Final Results
Shanta Gold Limited
("Shanta" or the "Company")
Results for the year to 31 December 2009
The Board of Shanta is pleased to announce its audited results for the year
ended 31 December 2009.
Chairman's Address to Shareholders
I spoke at length last year about the financial market turmoil. Sadly, the
fallout from what turned into a fully fledged global financial crisis did not
abate during the year.
I am pleased to report though that the strategy adopted by the board of
directors to conserve cash, in particular in terms of minimising drilling and
utilisation of people skills, has proved to be the correct decision. During the
year our focus remained on:
 - Increasing our resource base;
 - Evaluation of the establishment of a small scale mining operation on the
basis of a combination of internal cash and project financing;
 - Commissioning an operation to secure future cash flow, permitting Shanta to
further evaluate existing and other exploration projects; and
 - Sourcing additional funds in order to continue with our core exploration
activities.
Our achievements in the year were therefore modest, reflecting the lean budgets
and austere planning parameters. However, there were some notable developments
at the majority of our exploration sites, supporting our optimistic view of the
future.
At Chunya our ground teams performed valuable work, resulting in a significant
increase in the potential strike to almost 5 kilometres. This was followed by
the commissioning of an environmental impact assessment and initiating
metallurgical test work. By the end of the financial year we had submitted an
application for a mining licence over an area of 7.83 square kilometres. This is
one part of the process of bringing a small scale mine into production in the
short term. We intend initially to establish an open cast pit and thereafter an
underground mine with a carbon in leach ore recovery plant. The five known ore
bodies at Chunya total some 642 000 ounces of gold at a 1 g/t cut-off (a JORC
compliant resource assessment) capable of supporting a 30 000 ton per month
mine, potentially translating into more than 23 000 ounces annually.
At Singida additional metallurgical test work from reverse circulation drilling
on five of the project prospects suggests that overall recoveries from milling
and carbon in leach processing will be over 90%. This bodes well considering the
JORC compliant resource assessment in excess of approximately 850 000 ounces of
gold at a 1 g/t cut off (a JORC compliant resource assessment). Also in the
Singida area, a new prospecting licence was obtained over the Muhintiri target
area. This area is situated approximately 40 kilometres west of the existing
licences. Initial geological field work has revealed sufficient anomalous gold
for us to be encouraged by the future of the project.
The continued presence of artisanal miners at Mgusu has prevented our regaining
access to the project. We continue our dialogue with the Ministry of Mines with
regard to accessing our project. To date we have not reached any resolution, but
remain clear on our ownership position and confident that in time we will regain
access to what remains an exciting target in the area.
The resignation of Mr Mike Wuth in November last year has left a vacancy on the
board for a non-executive director, a position we expect to fill in the short to
medium term, as soon as we have identified a suitable candidate. On behalf of
the board I would like to thank Mike for his contribution to the Company. In
addition, I would like to thank my fellow directors and the staff of the Company
for an efficient, motivated and dedicated performance in the face of the funding
difficulties that have faced exploration companies over the past year.
In summary, we at Shanta have, in what has been another challenging year,
progressed Chunya and Singida significantly, to the extent that they are both
likely to develop into new gold mines, while further upside potential also
exists. The standby equity distribution agreement (SEDA) with YA Global Master
SPV Ltd (YAGM), which we announced towards the end of the reporting period in
December 2009, entitles the Company to call for up to £3.0 million in cash in
return for shares in the Company. These are an innovative and flexible funding
method to supplement our existing cash reserves of US$2.6 million, which we will
apply as and when required to finance exploration and property upgrades while we
continue to move our projects up the value curve and into the planned production
phase. Since year end, we have raised £2 million in the market from
institutional investors in a private placing at 20p per share to supplement our
finances. Â These developments, in particular the need to develop an operation at
Chunya in the short to medium term, may occasion the approval by the Board of
approaches to the market in order to raise additional financing for the Company.
Walton Imrie
18 May 2010
Financial Results
These are not the group's consolidated financial statements, however, all
figures are based on the audited consolidated financial statements.
