 |
| MIDAS SHARE TIPS UPDATE: Miner Shanta Gold's prospects start to shine |
Central Banks' Growing Appetite for Gold Propels Shanta Gold into the Spotlight
In today's uncertain economic climate, central banks worldwide are increasingly turning to gold as a safe haven investment. With over 35,000 tons of gold collectively worth trillions of dollars, they are actively bolstering their gold reserves. China, for instance, has acquired nearly 155 tons this year alone.
This renewed interest in gold as a financial safeguard is fueling the recent surge in its price. Over the past five years, gold has seen an impressive 9 percent increase, with the value approaching the $2,000 (£1,650) mark, driven further by the escalating turmoil in the Middle East. Many experts predict that gold's price will remain around these levels for at least the next couple of years, attributed to various factors such as inflation in Western economies and power shifts in the East.
Shanta Gold, a prominent player in the gold mining industry, boasts two active mines in Tanzania, producing approximately 100,000 ounces of gold annually. Additionally, the company has an early-stage project in Kenya, expected to yield significant quantities of gold over time.
Midas recognized Shanta's potential in 2021 when their shares were trading at 8.25p, devoid of dividends, and with just one operational mine. Since then, a second mine has commenced production, leading to increased output, and CEO Eric Zurrin has initiated dividend payments, with 0.2p distributed last year, and an equal amount expected for 2023.
While Shanta shares have already appreciated by more than 25 percent, rising to 10.6p since 2021, the outlook remains positive. Production is on an upward trajectory, and the Kenyan mine holds the promise of substantial rewards, aligning perfectly with the current gold market momentum. Zurrin, a seasoned banker, has been closely associated with Shanta for the past decade, including six years as the CEO.
Under Zurrin's leadership, the company has successfully delegated day-to-day operations to local talent, resulting in a committed, efficient, and effective 1,000-strong workforce primarily of local origin.
In the earlier part of this year, Zurrin announced his departure. However, he has since confirmed that he will remain in the role until a suitable successor is identified. Chairman Anthony Turrant, a seasoned professional with an extensive industry network, is well-positioned to ensure a smooth transition.
With or without Zurrin, Shanta Gold's strategic plan includes augmenting production at both Tanzanian mines and developing the Kenyan mine, which is showing highly promising early signs.
Shanta's strong cash flows are expected to facilitate the development of the new mine without the need for shareholder involvement. Furthermore, investors may even anticipate special dividends along the way.
Financial analysts project sales to reach $190 million this year, surging to over $220 million by 2025. Profits are also set to climb, with an estimated $41 million forecast for 2023, rising to nearly $50 million in the next two years.
In summary, Shanta Gold's shares surged to 13.9p when their second mine commenced production earlier this year, despite a temporary dip due to unrelated shareholder activities over the summer. With robust financial figures, a resilient gold market, and promising prospects, the current share price of 10.6p makes Shanta Gold a compelling long-term investment choice.
Post a Comment