilised to West Kenya
will be increased to three by the end of August. The Company
remains on track to complete approximately 35-40% of total planned
drilling by the end of 2021. Exploration activities will continue
throughout H2 2021, with the Company focusing on converting
Inferred resources to the Indicated category.
The Company is committed to supporting socioeconomic growth
through its operations in Kenya. Shanta conducted a vocational
guard training programme during the Period in partnership with KK
Security, where 44 out of 50 graduates received full-time job
offers. Following the success of this trial, an additional guard
training programme is now underway for 50 individuals.
The Company is also supporting the i-PUSH project in partnership
with PharmAccess Foundation and AMREF. This programme aims to
empower low-income communities in Kenya to effectively finance
their health requirements. Shanta has made a financial contribution
to the project to help subsidise annual NHIF subscriptions for 300
low-income women. The Company plans to expand its Kenyan CSR
initiatives in the near-term to drive local development and support
growth in the area.
Exploration - New Luika
Assay results were received during the Period for exploration
drilling at the Luika and Porcupine South deposits, and additional
exploration drilling was completed at BC East Area 1 with assay
results received post Period. Results received from Luika and BC
East Area 1 added 116,247 oz to Indicated Resources at New Luika
(before depletion) grading 6.47 g/t, at a cut-off grade of 1.0 g/t
Au. The drilling campaign at BC East Area 1 is continuing, with the
goal of testing the downdip continuity of a potential westerly
plunging mineralized shoot. Drilling at Porcupine South will also
continue in H2 2021 with the goal of generating additional Inferred
resources and converting existing Inferred resources into the
Measured and Indicated categories.
Interim Dividend
Following consideration of the Company's financial condition and
outlook, the Board has proposed an interim dividend of 0.10 pence
per share (H1 2020: Nil) expected to be paid on 29 October 2021.
This interim dividend, which will be paid gross, is expected to
align with the following proposed timetable:
Ex-div date: 7 October 2021
Record date: 8 October 2021
Payment date: 29 October 2021
Post Period
Shanta announced a new five-year plan for its gold assets in
Tanzania on 19 July 2021, developed using the latest understanding
of the ore bodies at NLGM. The Plan forecasts group-wide gold
production from Shanta's Tanzanian assets of approximately 499,000
oz for the five-year period from H2 2021 - H1 2026.
A further US$2.1 m VAT refund has been received post Period in
the form of a cash payment to the Company.
Outlook
Annual production guidance for 2021 is 60,000 - 65,000 oz at
AISC of US$1,325 - 1,375 /oz.
SHANTA GOLD LIMITED
Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2021
6 months 6 months Year
ended ended ended
30-Jun-21 30-Jun-20 31-Dec-20
US$'000 US$'000 US$'000
Note Unaudited Unaudited Audited
Revenue 57,772 72,974 147,431
Loss on non-hedge derivatives - (8,307) (11,688)
---------- ---------- ----------
Depreciation (7,757) (11,271) (19,361)
Other cost of sales (31,540) (32,589) (59,664)
---------- ---------- ----------
Cost of sales (39,297) (43,860) (79,025)
---------- ---------- ----------
Gross profit 18,475 20,807 56,718
Administration expenses (4,548) (3,639) (8,156)
Exploration and evaluation costs (4,558) (1,365) (4,809)
---------- ---------- ----------
Operating profit 9,369 15,803 43,753
Finance income 42 1,273 1,870
Finance expense (861) (1,751) (6,622)
---------- ---------- ----------
Profit before taxation 8,550 15,325 39,001
Taxation 3 (5,421) (14,281) (21,798)
Profit for the Period / year
attributable to equity holders
of the parent company 3,129 1,044 17,203
========== ========== ==========
Profit after taxation 3,129 1,044 17,203
Other comprehensive income:
Exchange differences on translating
subsidiary which can subsequently
be reclassified to profit or
loss - - -
---------- ---------- ----------
Total comprehensive profit attributable
to equity shareholders of parent
company 3,129 1,044 17,203
========== ========== ==========
Basic earnings per share (US$
cents) 4 0.299 0.132 2.023
Diluted earnings per share (US$
cents) 4 0.299 0.132 2.018
====== ====== ======
SHANTA GOLD LIMITED
Consolidated Statement of Financial Position
As at period ended 30 June 2021
30-Jun 30-Jun 31-Dec
2021 2020 2020
US$'000 US$'000 US$'000
Note Unaudited Unaudited Audited
Non-current assets
Intangible assets 43,343 23,367 43,343
Property, Plant and Equipment 81,358 78,519 77,449
Right of use assets 2,795 2,349 3,260
Other receivables 27,417 23,198 27,560
Total non-current assets 154,913 127,433 151,612
---------- ---------- ---------
Current assets
Inventories 25,998 23,361 30,040
