The study shows that a mine producing 45,000 ounces of gold per year at a capital cost of $39m and an average escalated operating cost of $412 per ounce, and based on a $1,200 per ounce gold price an 11% discount rate, will generate a net present value of about $130m and will have an internal rate of return of 126%.
According to Shanta, the results from the Singida feasibility study show attractive investment outcomes and will allow the company to proceed to project construction.
Shanta executive chairman Walton Imrie said Singida will enable Shanta to transform into a mid-tier gold producer by 2013, as the company’s annual gold production will increase to more than 100,000 ounces once the new project is in production alongside the New Luika gold mine.
The New Luika gold mine, currently in the final phase of construction, is expected to generate sufficient funds for the construction of the Singida mine during 2012, the company said.
