Scottish gold mine project enters 'exciting time' despite disappointing figures

Scotgold Resources, the company behind the Cononish gold and silver mine near Tyndrum on the West Highland Way, said the project had reached an “exciting time” despite revealing lower-than-expected production figures.

The firm’s chief executive, Phil Day, said he was expecting to see “yet another step change in performance” towards the end of 2022 as tunneling plans progress.

Releasing a production and operations update, the group said gold production totalled 1,257 ounces for the first quarter of 2022 - compared with production guidance of 1,400 to 2,200 oz gold.

The firm told investors: “Q1 2022 was a quarter during which Scotgold executed the plan to develop tunnels in the underground mine to allow access to further areas of the mine where high grade ore exists.

“This meant the process plant had to process lower grade ore during this period. The company is pleased with how the process plant performed during this difficult quarter.”

The firm also noted that Covid remained an “interruption to the business”, particularly in the early part of the quarter. In some cases, the business had up to ten employees in quarantine at any given time.

Scotgold has entered into an agreement with Swiss firm Fern Wealth to arrange the procurement of up to £3 million in funding from a syndicate of high-net-worth investors to fast-track Cononish.

Day said: “Whilst we achieved slightly lower gold production through the quarter as we developed through the lower grade areas in the mine so as to access the areas of known high grade and set up ‘cut and fill’ stopes, we have focused and delivered on our Q1 2022 objectives.

Scotgold Resources is behind the Cononish gold and silver mine near Tyndrum, which lies in the Loch Lomond and the Trossachs National Park.

“As we enter Q2, we have reached an exciting time in Cononish’s optimisation and production ramp-up.

“By late Q3 2022, when sufficient tunnel development in the mine has been conducted, the original long hole stoping method of mining will commence and we expect to see yet another step change in performance, gold grade accessibility, stability of production and reduced costs per tonne of ore mining.

“Optimising our flagship Cononish gold mine to maximise its intrinsic value remains a core priority for 2022,” he added.