Trade and other receivables 4,275 3,569 4,649
Restricted Cash - 2,500 2,500
Cash and cash equivalents 24,839 12,945 41,582
Total current assets 55,112 42,375 78,771
---------- ---------- ---------
Total assets 210,025 169,808 230,383
========== ========== =========
Capital and reserves
Share capital and premium 211,506 159,067 210,493
Share option reserve 338 473 338
Convertible loan note
reserve - 5,374 5,374
Shares to be issued - - 1,043
Translation reserve 450 450 450
Retained deficit (44,727) (68,070) (51,776)
Total equity 167,567 97,294 165,922
---------- ---------- ---------
Non-Current liabilities
Loans and borrowings 5 3,573 2,362 4,270
Provision for decommissioning 6,642 6,797 6,346
Provision for deferred
taxation 11,229 12,470 10,451
Total non-current liabilities 21,444 21,629 21,067
---------- ---------- ---------
Current liabilities
Trade and other payables 13,295 9,383 12,208
Derivative financial liability - 14,120 -
Loans and borrowings 5 1,816 7,654 5,713
Convertible loan notes - 9,876 9,999
Income tax payable 5,903 9,852 15,474
---------- ---------- ---------
Total current liabilities 21,014 50,885 43,394
---------- ---------- ---------
Total liabilities 42,458 72,514 64,461
---------- ---------- ---------
Total equity and liabilities 210,025 169,808 230,383
========== ========== =========
SHANTA GOLD LIMITED
Consolidated Statement of Changes in Equity
for the six months ended 30 June 2021
Share Share Share Convertible Translation Shares to Retained Total
Capital Premium Option Debt Reserve be Issued Deficit Equity
Reserve Reserve Reserve
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
At 1 January
2021 149 210,344 338 5,374 450 1,043 (51,776) 165,922
Profit for the
Period - - - - - - 3,129 3,129
Share based
payments 1 1,012 - - - (1,043) 30 -
Reserve
transfer - - - (5,374) - - 5,374 -
Dividends paid - - - - - - (1,484) (1,484)
--------------- ---------- ----------- ------------ ------------ -----------
At 30 June
2021
(Unaudited) 150 211,356 338 - 450 - (44,727) 167,567
--------------- ---------- ----------- ----------- ------------ ------------ ----------- --------- -----------
At 1 January
2020 118 158,322 473 5,374 450 627 (69,114) 96,250
Profit for the
Period - - - - - - 1,044 1,044
Share based
payments - 627 - - - (627) - -
At 30 June
2020
(Unaudited) 118 158,949 473 5,374 450 - (68,070) 97,294
--------------- ---------- ----------- ----------- ------------ ------------ ----------- --------- -----------
At 1 January
2020 118 158,322 473 5,374 450 627 (69,114) 96,250
Profit for the
year - - - - - - 17,203 17,203
Other
comprehensive
income for the
year - - - - - - - -
Share based
payments - 627 - - - 416 - 1,043
Lapsed options - - (135) - - - 135 -
Shares issued
(net of
expenses) 31 51,395 - - - - - 51,426
At 31 December
2020
(Audited) 149 210,344 338 5,374 450 1,043 (51,776) 165,922
--------------- ---------- ----------- ----------- ------------ ------------ ----------- --------- -----------
SHANTA GOLD LIMITED
Consolidated Statement of Cash flows
for the six months ended 30 June 2021
6 months 6 months Year
ended ended ended
30-Jun-21 30-Jun-20 31-Dec-20
US$'000 US$'000 US$'000
Note Unaudited Unaudited Audited
Net cash flows from operating
activities 6 8,059 27,116 34,608
Investing activities
Purchase of intangible assets - - (8,549)
Purchase of plant and equipment (237) (278) (142)
Purchase of right of use assets - - (260)
Purchase of assets under construction (6,675) (1,914) (4,654)
Capitalised mine development expenditure (4,561) (5,240) (8,543)
Net cash flows used in investing
activities (11,473) (7,432) (22,148)
---------- ---------- ----------
Financing activities
Ordinary shares issued (net of
expenses) - - 39,996
Loans repaid (2,655) (8,216) (10,987)
Buyback of convertible loan notes (9,807) - -
Principal paid on lease liabilities (736) (576) (1,087)
Interest paid (790) (1,122) (1,975)
Dividends paid (1,484) - -
Movements in restricted cash 2,500 - -
Purchase of silver to fulfil silver
stream obligation (357) (331) (331)
Net cash flows (used in) / received
from financing activities (13,329) (10,245) 25,616
---------- ---------- ----------
Net (decrease) / increase in cash
and cash equivalents (16,743) 9,439 38,076
Cash and cash equivalents at beginning
of Period / year 41,582 3,506 3,506
Cash and cash equivalents at end
of Period / year 24,839 12,945 41,582
========== ========== ==========
SHANTA GOLD LIMITED
Notes to the Consolidated Financial Information
for the six months ended 30 June 2021
1. General information
Shanta Gold Limited (the "Company") is a limited company
incorporated in Guernsey. The Company is listed on the London Stock
Exchange's AIM market. The address of its registered office is 11
New Street, St Peter Port, Guernsey, GY1 2PF. The interim
consolidated financial information was approved by the Board and
authorised for issue on 26 August 2021.
