The company now expects to produce first ore from the project in
mid-2019, becoming the third active source of gold in its New Luika
operations.
Shanta views Ilunga as a high-grade production option in Tanzania,
with the potential to contribute up to 25,000 t/month of ore and an
average 20,000 oz per planned level of development.
The company previously moved development forward 12 months after the
project showed off a “compelling business case”, Shanta said. This
included a very low capital intensity of $75/oz (pre-production) and a
pre-tax internal rate of return of 129% at a gold price of $1,200 /oz.
Shanta currently has reserves of 660,500 tonnes at 5.56 g/t for
118,000 oz at Ilunga underground, which is just 3.5 km from the existing
processing plant at New Luika.
In addition to providing a new production base, the development of an
underground mine at Ilunga will give the company infrastructure to
drill off some exploration targets.
This exploration drilling, which also includes underground work at
the Bauhnia Creek deposit (part of New Luika), will see the company
target, at least, the replacement of reserves on an ongoing basis.
The company’s flagship New Luika gold mine started production in 2012
and produced 79,585 oz in 2017 and 38,200 oz in the first half of 2018.
Shanta currently plans to produce 82,000−88,000 oz at New Luika at an
all-in sustaining cost of $680-730/oz.