Shanta Gold (LON:SHG) is on track to begin production from New Luika by the end of the first quarter next year as it announced it has secured a US$5 million bridging loan.
The company also revealed today that it was in advanced stages of negotiation concerning a second bridging loan of between US$15 and US$20 mln.
More than 10,000 ounces gold at 4.9 grammes per tonne have been stockpiled at New Luika in Tanzania as at December 17 this year.
The firm also noted that deeper drilling at the Bauhinia Creek part of the project, the first source of ore for the plant, had shown the ore body extended down to 200 metres.
A mining licence for the firm’s second Tanzanian project – Singida – was received on December 19, the firm added.
Shanta’s chief executive Gareth Taylor said today: “With the first bridging loan now in place and the second at an advanced stage, Shanta is on track to commence at New Luika by the end of Q1 2012.
“Receiving approval of the mining licence for Singida represents another major achievement for the company and we can look forward with confidence to having two producing mines by the end of 2013.
“With our excellent exploration team focussed on the opportunities available in the joint venture areas I am very excited about the further growth potential of this company.”
The first US$5 million loan facility was made available yesterday and is with Export Trading Group – a company in which Shanta director Ketan Patel, has a beneficial interest, Shanta said today.
It is repayable within six months of a draw down and bears an interest rate of 8 per cent per annum and Export Trading Group is entitled to an option over new Shanta shares equal to 3 per cent.
The company is also at an advanced stage of negotiation for an additional loan facility of US$15-20 million with other parties. The firm believes this will provide sufficient funds for the company to achieve commissioning at New Luika by the end of Q1 2012.
Following receipt of the Environmental and Social Impact Assessment for the Singida project, the government mining licence has now been issued and received by Shanta, the company also told investors today.