Shanta Gold has revealed a maiden reserve for its Singida gold mining project in Central Tanzania.

The proven on-site ore reserve is now 1.39 million tonnes at 5.1g per tonne, for 230,000oz of recovered gold.

The company said the ore reserve is based on a gold price of $1,300 per ounce and its average cash cost inclusive of contingencies and royalties at the site is $605 per ounce.

Drilling has also indicated that ore bodies extend at depth, identifying the potential for underground mining operations at the project.

"We are also excited about the longer term potential of Singida, with five other deposits… that could provide additional opencast ore."

The company has said that both the economic pits fall within the currently defined measured and indicated resources of 5.18 million tonnes at 3.3g per tonne for 550,000oz.

Shanta Gold CEO Mike Houston said the reserve supports a mine plan that covers what the company believes to be the first phase of the operation; a five-year opencast mine producing 265,000t of ore with an average grade of 5.1g per tonne at 40,000oz per annum.

"We are also excited about the longer term potential of Singida, with five other deposits in the vicinity that are being investigated that could provide additional opencast ore," Houston said.

"In addition, drilling results indicate that the Gold Tree and Jem ore bodies are open at depth and contain interesting high grade pay-shoots."

Shanta Gold currently has defined ore resources on the New Luika and Singida projects in Tanzania and holds exploration licences over a number of additional properties.

The company’s New Luika gold mine started production in 2012 and produced 64,000oz in 2013.