2. Basis of preparation
The consolidated interim financial information has been prepared
using policies based on International Financial Reporting Standards
(IFRS and IFRIC interpretations) issued by the International
Accounting Standards Board ("IASB") as adopted for use in the EU.
The consolidated interim financial information has been prepared
using the accounting policies which will be applied in the Group's
financial statements for the year ending 31 December 2021.
Based on a review of the Group's budgets, cashflow forecasts and
its ability to flex its forecast spending to suit prevailing
circumstances, the Directors consider that the Group has adequate
resources to continue its operational existence for the foreseeable
future. Notwithstanding the Group's current strong financial
performance and position, the Board are cognisant of the potential
impacts of COVID-19 on the Group. To date, there has been little
impact of COVID-19 on the Group's operations and, whilst the
potential future impacts are unknown, the Board has considered the
operational disruption that could be caused by factors such as
illness amongst our workforce and potential disruptions to supply
chain, factoring in these potential impacts and reasonable
mitigating actions to forecasts and sensitivity scenarios.
At 30 June 2021 the Group had an unrestricted cash balance of
US$24.8 million and net cash of US$24.2 million and the Group has
sufficient operating cashflows to continue to operate for the
foreseeable future. The Directors have concluded that these
circumstances form a reasonable expectation that the Group has
adequate resources to continue in operational existence, for the
foreseeable future. For these reasons, the Directors continue to
adopt the going concern basis in preparing the consolidated interim
information.
The consolidated interim financial information for the six
months ended 30 June 2021 has been reviewed by the Company's
Auditor, BDO LLP in accordance with International Standard of
Review Engagements 2410, Review of Interim Financial Information
Performed by the Independent Auditor of the Entity and were
approved for issue on 26 August 2021. The consolidated interim
financial information for the Period 1 January 2021 to 30 June 2021
are unaudited and incorporate unaudited comparative figures for the
interim Period 1 January 2020 to 30 June 2020 and the audited
comparative figures for the year to 31 December 2020. It does not
include all disclosures that would otherwise be required in a
complete set of financial statements and should be read in
conjunction with the 2020 Annual Report.
The half year financial information for the six months ended 30
June 2021 set out in this document does not comprise the Group's
statutory accounts as defined in the Companies (Guernsey) Law, 2008
and accordingly this half year financial information is not
considered to be the company's statutory accounts. The statutory
accounts for the year ended 31 December 2020, which were prepared
under EU endorsed IFRS, were reported on by the auditors; their
report was unqualified and did not include reference to any matters
to which the auditor drew attention by way of emphasis.
SHANTA GOLD LIMITED
Notes to the Consolidated Financial Information
for the six months ended 30 June 2021 (continued)
The same accounting policies, presentation and methods of
computation are followed in the interim consolidated financial
information as were applied in the Group's latest annual audited
financial statements except for those that relate to new standards
and interpretations effective for the first time for periods
beginning on (or after) 1 January 2021, and will be adopted in the
2021 annual financial statements.
The following new standards and interpretations became effective
on 1 January 2021 and have been adopted by the Group. None of these
amendments are considered to have had a material effect in the
Period.
-- IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest rate benchmark reform Phase 2
-- IFRS 16: Covid-19 related rent concessions
-- IFRS 17 and IFRS 4: Deferral of effective date of IFRS 9
-- IAS 1 Presentation of financial statements: classification of liabilities
2.1 Licencing costs
In accordance with the Company's accounting policies, licences
which are viable and within the licence renewal process are not
considered impaired. At Singida, the Company's mining licences are
due to expire on 19 January 2022 and are renewable for a period not
exceeding 10 years. The Directors have no reason to believe renewal
will not be granted.
The Group's Lupa Goldfields licences are considered to be a
single CGU and are assessed collectively. Management have concluded
that, whilst the number of active licences has reduced in the
Period, no impairment has been identified in respect of these.
3. Taxation
Effective 1 January 2008, the Company is taxed at the standard
rate of income tax for Guernsey companies which is 0%. Taxation for
other jurisdictions is calculated at the rates prevailing in the
respective jurisdictions.
Tax charge for the Period relates to:
30-Jun-21 30-Jun-20 31-Dec-20
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Current tax charge (Corporate
and turnover tax charge) 4,643 8,269 17,742
Adjustments in respect of
prior periods - 4,060 4,124
Deferred tax charge 778 1,952 (68)
Net charge 5,421 14,281 21,798
========== ========== ==========
The tax charge for the Period can be reconciled to the profit /
(loss) before taxation per the statement of comprehensive income as
follows:
SHANTA GOLD LIMITED
Notes to the Consolidated Financial Information
for the six months ended 30 June 2021 (continued)
30-Jun-21 30-Jun-20 31-Dec-20
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Profit / (Loss) before taxation 8,550 15,325 39,001
---------- ---------- ----------
Tax at the standard tax
rate
Tanzanian Corporation tax
at 30% 2,565 4,598 11,700
Different tax rates applied
in overseas jurisdictions 859 637 1,376
Permanent adjustments 1,727 4,866 3,718
Unrecognised taxable losses
in subsidiaries 270 120 880
Adjustments in respect of
prior periods - 4,060 4,124
Tax charge 5,421 14,281 21,798
========== ========== ==========
The deferred tax charge for the Period relates primarily to
temporary differences arising between the carrying value and the
tax written down value of assets. During the Period US$4.2 m of VAT
receivables were offset against the Company's brought forward
corporation tax liability in Tanzania
4. Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to the ordinary shareholders by the weighted average
number of ordinary shares outstanding during the Period/year.
There were no share incentives outstanding at the end of the
Period that could potentially dilute basic earnings per share in
the future.
At 30 June 2020 there were no share incentives outstanding that
could potentially dilute basic earnings per share in the future. At
31 December 2020 the Group had instruments which could potentially
dilute basic earnings per share in the future in the form of shares
to be issued. These were in relation to performance bonuses payable
to management and senior employees in respect of 2020 and were
issued on 27 January 2021.
Unaudited Unaudited Audited
30-Jun-21 30-Jun-20 31-Dec-20
Profit Weighted Per Profit Weighted Per share Profit Weighted Per share
avg no share avg no amount avg no amount
of shares amount of shares of shares
US$'000 ('000) (Cents) US$'000 ('000) (Cents) US$'000 ('000) (Cents)
----------- -------- ----------- -------- -------- ------------ ---------- -------- ------------ ----------
Basic
earnings 3,129 1,047,508 0.299 1,044 791,410 0.132 17,203 850,274 2.023
----------- -------- ----------- -------- -------- ------------ ---------- -------- ------------ ----------
Diluted
earnings 3,129 1,047,508 0.299 1,044 791,410 0.132 17,203 852,666 2.018
----------- -------- ----------- -------- -------- ------------ ---------- -------- ------------ ----------
SHANTA GOLD LIMITED
Notes to the Consolidated Financial Information
for the six months ended 30 June 2021 (continued)
5. Loans and borrowings
30-Jun-21 30-Jun-20 31-Dec-20
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Amounts payable within one
year
Silver stream (a) 1,188 1,550 1,899
Loans payable to Exim Bank
less than 1 year (b) - 5,395 2,636
Equipment loan - 55 -
Lease Liabilities 628 654 1,178
1,816 7,654 5,713
========== ========== ==========
Amounts payable after one
year
Silver stream (a) 3,240 2,136 3,691
Lease liabilities 333 226 579
3,573 2,362 4,270
====== ====== ======
(a) Silver Stream
The Company entered into a silver streaming agreement ("SSA")
with Silverback Limited ("Silverback"), a privately held
Guernsey-based investment company, under which Silverback paid the
Company an advanced payment of US$5.25 million on closing.