Consolidated Statement of Comprehensive Income
+-----------------------------------------+-------------+-------------+
| Â | 31 December | 31 December |
| | | |
| Â | 2009 | Â Â 2008 |
| | | |
| Â | US$'000 | US$'000 |
+-----------------------------------------+-------------+-------------+
| Revenue | - | - |
+-----------------------------------------+-------------+-------------+
| Cost of sales | - | - |
+-----------------------------------------+-------------+-------------+
| Gross profit | - | - |
+-----------------------------------------+-------------+-------------+
| Other operating income | - | - |
+-----------------------------------------+-------------+-------------+
| Administration expenses | (1 616) | (2 130) |
+-----------------------------------------+-------------+-------------+
| Exploration and evaluation costs | (2 703) | (4 572) |
+-----------------------------------------+-------------+-------------+
| Operating loss | (4 319) | (6 702) |
+-----------------------------------------+-------------+-------------+
| Finance income | 9 | 222 |
+-----------------------------------------+-------------+-------------+
| Loss before taxation | (4 310) | (6 480) |
+-----------------------------------------+-------------+-------------+
| Taxation | - | - |
+-----------------------------------------+-------------+-------------+
| Loss for the year | (4 310) | (6 480) |
+-----------------------------------------+-------------+-------------+
| Other comprehensive income for the year | - | - |
+-----------------------------------------+-------------+-------------+
| Total comprehensive loss for the year | (4 310) | (6 480) |
+-----------------------------------------+-------------+-------------+
| Earnings per share | Â | Â |
+-----------------------------------------+-------------+-------------+
| Basic loss per share (US cents) | (4.25) | (6.45) |
+-----------------------------------------+-------------+-------------+
Consolidated Statement of Financial Position
+--------------------------------------------+-------------+-------------+
| Â | 31 December | 31 December |
| | | |
| Â | 2009 | 2008 |
| | | |
| Â | US$'000 | US$'000 |
+--------------------------------------------+-------------+-------------+
| Assets | Â | Â |
+--------------------------------------------+-------------+-------------+
| Non-current assets | Â | Â |
+--------------------------------------------+-------------+-------------+
| Â Intangible assets | 4 442 | 4 680 |
+--------------------------------------------+-------------+-------------+
| Plant and equipment | 252 | 305 |
+--------------------------------------------+-------------+-------------+
| Investment in subsidiary companies | - | - |
+--------------------------------------------+-------------+-------------+
| Loans receivable from subsidiary companies | - | - |
+--------------------------------------------+-------------+-------------+
| Â | 4 694 | 4 985 |
+--------------------------------------------+-------------+-------------+
| Current assets | Â | Â |
+--------------------------------------------+-------------+-------------+
| Trade and other receivables | 428 | 174 |
+--------------------------------------------+-------------+-------------+
| Cash and cash equivalents | 2 608 | 6 404 |
+--------------------------------------------+-------------+-------------+
| Â | 3 036 | 6 578 |
+--------------------------------------------+-------------+-------------+
| Total assets | 7 730 | 11 563 |
+--------------------------------------------+-------------+-------------+
| Equity and liabilities | Â | Â |
+--------------------------------------------+-------------+-------------+
| Equity | Â | Â |
+--------------------------------------------+-------------+-------------+
| Share capital | 19 | 18 |
+--------------------------------------------+-------------+-------------+
| Share premium | 31 976 | 31 779 |
+--------------------------------------------+-------------+-------------+
| Share option reserve | 678 | 1 337 |
+--------------------------------------------+-------------+-------------+
| Shares to be issued reserve | 86 | 8 |
+--------------------------------------------+-------------+-------------+
| Translation reserve | 400 | 400 |
+--------------------------------------------+-------------+-------------+
| Retained losses | (26 094) | (22 539) |
+--------------------------------------------+-------------+-------------+
| Total equity | 7 065 | 11 003 |
+--------------------------------------------+-------------+-------------+
| Current liabilities | Â | Â |
+--------------------------------------------+-------------+-------------+
| Trade and other payables and accruals | 329 | 224 |
+--------------------------------------------+-------------+-------------+
| Loans payable to related parties | 336 | 336 |
+--------------------------------------------+-------------+-------------+
| Total liabilities | 665 | 560 |
+--------------------------------------------+-------------+-------------+
| Total equity and liabilities | 7 730 | 11 563 |
+--------------------------------------------+-------------+-------------+
Consolidated Statement of cash flows
+------------------------------------------------------+-----------+-----------+
