THE chief executive of the company mining for gold in Argyll has declared it is “now on the correct growth trajectory to realise the full potential” of the Cononish site.

Scotgold Resources revealed production revenues had exceeded operational costs for a second consecutive month in September at the mine, near Tyndrum.

It said yesterday that it had produced approximately 62 tonnes of gold concentrate during September, up by around 24 per cent from about 50 tonnes in August.

However, it cited the presence of “quartz in the ore” as a “current barrier to achieving higher throughputs” in its processing operations.

Shares in Scotgold dipped by 3.5p to 82.5p.

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Phil Day, chief executive of Scotgold, said: “The operational turnaround at Cononish continues to gain pace and we are really encouraged by the performance of the mine and the overall improvement in our production profile.”

He added: “Importantly, September marked our second month where production revenues exceeded operational costs and we are confident that we are now on the correct growth trajectory to realise the full potential of Cononish.”

Scotgold highlighted its move, from a cost perspective, to reduce its use of external contractors.

It flagged the success of its human resources unit in bringing in new members of the operational team. The company underlined the importance of this to supporting round-the clock operation of the gold and silver mine and processing operation.

Scotgold said:“In parallel with improving revenue figures, Scotgold also completed a cost-base optimisation which focused on removing inefficiency such as use of external contractors and reducing fixed costs.

“The HR team had a successful month onboarding new members of the operational team exactly in line with expectations and supports continuous 24-hour operation for the mine and process plant.”

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Updating on operations at the site, Scotgold flagged measures being taken to make the replacement of “various wear parts” of its processing plant “more scheduled”, to boost throughput.

Scotgold said: “The process plant is continuing to operate encouragingly, and the team is focusing on achieving more consistent runtime to allow for increased production.

“The current barrier to achieving higher throughputs relates to the quartz in the ore, which causes higher wear on certain parts of the process plant.”

It added: “The Scotgold team is capitalising on this information to fine-tune the intervals for replacing various wear parts and as such, the management expects that the change-outs will become more scheduled using the company’s planned maintenance system which will result in higher throughput per month.”

Giving details of September production, Scotgold said: “Approximately 62 tonnes of concentrate were produced during September, an increase of roughly 24% over the previous month. The concentrate graded at an average of about 311 g/t (grammes per tonne)[of] gold equating to around 580oz (ounces) of contained gold and 1,200 g/t [of] silver equating to [greater than] 2,400oz of contained silver total production for the month.”

It noted the comparative figures for August were greater than 450oz of contained gold and in excess of 1,900oz of contained silver.

Giving further details of its processing operations and planned gold sales, the company said: “The gravity circuit is also now consistently operational and during October it will be optimised to commence providing gold to Scotgold’s partners in the jewellery industry this quarter.”