Shanta Gold PLC (LON:SHG) reduced production from the New Luika gold mine in Tanzania in its latest quarter as its focus remained on cost-cutting.
Output in the three months to March was 17,663 gold ounces against 21,288 in the previous quarter, though this was in line with the annual target of between 82-88.000oz said the company.
New Luika recently started underground production and Shanta is focused on reducing debt incurred establishing below surface work.
READ: Shanta Gold delivers profits of US$4.7mln as production rings in at 79,585 ounces
Net debt fell to US$37.5mln after an operating cash inflow of US$7.1mln, which is the lowest borrowing level since the end of 2012, Shanta said.
Shanta is also owed US$16.2mln in VAT repayments, while talks are ongoing with the government over sustainability and local involvement in New Luika.
Underlying profits [EBITDA] were US$9.1mln in the quarter, with sales of 17,691oz at a price of US$1,329 per oz.
Cash costs rose slightly to US$599 per oz with all-in-sustaining costs also higher at US$776 per oz.
Eric Zurrin, chief executive said: "The reduction in underground tonnes compared with the previous quarter was in line with the Revised Mine Plan implemented last year.
“Pleasingly, with the government's approval of the tailings storage facility during the period, all major project work required for the underground mine is now complete and operational.
“Continued deleveraging of the balance sheet remains a high priority and, supported by a performing gold price, the production schedule for the remainder of the year puts us on track to make significant headway."