SCOTGOLD, which is developing Scotland’s only gold mine, has hailed its “strongest quarter yet” amid record gold production which has exceeded its guidance, and sales of £5 million.

The firm said in its second quarter production, sales, and operations update to the City that gold production at the Cononish mine near Tyndrum in Argyll totalled 3,531 ounces, a 188 per cent increase to the previous quarter, and above the guidance which was between 2,600 to 3,200 ounces.

Gold production guidance for the next quarter has been set at between 2,900 to 3,500 ounces.

It said record gold concentrate production in June 2022 of 164 tonnes of concentrate were processed, equating to 1,339 ounces of contained gold, a 17% increase to its previous concentrate production record set in April.

Scotgold said gold concentrate shipments totalled 415 tonnes worth £5m, and for the first half gold concentrate shipments totalled 551 tonnes with a sales value of £6.3m, against £2.6m for the final quarter last year.

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The company received the second tranche of the Fern Wealth debt facility totalling £2.1m of a £3m loan, and revenue earned in the second quarter will help pay for the mine optimisation and tailings thickener initiatives.

The new pre-constructed tailings thickener is now on site where it is planned for installation during the third quarter and once operational is expected a gold ounces run-rate of 16,500 to 17,500 ounces of gold on an annualised basis.

Phil Day, Scotgold chief executive, said the arrival of the thickener will "bolster throughput of ore, generating further increases in gold concentrate output".

“This has been our strongest quarter yet for Scotgold, characterised by record gold production which exceeded guidance, record gold sales translating into significant cash generation and continued progress on the ground to meet our production and operational targets," he said.

"In the short term, we are focusing on our transitional optimisations at Cononish, undertaking low capex initiatives to continue to drive the production ramp up.

"Furthermore, with our 2022 mine development work, we continue to move rapidly towards phase two production levels of 23,500 oz run rate of gold."

Shares in Scotgold were up 9% in early trading and closed up 6.9%, or 5p, at 77.5p.