Shanta Gold Completes Chunya Feasibility Study >SHG.LN

6th Jul 2010 07:36

LONDON (Dow Jones)--Shanta Gold Ltd. (SHG.LN), which invests in gold exploration in Tanzania, said Tuesday it has completed its Feasibility Study on the Chunya gold project in the Lupa goldfield in southern Tanzania. MAIN FACTS: -Study supports a 360,000 tons 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 tons per hour capacity plant consisting of crushing and screening, comminution, conventional CIL and smelting is forecast to achieve an 89% recovery in dore bars. -Average operating cash cost of $643/ounce. -Capital estimated at $23.1 million with a payback period of two years. -Project internal rate of return of 39% and when discounted at 7% a net present value of $37.5 million at a base case gold price of $1100. -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 finalized 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 $5 million (to double capacity) and the plant layout has been designed to accommodate such expansion. -Company has agreed to issue 11,540,033 shares at 8 pence per share and 5,770,016 warrants to the parties in connection with the financing and in lieu of fees due. -9,906,046 shares have been placed for cash to raise GBP792,483. -Shares closed Monday at 19.5 pence. -By Tommy Stubbington, Dow Jones Newswires; 44-20-7842-9268; [email protected] (END) Dow Jones Newswires July 06, 2010 02:36 ET (06:36 GMT)