East Africa-focused gold producer, developer and explorer Shanta Gold announced its production and operational results for the quarter ended 31 December on Thursday, for its New Luika Gold Mine in southwest Tanzania.
The AIM-traded firm said quarterly gold production was 18,897 ounces, down from 20,580 oz in the third quarter.
It did report record annual gold production for 2016 of 87,713 oz, beating guidance of 82,000 - 87,000 oz and increasing from 81,873 oz in 2015.
Quarterly gold sales were 15,285 oz at an average price of $1,187 per oz compared to average spot price of $1,217, closing at $1,148 per oz.
Gold sales for 2016 reached 86,331 oz, up from 80,622 oz at an average price of $1,232 per oz, compared to average spot price of $1,249 per oz.
Cash costs for the fourth quarter were $486 per oz, up from $387 per oz, with an all-in sustaining cost of $747 per oz, increasing from $621 per oz in the third quarter.
The all-in sustaining cost for 2016 was $661 per oz against guidance of $690-740 per oz, down from 2015's $845 per oz, and there were no lost time injuries for the quarter.
At period end, there was a cash balance of $15m, reducing from $25.8m in the third quarter.
Cash used in operating activities was $0.1 m in the fourth quarter, compared to $11.1m of cash generated from operating activities in Q3, reflecting the lower gold price on lower sales at higher cost, but also with increased working capital in supplier prepayments and VAT on all capital and operating expenditure.
The company said cash generated in operations for the year was $45.9m, compared to $31.8m in 2015.
Capital expenditure was $12.9m, down from $14.2m, and it retired a $9.1m letter of credit with all payments - for the ISI power station - made from cash flow.
Gross debt was $57.9m in the fourth quarter, down from $70.5m in the third quarter, with net debt of $42.9m, up from $38.4m.
It reported $5.25m in proceeds for silver stream was received in the quarter; and forward sales from January to August 2017 were 21,000 oz at an average price of $1,318 per oz.
"I'm pleased to report that Shanta's Q4 2016 performance has rounded off an excellent year for the company," said CEO Toby Bradbury.
"We achieved record gold production of 87,713 oz at a very competitive, and company record, AISC of $661 per oz.
"Shanta has beaten full year guidance on both cost and volume."
Bradbury said that in 2017, Shanta will continue to deliver high margin ounces and to generate strong operational cash flows.
"Shanta is now 15 months into New Luika's base case mine plan, as presented in September 2015, and since then the company has consistently delivered to meet its annual guidance, both in 2015 and 2016."
He said the underground project was significantly de-risked with initial access already developed within the Bauhinia Creek orebody.
"High grade ore production from underground operations is scheduled to start within six months and I look forward to keeping the market updated on our progress."
"Shanta's improved financial position is particularly satisfying with a reduction in gross debt from a peak at the end of H1 2016 of $75m to $57.9m at year end.
"Debt is projected to continue to reduce in 2017 despite the scheduled completion of the underground development program in the first half of 2017."