Scotgold lowers output guidance as it mulls Covid loan

Scotgold Resources Ltd slightly lowered its production guidance for March due to slow recruitment and training as the junior miner said it was considering a Covid-19 government loan.

The Australian company said that the delay to production had resulted in a negative impact on the company’s cash position.

Scotgold reported it had made some progress at Cononish mine during February, including the completion of works earlier identified to prevent crusher circuit chokes. bityl.co/5ld9

The undersized pumps within the flotation circuit have been replaced with appropriate vertical spindle pumps.

Some issues remain with the filter press operations and Scotgold said it was working with the manufacturer and its agents to resolve these.

However, the company added that the full planned round-the-clock operations over six days were not expected to start before the end of March.

Scotgold intends to use the delay to complete and implement the results of an ongoing design review of the primary crusher support structure.

“As a result of the reduced operating hours and primary crusher remediation work, the processing plant is now expected to treat 1,000t of ore in March, reaching design capacity of 3,000tpm from April onwards. 

“Accordingly, the company is lowering its production guidance from between 31,500t and 28,400t to between 28,500t and 25,700t of ore processed, and from between 8,700oz Au and 7,800oz Au to between 7,900oz Au and 7,000oz Au of gold produced.

“Covid-19 has had a significant impact on the Cononish Mine’s overall development schedule resulting in a shutdown in 2020, reduced access to specialist suppliers and consultants from overseas and most recently delays to the recruitment and training of new staff.

“This delayed production build-up has had a negative impact on the company’s cash position.

“To ensure the company has adequate funds available for working capital through this production ramp-up period, the company is investigating possible short-term debt financing options including the Coronavirus Business Interruption Loan Scheme, and the directors are confident these funds will be available if required.”

Scotgold Resources Ltd achieved first gold pour at the Cononish gold and silver mine on 30 November 2020. bityl.co/5leV

The company is also conducting exploration activities on the Cononish and Grampian projects to increase the mineral resources and make new discoveries.