Shanta Gold swings to loss, completes placing

6th May 2016 14:58

(ShareCast News) - East Africa-focused gold producer Shanta Gold swung to a pre-tax loss of $18.1m in 2015 compared with a profit of $16.6m the year before as gold sales and revenue per ounce fell.Revenue fell to $95.7m from $114.9m as the average realised gold price dropped to $1,163 per ounce from $1,289.Chief executive officer Toby Bradbury said: "Shanta has had a positive 2015 which saw major re-engineering of its operations during the first half, allowing the company to exceed its annual production guidance and generate $35.0m of cash. These achievements reflect the true quality of its high grade resources and management team."While 2015 saw a lower gold price than the previous year, Shanta's position in the lowest cost quartile of gold producers ensures the company is able to withstand a continued volatile market while delivering significant margin into the business."Also on Friday, Shanta said it has conditionally placed a total of 111.44m new ordinary share at 6.5p each with certain existing and new institutional and other investors to raise around $10.5 (7.2m).Funds from the placing will be used to execute the base case mine plan, undertake the underground development of the New Luika Gold Mine and progress satellite deposit exploration.Bradbury said: "There was significant demand and the placement was well received by both existing and new institutional investors and we are grateful for their support."The proceeds significantly strengthen the company's financial position as we continue the development of the future underground operation at our flagship New Luika Gold Mine.''At 1510 BST, Shanta shares were down 9% to 6.82p.