Change may be hard but not impossible. It is inevitable with the current prevailing dynamics occurring in the immediate environment. A business that is not flexible faces the likelihood of suffering a breakdown. A change is necessary if necessitated by the factors to meet a need, or implications that have been weighted down to it.
Shanta Gold PLC has started to adjust to recent changes to the finance and mining laws in Tanzania. The rerouting shift has been compelled by the previous ramifications that hit the mining industry affecting greatly Acacia Mining industry.
Eric Zurrin, currently chief financial officer, has taken over as chief executive and the focus going forward will be on cost control. Toby Bradbury, chief executive for the past two and half years, stepped down in August.
Shanta operates the New Luika gold mine in Tanzania, where the government recently passed laws giving it the power to renegotiate contracts, demanded more local ownership, upped royalty payments and imposed a 1 percent clearing charge on mineral shipments out of the country.
Shanta expects that its next gold shipment will see royalty rates increase to 6 percent from 4 percent in addition to the clearing charge.
The changes have not affected production. The miner produced 40,073 ounces (oz) of gold in the first half of 2017 at an all-in sustaining cost of $755/oz.
Production in July has been maintained at those levels, Shanta said, and it remains on track to meet full year guidance of 80,000-85,000 oz at sustainable costs of $800-$850/oz.
The Tanzania uncertainty has come at time when Shanta was poised for a major expansion drive. Shanta has already started to ramp-up production from a new underground section at New Luika.
In June, it unveiled a series of transactions that seemed set to transform the long term future.
This included the acquisition of Vancouver-based Helio Resource Corp (which owns a huge tract of land next to New Luika for US$5.6mln; a $14million fund raise and a debt restructuring deal to boost its facility to $50million.