Tanzania-focused gold miner Shanta Gold (LON: SHG) has upped the net present value for its New Luika Gold Mine project to $66.2 million from $37.5 million after receiving the results of a revision to the feasibility study of the project. But the firm is bringing forward waste stripping operations, which means an additional US$13 million working capital will be required. Shanta said that the improvement has resulted from both improved grades and additional tonnage available over the planned 12-year life of the mine. Total tons mined and treated will now be 45.8 million and 5.6 million respectively, with the annual treatment rate estimated at 547,000 tons. The total construction cost of the project is now $27.4 million, and total gold produced is estimated at approximately 445,000 ounces at an annual production rate of 40,484 ounces. The revised feasibility study plans to treat ore at 50 tons per hour from mining operations and to treat 25 tons per hour sourced from free dig lower-grade gravels available at the Luika pit. Additionally, the carbon-in-leach tank design has been increased to ensure 12 hours of contact time at a throughput rate of 100 tons per hour. A further technical change has been to provide for onsite power generation for the full load required at the project. The Tanzanian power supply infrastructure, although providing cheaper power, is unreliable at present and independence from the national grid is required to ensure continuous production. Walton Imrie, Shanta’s executive chairman, said: "The excellent outcome of drilling in 2010 has translated into a significant improvement in the returns expected from the New Luika Gold Mine, and with particularly robust cash flows in the early years of operation.” The increases in the size of the ore resource and improved grades have meant that the mining and treatment schedule has been revised to bring the Bauhinia Creek ore body into production as soon as possible. This has meant that waste stripping has been brought forward from year one to commence immediately and, as a result, the amount of working capital required has increased by approximately US$13 million. Shares in the firm were down 4.9 percent at 25.8 pence at 11:06am today.

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