Scotgold Resources Ltd plans a third-party review for the next 12 months at its Cononish mine following dwindling cash and initial low grade gold finds.
DEVELOPMENT RATES
The review will initially assess the mine design, schedule and production forecasts.
Second stage power and ventilation upgrades will also be included to improve mine accessibility, allowing simultaneous operation of development and production equipment to improve mine development rates.
The Australian company said it had withdrawn its 2023 production guidance and will release revised forecasts and its mine plan, once the third-party review is complete.
An upgraded, fully automated gravity circuit is being commissioned in Q3 to increase Scottish gold doré production on site.
The tailings thickener, designed to increase throughput of ore, is ready to be commissioned once sufficient ore is delivered from the mine for it to be effective.
Scotgold’s £5 million raised during the first six months to deliver 2023’s mine plan, procure a definition drill rig and for additional working capital, was at 30 June reduced to £620,000.
The definition drilling programme has been deferred until the completion of the mine plan review.
PRODUCTION
Since the start of long hole stoping in the 415 East ore drive, a total 50 metres (two stoping blocks) of the 115m strike length has been completed with 2,906 tonnes of ore delivered to the ROM pad for processing.
Scotgold said that stoping block II produced 950t of ore at an average gold grade of 11.6g/t, higher than block II forecast grades of 10.4g/t of gold.
Gold concentrate production in Q2 totalled 1,556 ounces of gold, of which 818 ounces was in June 2023.
Q2 gold concentrate shipments amounted 269 tonnes with a sales value of £2m.
H1 gold production reached 2,314 ounces with 437t of gold concentrate shipments valued at £3.5m.
Scottish gold doré sales to Scottish jewellery companies during H1 2023 amounted to £183,478.
PROGRESS
Interim chief executive officer, Sean Duffy added that the company would continue to develop the mine with a view to achieving full production in the long term.
“The impact of the declining of gold grades in the 430 West Drive, late February was significant and evident in the resultant production figures for the period.
“Notwithstanding these difficulties, LHS [long hole stoping] has progressed in line with our plans and I want to thank our dedicated team for working safely and tirelessly to deliver this, with Q2 2023 production being steady and increasing as a result.”