Mining firm Scotgold digs up further progress in Q3 despite reporting lower production as previously guided

Scotgold Resources, which bills itself as Scotland’s first commercial gold-producer, has hailed further “substantial” progress in the third quarter, saying it is poised for a “significant step-change” despite reporting lower production in the period as previously guided.

The firm, which is quoted on London’s junior Alternative Investment Market, said gold production for the period ending September 30 amounted to 2,004 ounces, in line with guidance outlined last month that had been revised downwards due to delayed power and ventilation upgrades in the underground mine. The firm had previously expected production in the period to be between 2,900 and 3,500oz.

Third-quarter gold concentrate shipments totalled 314 tonnes with a sales value of £3.4 million, and 4,830t of ore were delineated from the Cononish underground mine in the Highlands, while the period also saw progress on processing equipment such as a tailings thickener set to accelerate ore throughput and gold recoveries.

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Scotgold also said production guidance for the fourth quarter is set at 3,000 to 3,900oz of gold, and reiterated how it remains on track to deliver phase two/full production at the site in the Loch Lomond & The Trossachs National Park of a 23,500oz run rate of gold annually.

'Q3 2022 has been another period of substantial progress as we continue to implement optimisation initiatives across our underground mining operation and processing plant,' says the firm. Picture: Alix McIntosh.'Q3 2022 has been another period of substantial progress as we continue to implement optimisation initiatives across our underground mining operation and processing plant,' says the firm. Picture: Alix McIntosh.
'Q3 2022 has been another period of substantial progress as we continue to implement optimisation initiatives across our underground mining operation and processing plant,' says the firm. Picture: Alix McIntosh.

Chief executive Phil Day said the third quarter marked “another period of substantial progress”, adding: “Q4 2022 production is anticipated to be ahead of Q2/Q3 2022 production levels, and I believe the quarter will mark a significant step change”.

He also said that what differentiates the firm from its gold peers is the “uniqueness of Cononish’s orebody”, and it expects to be one of the highest-margin, lowest-cost gold producers globally. “This, coupled with our exploration opportunity in Scotland, I believe ideally places us for growth.”

Analyst Sheldon Modeland of house broker Shore Capital said: “Despite lower gold production during Q3 FY22 and the slight delay in commissioning of the tailings thickener, we are encouraged by the 33 per cent increase in current throughput to c.4,000t per month when compared with Q2 FY22… Furthermore, we highlight management’s expectation of c.5,000t per month once the tailings thickener is connected and c.6,000t per month with further optimisation of the processing plant. Taken together, these initiatives keep [Scotgold] on track to deliver its annualised production rate of 23,500oz of gold by the end of Q1 FY23.”

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