Shanta Gold’s new strategy is expected to improve profitability and reduce debt, following legislative changes in Tanzania.
The move is to deliver a stronger operational and financial performance during the next few quarters for the company.
“Shanta’s new strategy of focusing closely on cost control, operational improvements and shareholder returns was implemented in September, accelerated by the recent legislative changes in Tanzania,” said Shanta Chief Executive Officer Eric Zurrin.
The company said its new strategy is being implemented and refined with expectations of an improvement in performance moving forward for its New Luika gold mine, in southwest Tanzania.
Shanta is reducing the headcount at New Luika by about 40% by December 31, while targeting $5-million a year in savings through a cost reduction programme focused on operational improvement across the business, including working capital management and equipment productivity.
Senior management also agreed to an average 15% reduction in gross cash salaries and to replace cash bonuses with discretionary share awards to increase alignment with shareholders.
Shanta has also cancelled its proposed £3.5-million buyout of TSX-V-listed Helio Resources.