Shares of Australia-based Scotgold Resources, the gold exploration and production company focused on Scotland, fell about 8% on Friday after it published a stock exchange update on its operations.

Scotgold provided the update on its “progress ramping up production at its newly commissioned Cononish Gold and Silver Mine in Scotland, as well as its exploration activities on the Cononish Project, and Grampian Project.”

Scotgold said tonnage throughput for January was “negligible as multiple materials handling issues between circuits were identified but which to a large extent have now been addressed.”

It said remaining issues restricting throughput are expected to be addressed by the end of February — but that “build up of plant operating labour in January was also slower than planned, as recruitment was impacted by both the Christmas period and Government imposed Covid 19 restrictions.”

The company said all major processing components have operated at or above design capacity, and the plant “is therefore still expected to reach the full designed production rate of 3,000t per month.”

As a result of the lost production during the ramp up period, the company said it “is reducing its production guidance for 2021 from 9,910oz Au as announced in December 2020, to between 8,700oz Au and 7,800oz Au from between 31,500t and 28,400t ore processed.”

Scotgold Resources’ shares trade on the London AIM market, where the stock has soared about 36% over the past 12 months to give it a stock market value of around £50 million.

Scotgold’s biggest shareholder with 41.82% of its stock is chairman Nat le Roux, according to the firm’s website. Non-executive directors William Styslinger and Peter Hetherington own 10.97% and 3.86% respectively.

Scotgold Resources CEO Richard Gray said: “Scotgold remains in a strong position to continue our commercial growth trajectory after achieving first gold on 30 November 2020.

“Despite the frustrating but resolvable materials handling issues that arose this month, our confidence in the ultimate performance of the mine continues to grow.

“The lessons learnt, as well as opportunities identified, during this Phase 1 ramp up will be used to optimise our plans for the Phase 2 expansion in 2022.

“The year ahead will also see us advance our exploration programme, which is focused on identifying areas with the potential to increase our mineral resources within reach of the Cononish Mine, identifying potential orebodies at Beinn Udlaidh and Inverchorachan and notably making new discoveries within the company’s option areas. 

“We have had encouraging results back with further follow work planned and we look forward to keeping you updated on our findings.”