Shanta Gold ups Singida mineral resource estimate

The measured resource estimate was increased by 56%, with the overall measured and indicated resource up 12% to 5.71 million tonnes containing 381,000 ounces of gold at 2.08g/t, based on a 1g/t cut-off grade.

Singida now has a total project resource of 12.4 million tonne containing 725.000oz at 1.84g/t, including an inferred resource of 6.57Mt containing 344,000oz at 1.63g/t.

Shanta said only two of seven targets within the project's three mining licences were tested in the March quarter's 1,600m reverse circulation drilling campaign, with drilling intersections including 5m at 10.35g/t from 120m and 10m at 20.82g/t from 138m, including 3m at 57.13g/t from 138m.

The Gold Tree 1 area, at the centre of the three mining licenses, contains about 40% of the measured and indicated resources at 1.61Mt, grading 2.80g/t and containing 145,000oz at a cut-off grade of 1g/t located near to surface.

Previous independent minerology testing showed average recoveries of 91%, with mineralisation open at depth and along strike and numerous parallel structures identified.

Shanta said it would soon start an exploration programme to delineate further resources and upgrade the inferred resources near to surface in the Cornpatch and Cornpatch West targets into the measured and indicated resource categories.

This work would include ground geophysical work to test the potential of the 2km strike between the two targets, with work to start early in the September quarter.

Other recent highlights include Tanzania's Rural Energy Agency (REA) starting construction of a high-voltage power line, which should be completed by the end of 2018, pass within 500m of Singida's proposed location site and connect the project to the central government power grid.

Shanta CEO Eric Zurrin said the recent drilling programme done in the March quarter had achieved its objective of upgrading resources from the inferred to the measured and indicated categories.

"M&I resources have now increased to nearly 400,000oz of gold at 2.08g/t. A geophysics programme is planned for Q3 (September quarter) to test upside at the Cornpatch and Cornpatch West targets as we target ongoing expansion and upgrading of the resource," he said.

SP Angel take on the resource upgrade was that "the identification of relatively shallow higher grade material at the Gold Tree 1 area should provide an opportunity to assess the viability of a high grade starter pit".

This in turn could enhance the overall project economics, which would also benefit from the forthcoming completion of the nearby grid power line.

However, the broker noted that there could be some lingering caution among investors over the Tanzanian regulatory regime.

Shanta's shares were up 3.31% Monday at 6.25p (US4.8c).