|Â |31 December|31 December|
| | | |
|Â | 2009| 2008|
| | | |
|Â | US$'000| US$'000|
+------------------------------------------------------+-----------+-----------+
|Net cash flows from operating activities | (3 662)| (5 575)|
+------------------------------------------------------+-----------+-----------+
|Investing activities |Â |Â |
+------------------------------------------------------+-----------+-----------+
|Â |Â |Â |
+------------------------------------------------------+-----------+-----------+
|Cash flow attributable to the exploration for and | | |
|evaluation of mineral resources | Â | Â |
+------------------------------------------------------+-----------+-----------+
|Purchase of intangible assets | (66)| (343)|
+------------------------------------------------------+-----------+-----------+
|Purchase of plant and equipment | (92)| (59)|
+------------------------------------------------------+-----------+-----------+
|Cash advanced to group companies | Â | -|
+------------------------------------------------------+-----------+-----------+
|Net cash flows from investing activities | (158)| (402)|
+------------------------------------------------------+-----------+-----------+
|Financing activities |Â |Â |
+------------------------------------------------------+-----------+-----------+
|Proceeds from issue of ordinary share capital | -| -|
+------------------------------------------------------+-----------+-----------+
|Loans repaid | -| -|
+------------------------------------------------------+-----------+-----------+
|Net cash flows from financing activities | Â | Â |
+------------------------------------------------------+-----------+-----------+
|Net decrease in cash and cash equivalents | (3 820)| (5 977)|
+------------------------------------------------------+-----------+-----------+
|Cash and cash equivalents at beginning of year | 6 404| 12 392|
+------------------------------------------------------+-----------+-----------+
|Foreign exchange adjustment | 24| (11)|
+------------------------------------------------------+-----------+-----------+
|Cash and cash equivalents at end of year | 2 608| 6 404|
+------------------------------------------------------+-----------+-----------+
Consolidated Statement of Changes in Equity for the year ended 31 December 2009
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Â |Â |Â | Share|Â |Â | Shares|Â |Â |
| | | | | | | | | |
|Â | Share| Share| option|Warrant|Translation| to be|Retained| Total|
| | | | | | | | | |
|Â |capital|premium|reserve|reserve| reserve| issued|earnings| equity|
| | | | | | | | | |
|Â |US$'000|US$'000|US$'000|US$'000| US$'000|US$'000| US$'000|US$'000|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Total equity |Â |Â |Â |Â |Â |Â |Â |Â |
| | | | | | | | | |
|31 December | | | | | | | | |
|2007 | 18| 31 715| 1 384| 306| 400| -|(16 568)| 17 255|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Total | | | | | | | | |
|comprehensive| | | | | | | | |
|loss for the | | | | | | | | |
|year |Â |Â |Â |Â |Â |Â | (6 480)|(6 480)|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Share based | | | | | | | | |
|payments | Â | 64|Â |Â |Â |Â |Â | 64|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Shares to be | | | | | | | | |
|issued |Â |Â |Â |Â |Â | 8|Â | 8|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Share option | | | | | | | | |
|costs |Â |Â | 156|Â |Â |Â |Â | 156|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Share options| | | | | | | | |
|expired |Â |Â | (203)|Â |Â |Â | 203| -|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Warrants | | | | | | | | |
|expired |Â |Â |Â | (306)|Â |Â | 306| -|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Total equity |Â |Â |Â |Â |Â |Â |Â |Â |
| | | | | | | | | |
|31 December | | | | | | | | |
|2008 | 18| 31 779| 1 337| --| 400| 8|(22 539)| 11 003|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Total | | | | | | | | |
|comprehensive| | | | | | | | |
|loss for the | | | | | | | | |
|year |Â |Â |Â |Â |Â |Â | (4 310)|(4 310)|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Share based | | | | | | | | |
|payments | 1| 197|Â |Â |Â | (8)|Â | 190|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Shares to be | | | | | | | | |
|issued |Â |Â |Â |Â |Â | 86|Â | 86|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Share option | | | | | | | | |
|costs |Â |Â | 96|Â |Â |Â |Â | 96|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Share options| | | | | | | | |
|expired |Â |Â | (755)|Â |Â |Â | 755| -|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
|Total equity | Â | Â |Â |Â |Â |Â |Â |Â |
| | | | | | | | | |
|Â 31 December| | | | | | | | |
|2009 | 19| 31 976| 678| -| 400| 86|(26 094)| 7 065|
+-------------+-------+-------+-------+-------+-----------+-------+--------+-------+
Notes to the financial statements
1. Basis of preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) which comprise standards and
interpretations by the International Accounting Standards Board (IASB) and
International Accounting Standards and Standing Interpretations approved by the
International Accounting Standards Committee (IASC) that remain in effect, and
to the extent that they have been adopted by the European Union.
