SCOTGOLD has received a massive boost after clinching its first major sale of precious metal from its Argyll mine and successfully auctioning the first gold to ever be commercially mined in Scotland.
The listed mining company has signed a deal with Ocean Partners, the Dutch-based metals trading specialist, for the sale of up to 120 tonnes of gold rich pyrite concentrate.
The deal was announced on the day Scotgold revealed it fetched £21,000 from the sale of the first “round” of Scottish gold from its mine at Cononish, in an auction held by accountancy firm Scott-Moncrieff.
A total of 10 rounds were successfully auctioned, with the lots fetching an average of £4,557.9 per pounce - a 378 per cent premium on the current £953 spot price.
Each of the rounds were minted by Baird & Co Bullion Merchants and stamped with the Scottish Gold Mark of the stag’s head.
Scotgold chief executive Richard Gray signalled his hope of following the auction by securing its first deals with the Scottish jewellery trade in the New Year.
He said: “This unique and historic event is the first demonstration of our ability to attract a premium for Scottish gold.
“The next opportunity to show the continued support for this precious metal from the Highlands will be the conclusion of agreements with members of the Scottish jewellery trade, who appreciate the value that can be added to their products by the proven provenance of the stag’s head Scottish Gold Mark.”
Meanwhile, the concentrate acquired by Ocean Partners will be yielded by the bulk processing trial (BPT) Scotgold is carrying out on a stockpile at its Cononish mine at Tyndrum. Scotgold noted yesterday that the first shipment to Ocean Partners’ premises in The Netherlands will take place as soon as the logistical arrangements can be made, having now accumulated a cost-effective shipping load.
The company estimates that 91 ounces of gold can be extracted from 1,100 tonnes of treated stockpile material at the site, with the metal contained within the 13.5 tonnes of pyrite concentrate which had been generated by the trial by October 26.
So far the company has generated 17 oz of refined Scottish gold as a result of work undertaken by SGS United Kingdom, an Aberdeen-based inspection, verification and testing specialist, and metals analyst Wheal Jane Laboratory in Cornwall.
The work has centred on extracting gold and silver from gold rich galena concentrate generated by the BPT.
Scotgold explained the refined gold has been yielded using gravity methods (tabling) to extract around 40 per cent of the “free gravity gold” contained within the concentrate.
The company added that the work has demonstrated that nearly 100 per cent of the gold contained within the galena concentrate can be extracted by a thermal process called cupellation at Wheal Jane’s premises.
With the Edinburgh Assay Office now expected to be able to establish and certify a chain of custody, which includes Wheal Jane and Baird & Co, Scotgold declared that it is now looking forward to being able to supply greater volumes of gold of proven provenance to the Scottish jewellery trade in the next phase of its marketing.
Scotgold chief executive Richard Gray said: “We continue to find opportunities to improve the BPT and, more importantly, the ultimate development plan for the Cononish mine. The technical work to verify these potential opportunities is ongoing and we anticipate an update to the Cononish BFS to be completed in Q1, 2017.”
Yesterday’s update came after the company said in October that its BPT had pinpointed the opportunity to increase the amount of gold available when full production is up and running. It estimated then that the six-month BPT, which began earlier this year, would produce between 75oz and 100oz for the jewellery trade.
At the time, Mr Gray hailed the “potentially positive implications for the future development of Cononish”.
He added: “We also look forward to achieving our first sales of Scottish gold at a premium to spot price before the end of this year.”
Shares in Scotgold, which de-listed from the Australian Stock Exchange earlier this year, closed up 3.33 per cent, or 0.02p, at 0.62p.
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