Shares of Scotgold Resources Limited, the Australia-based gold exploration firm focused on Scotland, rose as much as 15% on Friday after the firm published a production and operations update for its Cononish Gold and Silver Mine near Tyndrum in the fourth quarter of 2021.

Scotgold said fourth-quarter production totalled 1,508 ounces of gold.

It said fourth-quarter gold concentrate and shipments totalled 231.5 tonnes with a sales value of over £2.6 million.

First-quarter 2022 gold production guidance range is for 1,400 to 2,200 ounces of gold.

Scotgold’s shares trade in London, where they rose as much as 15% to around 78p to give the firm a stock market value of about £46 million.

Scotgold added: “Q4 2021 gold and silver concentrate shipments totalled 231.5 tonnes with a sales value of over £2.6m.

“Gold concentrate is sold directly to Scotgold’s off-take partner MRI Trading AG.

“Some gravity gold production (to produce gold doré for the Scottish Jewellery industry) was produced and sent to the refiners in December 2021.  

“The company is continuing to actively look at increasing the production capabilities for doré gold in addition to its gold concentrate.”

Scotgold CEO Phil Day said: “I’m delighted to report on our record-breaking gold concentrate production in December 2021, which saw a c.60% increase in production from our previous record month.

“Our 2021 initiatives to increase production efficiencies and ramp-up production are working …

“We have almost completed Phase 1 ramp-up production and we continue to be cash generative as our production revenues exceed operational costs.

“We forecast that this cash generation will continue during 2022 as we increase the production profile firstly to 4,000 feed tonnes by Q2 2022 and then 4,500 feed tonnes by Q4 2022 (equating to 16,000 – 17,200 ounces run rate of gold p.a.) and up to c.23,500oz of gold p.a. run rate by end of Q1 2023.

“This will allow us to develop the mine, increase our resources, continue exploration, and should drive significant shareholder value.

“Scotgold has negotiated a newly restructured debt agreement with its original debt provider Bridge Barn which affords us continued operational flexibility for growth and expansion by removing the need to repay tranches 1 and 2 plus interest, in 2022.

“Ultimately our vision is to become a mid-tier multi asset gold producer in Scotland.

“Expanding the resource and achieving full mine optimisation and production at Cononish is the first step in our strategy.

“Our second step is the continued exploration of our additional licence areas which run across the prospective Grampian area of Scotland — the Caledonides Mobile Belt.

“We have identified three prospective areas, close to Cononish and it’s our intention to explore these in conjunction with our mine optimisation and development work at Cononish during 2022 and 2023.

“We will continue to update the market on Cononish’s progress through quarterly production and sales reports which is line with standard reporting for listed gold producers and corporate and exploration updates.

“With our Q1 2022 gold production target of 1,400 to 2,200 ounces of gold and run rate of 17,500 ounces of gold p.a. by Q2 2022, I look forward to 2022 as we continue to build credibility and deliver results as a unified team.”