SHARES in Scotgold Resources plunged more than 20 per cent in early trading after the company warned delays in the ramp-up of production at its Cononish gold mine near Tyndrum will have a “negative impact” on its cash position.

The company told the City this morning that it is now investigating financing options, including short-term debt financing from directors, to ensure it has “adequate” working capital through the ramp-up period.

The update comes after a review of the mine plan for Cononish in early April concluded that the ramp-up of underground mining production will be slower than initially planned. Scotgold said the mine development is insufficient for it to provide optimal ore quantity and quality in the short term, but noted that this is not predicted to have long-term impacts.

The company now expects production for the 2021 calendar year to materially less than the guidance previously announced on March 31.

The latest update comes after the leadership team at Scotgold was reshuffled. Richard Gray was replaced as chief executive by mining industry veteran Phillip Day in April.

Scotgold said this morning that it has resolved outstanding technical issues affecting the processing plant at Cononish, which it declared was operating consistently.

Shares were down nearly 22 per cent, or 14.9p, at 55.6p at around 10.15am.