Silverback will also pay the Company an ongoing payment of 10 per
cent of the value of silver sold at the prevailing silver price at
the time of deliveries which will be made annually. The SSA relates
solely to silver by- product production from New Luika with minimum
silver delivery obligations totalling 608,970oz Ag over a 6.75-year
period from April 2016 until December 2022. There is a requirement
to settle any shortfall in silver delivery from the minimum
obligation in cash. The term of the SSA is 10 years from April 2016
until March 2026 during which time the Company will sell silver to
Silverback and receive ongoing payments of 10% of the silver sold
at the prevailing silver price. However, the Company has no minimum
ounce obligations after 2022. The liability is calculated using the
forward silver price and interest at the effective rate is imputed
interest. The SSA includes a clause under which the percentage of
the Company's silver production that it is obliged to deliver to
Silverback can be reduced in the event of a capacity expansion to
the processing plant at New Luika. Such an expansion occurred
during H1 2021 and the Company's ongoing commitment to Silverback
has been reduced to reflect this.
(b) Loans Payable to Exim Bank
The Company entered into a US$10.0 million financing from Exim
Bank (Tanzania) Limited ("EXIM") following the commissioning in
March 2017 of its 7.5 Mega Watts ("MW") Power Station at New Luika.
This facility comprised US$7.5 million long term funding and US$2.5
million short-term funding for working capital, with the four-year
term loan bearing variable interest at 7.25% per annum (2.75% below
the Exim Base Lending Rate). Both facilities were fully repaid in
the Period.
SHANTA GOLD LIMITED
Notes to the Consolidated Financial Information
for the six months ended 30 June 2021 (continued)
6. Net Cash flows from Operating activities
30-Jun 30-Jun 31-Dec
2021 2020 2020
US$'000 US$'000 US$'000
Unaudited Unaudited Audited
Profit before tax 8,550 15,325 39,001
Adjustments for:
Depreciation / depletion of
assets 7,564 11,048 18,956
Amortisation of right of use
assets 465 599 1,163
Amortisation / write off of
intangible assets - 11 14
Share based payment costs - - 1,043
Loss on non-hedge derivatives
and other commodity contracts - 2,816 -
Unrealised exchange (gains)
/ losses (60) 122 75
Non-cash settlement of Silver
Stream obligation (739) (905) (2,207)
Finance income - decommissioning
provision (40) (1,273) (1,850)
Finance expense 861 2,082 6,622
Operating cash inflow before
movement in working capital 16,601 29,825 62,817
Movements in working capital:
Decrease / (Increase) in inventories 4,042 3,729 (2,950)
(Increase) in receivables (3,677) (2,514) (7,705)
Increase / (Decrease) in payables 1,086 (2,924) (11,404)
-------- -------- ---------
18,052 28,116 40,758
Taxation paid (9,993) (1,000) (6,170)
Interest received - - 20
-------- ---------
Net cash flow from operating
activities 8,059 27,116 34,608
======== ======== =========
INDEPENDENT REVIEW REPORT TO SHANTA GOLD LIMITED
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2021 which comprises the consolidated
statement of comprehensive income, consolidated statement of
financial position, consolidated statement of changes in equity,
consolidated statement of cash flows and related notes.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The interim report, including the financial information
contained therein, is the responsibility of and has been approved
by the directors. The directors are responsible for preparing the
interim report in accordance with the rules of the London Stock
Exchange for companies trading securities on AIM which require that
the half-yearly report be presented and prepared in a form
consistent with that which will be adopted in the Company's annual
accounts having regard to the accounting standards applicable to
such annual accounts.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Financial Reporting Council for use
in the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2021 is not prepared, in all material respects, in accordance
with the rules of the London Stock Exchange for companies trading
securities on AIM.
Use of our report
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting the requirements of the
rules of the London Stock Exchange for companies trading securities
on AIM and for no other purpose. No person is entitled to rely on
this report unless such a person is a person entitled to rely upon
this report by virtue of and for the purpose of our terms of
engagement or has been expressly authorised to do so by our prior
written consent. Save as above, we do not accept responsibility for
this report to any other person or for any other purpose and we
hereby expressly disclaim any and all such liability
BDO LLP
Chartered Accountants
London
26 August 2021
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
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END
IR DQLFLFVLFBBQ
(END) Dow Jones Newswires
August 27, 2021 02:00 ET (06:00 GMT)
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