2. Earnings per share
The earnings and weighted average number of ordinary shares used in the
calculation of basic earnings per share is as follows:
 GROUP
 31 December 31 December
 2009 2008
 US$'000 US$'000
Loss for the year attributable to equity holders of the
company (4 310) (6 480)
Earnings used in the calculation of basic loss per share (4 310) (6 480)
as presented below:
Basic loss per share (US cents) (4.25) (6.45)
Weighted average number of shares in issue 101 791 926 100 469 938
As at balance sheet date, the Company had US$85 800 worth of share reserved in
the Shares to be issued reserve.
Of this amount US$21 800 relates to the December 2009 directors remuneration in
respect of W Imrie, W Â Vorwerk and D Scott. This was settled in the post year
end period by the issue of 186 209 shares in the Company.
In addition, 309 506 shares were issued in the period from February to April
2010, in settlement of the above directors fees for the period January to March
2010.
The remaining amount of US$64 000 in the Shares to be issued reserve, in
relation to the implementation fees on the Standby Equity Distribution Agreement
(SEDA), was settled by the post yearend issue of 523 793 share in the Company.
Post yearend 2 128 shares were issued to an employee of the group in settlement
of March 2010 salary.
The Company raised £2 million by the issue of 10 million new shares in the
Company in the post year end period. An additional 200 000 new shares were
issued to the Company's broker Fairfax, in respect of the above fund raising
IAS 33 "Earnings per share" defines dilution as a reduction in earnings per
share or as an increase in loss per share. When calculating the dilutive
earnings per share the loss is decreased. Accordingly dilutive loss per share is
not disclosed
 Number Number
The group has the following instruments which could
potentially dilute basic earnings per share in the future
Share options 4 154 064 Â 3 980 846
During the year the Company entered into the SEDA agreement in terms of which
the company raises funds by the issue of shares in the Company, the SEDA
agreement can potentially dilute earnings per share in the future.
3. Related party transactions
Details of transactions between the group and other related parties are
discussed below.
Directors' remuneration
 31 December 2009  31 December 2008
 US$'000  US$'000
Walton Norman Brian Imrie 180 * 148 *
Ketankumar Vinubhai Patel 8 Â 8
Richard Barry Shead - Â 24 **
Walter Egmund Vorwerk 201 *** 183
Mike Grosvenor Wuth 5 Â 6
Walter David Scott 113 **** 25
Maheshkumar Raojibhai Patel (Alternate
director) - Â -
* Of this amount US$82 500 in respect of the 2009 fees and US$7 500 in respect
of the 2008 fees  was settled by the issue of 1 707 771 (2008: 1 073 853)
shares in the Company. A further US$7 500 in respect of the December 2009
fees was settled by the issue of shares subsequent to the year end.
* With effect from 1 June 2006 until 10 March 2008 the services of the CEO,
Richard Shead, were  provided under the terms of a contract with Applebrook
Holdings Ltd. Applebrook received US$27 000 per month whilst Richard Shead
received US$3 000 per month. The remuneration includes his termination
payment equivalent to six months pay. Applebrook also received a payment
equal to six months pay.
***Of this amount US$35 585 (2008:nil) was settled by the issue of 314 224
(2008: nil) shares in the Company. A further US$8 350 n respect of the December
2009 fees was settled by the issue of shares subsequent to the year end.
****Of this amount US$27 650 (2008:nil) was settled by the issue of
247 136(2008:nil) shares in the Company. A further US$5 950 Â n respect of the
December 2009 feeswas settled by the issue of shares subsequent to the year end.
