Scotgold Resources Ltd said it recorded its strongest quarter yet with record production exceeding guidance at its Cononish gold and silver mine, near Tyndrum in Scotland.
PRODUCTION
In its operations report for the three months ended 30 June 2022, the Australian company showed increased production to 3,531 ounces gold and 18,382 ounces of silver, a 188% rise in gold from Q1 2022. Guidance in Q2 had been 2,600 to 3,200 oz.
In total, Scotgold has produced 7,541 oz gold of which Q2 contributed 47%.
In June 2022, the company processed 164 tonnes of concentrate equating to c.1,339 oz of contained gold.
This is a c.17% increase to the previous concentrate production record in April 2022.
Gold grades in flotation concentrate of up to 400g/t realised during Q2 2022.
Following three consecutive months of positive operating cash flow, Scotgold said that the mine was in commercial production from 1 July 2022.
Production generated cashflows exceeding all-in sustaining costs.
Scotgold said it did not use cyanide for either its flotation gold concentrate production or gravity gold at Cononish.
MINING AND PROCESSING
A total of 5,112 tonnes of ore were delineated from the Cononish underground mine and transferred to ROM pad.
Grade mill feed for processing plant averaged 19 g/t of gold, with processing plant gold recovery levels above 90%.
SALES
Cononish Q2 2022 gold concentrate shipments totalled 415 tonnes with a sales value of £5 million (79% of H1 2022).
H1 2022 gold concentrate shipments totalled 551 tonnes (£6.3m).
| Gold produced (ounces) | Silver produced (ounces) | Gold Sales (ounces) | Gold sales price (£/ounce) | Gold sales (£ million) | |
| Quarter ended | |||||
| Q3 2021 30 September | 1,123 | 5,101 | 602 | 1,329 | 0.8 |
| Q4 2021 31 December | 1,508 | 7,200 | 1,891 | 1,375 | 2.6 |
| H2 2021 | 2,631 | 12,301 | 2,493 | 1,364 | 3.4 |
| Q1 2022 31 March | 1,224 | 5,881 | 854 | 1,522 | 1.3 |
| Q2 2022 30 June | 3,531 | 18,382 | 3,034 | 1,648 | 5.0 |
| H1 2022 | 4,755 | 24,263 | 3,888 | 1,620 | 6.3 |
OPERATIONS
Scotgold said that the pre-constructed tailings thickener was on-site with installation expected during Q3 2022.
The company’s cut and fill – stoping mining method is progressing well, with the third targeted for Q3 2022.
“As a direct result of opening up the mine through development mining achieved in Q1 2022, the gold grades mined in Q2 2022 were higher than anticipated,” added the company.
“Mine optimisation work being conducted in Q3 2022 will continue to allow further areas of the mine open and even further mining faces being accessed.”
GUIDANCE
For Q3 2022, Scotgold set guidance for gold production range at 2,900 – 3,500 oz gold.
Low capex optimisation initiatives, including the addition of a thickener into the tailings circuit, are underway.
This will allow the company to process up to 4,500 feed tonnes and achieve optimisation phase production run rate of c.16,000 – 17,500 oz p.a. run rate of gold.
| Phased Production Development | Expected to commence by end | Annual Rate of Ore Production | Target Average Annual Rate of Gold Production |
| Phase 1 – Achieved Q1 2022 | Q1 2022 – Achieved | 36,000 tonnes | 9,910oz |
| Optimisation Phase Production | Q3 2022 | 51,000 tonnes | 16,500 – 17,500oz |
| Phase2/Expansion Phase | Q1 2023 | 72,000 tonnes | 23,500oz |
DISCIPLINE
Scotgold plans to continue exploration activities in and around Cononish mine and within its licensed 2,900km2 area in preparation for exploratory drilling in 2023.
Chief executive Phil Day said that the company’s team at Cononish was performing exceptionally well.
“We remain impressed with Cononish’s high-grade gold geology and anticipate that the operations and cost control discipline of our team will enable the mine to be even more cash generative and profitable as it moves from phase 1 to phase II production.”