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Shanta Gold announces positive progress for Chunya Gold project in Tanzania

Publication: proactiveinvestors, United Kingdom

26 August 2010

Shanta Gold (LON:SHG) has been granted an Environmental Impact Assessment Certificate (EIAC) for the Chunya Gold Project in Tanzania - the final hurdle in obtaining a mining licence.

Chairman Walton Imrie paid tribute to the Tanzanian authorities for the efficient and expeditious processing of the approvals and said:

"This is an important and crucial milestone for Shanta in the progress towards production."

He added: "The board of the company and all employees are eagerly awaiting the commencement of mine construction as this will herald an exciting new phase of the company's history, a coming of age!"

The Chunya mine development project is situated near the Saza and Mbagala villages in the Mbeya Region of southern Tanzania.

The EIAC certificate was formally handed to the Company on August 24 and represents the final acceptance of the ESIA and EMP tabled by Shanta to NEMC and means that the final requirement for granting of a mining licence has been met.

Earlier this month Shanta announced the completion of the feasibility study on the project, the decision to proceed with mine development and the commissioning of detailed design of the mine. The feasibility study saw total production of 313,000oz of gold, from a total resource of 642,716oz, at an average grade of 2.39g/t.

The company then gained further traction just 10-days later, with a surprise decision to start the feasibility study for the Singida gold mine.

The company intends to apply for a mining licence for Singida in final quarter of this year.

In the wake of the announcement, analysts said the surprise decision revealed a new ‘air of urgency’ at Shanta.

“Management is now pushing ahead with the potential development of two new gold mines and this should continue to add value to the group,” said mining veteran John Meyer of equities house Fairfax.

The Chunya project has an estimated capital cost of US$23.19m, and Shanta has hired Environmental, Process and Mining Consultants Ltd (EPMC) to carry out a detailed design of the Chunya mine. EMPC previously carried out the feasibility study for the project.

The detailed design of the Chunya mine is expected to be completed by November 2010, and mine construction is expected to start before the year’s end.

The Chunya mine’s commissioning is targeted for the fourth quarter of 2011.