A mine truck enters the Bauhinia Creek portal as development work continues. (Photo: Shanta Gold)

Shanta Gold’s Ilunga underground mine at its New Luika gold mine operations in southwest Tanzania achieved commercial production on schedule and on budget in July. The primary ventilation fan and underground infrastructure were operational, and the first ore stope was in production at a depth of 98 meters (m) below the portal and 130 m below surface.

Commercial production at Ilunga followed preproduction capital investment of just $7.9 million and was achieved less than 12 months after the first underground portal blast in August 2018. Ilunga is now the third source of high-grade underground feed from New Luika deposits, alongside the Bauhinia Creek and Luika mines.

The New Luika gold mine came into production in 2012 and has been producing between 80,000 ounces per year (oz/y) and 88,000 oz/y since 2014. Production totaled 81,872 oz in 2018 and is forecast to be in the range of 80,000 oz to 84,000 oz in 2019 at all-in sustaining costs of $740/oz to 800/oz.

Ilunga underground has a probable ore reserve of 660,500 mt grading 5.56 grams/mt for 118,000 oz of contained gold, as well as inferred resources of 636,647 mt at 3.57 g/mt for 73,067 oz contained.

Shanta Gold CEO Eric Zurrin said, “Bringing Ilunga’s high-grade ounces online within budget and on time is yet another example of our model at work, namely, adding low-cost ounces to resources at our well-established operations, thereby increasing the mine life and the free cash flow generation potential at New Luika gold mine.

“Now that we have reached commercial production, we hope to delineate further mineable ounces by upgrading our inferred resources via cost-efficient underground drilling.”

Shanta Gold currently has defined ore resources on the New Luika and Singida projects in Tanzania and holds exploration licenses covering approximately 1,500 km2 in the country. The New Luika mine is located in the Songwe district, approximately 700 km southwest of Dar es Salaam. Processing is metallurgically simple, with conventional crushing and milling followed by carbon-in-leach gold extraction delivering robust gold recoveries averaging 91%.