Scotgold to extend Cononish, explore Grampians

Scotgold Resources Limited, the Australia-based gold exploration firm focused on Scotland, said on Wednesday it plans to extend the life of its Cononish gold mine near Tyndrum from 8.5 years to 18 years —  and to explore its additional licence areas which run across the Grampian area.

Scotgold’s CEO said Cononish now has “compelling economics” and a “world-class ore-body” and that the firm’s ultimate vision is to build “a mid-tier gold mining company in Scotland with multiple operations in the country …”

Announcing results for the year ended June 30, 2021, Scotgold said: “The company continues to actively pursue exploration activities on its substantial land position (approx. 2,900 km2) in the Dalradian Belt of the south west Grampians, a terrain highly prospective for both precious and base metal occurrences.

“The majority (85%) of the area currently under option to Scotgold is located outside the Loch Lomond and the Trossachs National Park.”

Scotgold said that as of August 2021,it has “consistently achieved production revenues that exceed operational costs.”

The firm reported revenue for the year of $299,807 and a loss of $4.9 million.

Scotgold said said its vision to build a “multi-asset” gold production company in Scotland based on three prospective areas “close to Cononish, being identified as high priority target areas with data modelling in progress to establish the best sites to test these targets in any potential future exploration drill programmes.”

Scotgold’s shares trade on the AIM market of the London Stock Exchange, where they rose 3% on Wednesday to around 65p give the firm a current stock market value of about £38 million.

Scotgold Resources CEO Phil Day said: “Considerable progress has been made during 2021 at our flagship Cononish mine in Scotland, seeing us successfully ramp up production, in line with our accelerated expansion plan to achieve production of c.23,500oz p.a. run rate of gold production by Q1 2023.

“Since joining as CEO in April 2021, with a newly appointed leadership team at the helm, we have been focused on building our foundations to accelerate growth for the future as Scotland’s first commercial gold mining company.

“We have done this on several fronts.

“Firstly, investing in the Scotgold team, with our headcount increasing 92% from 38 to 73 in December 2021 with the intention to grow our team further in 2022.

“Importantly we have focused on the optimisation of our processing plant and mine development plan to increase the production rate of both our gravity concentrate gold which produces gold doré for the Scottish jewellery market and our high-grade concentrate where we have an established off-take agreement.

We’ve concentrated on de-bottlenecking and the availability of our process plant through maintenance practises and planning and in October 2021 we successfully completed the Ball Mill reline. 

“As I write this, we are consistently achieving production revenues that exceed operational costs.

“December production currently looks to be another step change higher than previous months, further demonstrating the significant strides we’re making as a team.

Our Cononish underground gold mine has a world-class ore-body.

“It’s exceptionally high-grade with grades running as high as c.20 g/t Au, allowing us to run the processing plant with an average mine feed of c.12 g/t Au to date, which is expected to increase in line with our mine expansion plans.

“As a high margin operation, Cononish has compelling economics with forecast operating costs anticipated at £544/oz AISC, once in full production, which places Cononish in the lowest quartile of gold mining operations globally.

“It’s our intention to increase our current mine life of 8.5 years as detailed in the strategic review and believe there is potential to develop Cononish into a +18-year life of mine operation.

“In addition, it’s our strategy to continue to explore our additional licence areas which run across the prospective Grampian area of Scotland — the Caledonides Mobile Belt, with the ultimate vision of building a mid-tier gold mining company in Scotland with multiple operations in the country that enhance the local environment and economy in ways that have an enduring positive impact.

“I’m excited for 2022 and I’m confident it will be a year of continued growth for the company.

“I would like to thank the team for their commitment and dedicated work, our local community, government partners and shareholders for their continued support and look forward to updating the market in the New Year with our 2022 strategy.”