Directors' interests
The interest of the directors (all of which are beneficial) in the issued
ordinary share capital of the Company are as follows:
 31 December 2009 31 December 2008
 Number each  Number each
 of ordinary  of ordinary
 shares % shares %
Walton Norman Brian Imrie 8 818 217 8.47 7 110 466 7.01
Ketankumar Vinubhai Patel 10 343 750 9.94 10 343 750 10.20
Walter Egmund Vorwerk 358 224 0.34 44 000 0.04
Mike Grosvenor Wuth - Â -
Walter David Scott 247 136 0.24 -
Maheshkumar Raojibhai
Patel (Alternate director) 10 343 750 9.94 10 343 750 10.20
Share options
The following share options have been granted to the following directors (and
prior director) under the Share Option Plan:
  Number of
 Grant date share options Option price
Walton Norman Brian Imrie 29 July 2005 168 006 25 p
Walton Norman Brian Imrie 7 September 2009 350 000 6 p
Ketankumar Vinubhai Patel 29 July 2005 168 006 25 p
Ketankumar Vinubhai Patel 7 September 2009 150 000 6 p
Walter David Scott 7 September 2009 250 000 6 p
Walter Egmund Vorwerk 29 July 2005 466 685 25 p
Walter Egmund Vorwerk 14 July 2006 363 718 59 p
Walter Egmund Vorwerk 7 September 2009 350 000 6 p
Maheshkumar Raojibhai Patel
(alternate director) 29 July 2005 168 000 25 p
The option plan was adopted by the board of directors on 1 July 2005. Details of
the option plan are available at the Company's registered office.
None of the above directors' options lapsed as a result of vesting conditions
not being met and none were exercised during the year.
Details of related parties share based payment.
Effective from 18 March 2008, as remuneration for the services of W Imrie as the
executive chairman, the Company pays remuneration of US$180 000 per annum. US$90
000 is payable in cash and the remaining remuneration of US$90 000 is payable in
ordinary shares of 0.01p each in the Company. During the year US$82 500 in
respect of the 2009 fees and US$7 500 in respect of the 2008 fees was settled by
the issue of 1 707 771 shares in the Company. A further US$7 500 was settled by
the issues of shares subsequent to the year end.
Effective from 1 July 2009 the Company issues shares of 0.01p each in the
Company in part settlement of the executive director's fees of W Vorwerk and D
Scott.
In respect of W Vorwerk an amount of US$35 585 (2008:nil) was settled by the
issue of 314 224 (2008: nil) shares in the Company. A further US$8 350 was
settled by the issue of shares subsequent to the year end.
In respect of D Scott an amount of US$27 650 Â (2008:nil) was settled by the
issue of 247 136 (2008:nil) shares in the Company. A further US$5 950 was
settled by the issue of shares subsequent to the year end.
During the year fees of UK£5 000 in respect of nomad and broker fees payable to
Fairfax were settled by the issue of 89 638 shares in the Company and UK£21 000
in respect of a bonus payment to Prospect & Co Limited (a geological consultant)
was settled by the issue of 350 000 shares in the Company.
The loans from related parties are from companies in which K Patel, M Patel and
W Imrie have an indirect interest.
W Imrie is a director of Rameron Consulting which is considered to be a related
party as a result of the common directorship. During the year a total amount of
U$118 500 were paid to Rameron Consulting of which US$90 000 was in relation to
W Imrie's duties as an executive chairman of the Company.
Annual Report
Copies of the annual financial statements (including the notice of annual
general meeting) will be sent to shareholders shortly. In addition, copies will
be available to the public, free of charge, from the Company's registered office
at Suite A, St Peter Port House, Sausmarez Street, St Peter Port, Guernsey, GY1
2PU.
Annual General Meeting
The Company's Annual General Meeting will be held on 18 June 2010 at 10.00 am at
the Company's registered office, Suite A, St Peter Port House, Sausmarez Street,
St Peter Port, Guernsey, GY1 2PU.
For further information:
Shanta Gold Limited
http://www.shantagold.com
Walton Imrie
Mobile: +27 (0) 82 4442851 / +263 91 2131215
Walter Vorwerk
Mobile: +27 (0) 83 308 0080
Fairfax I.S. PLC
Nominated adviser and broker
Ewan Leggat / Laura Littley
+44 (0)20 7598 5368
A copy of this announcement will be available on Shanta Gold's website
www.shantagold.com
Web reference for this announcement is www.shantagold.com
Distributed by:
Russell & Associates
Johannesburg
Marion Brower/Charmane Russell
Tel: +27 11 880 3924
[HUG#1416942]
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