SCOTGOLD Resources' shares dipped as it revised down production guidance after a short-term equipment set-up delay.

Production at the Cononish mine was put at around 2,000 ounces of gold against previous guidance of 2,900 to 3,500 ounces for the three months to September 30, because of the delayed commissioning of its power and ventilation project, which is now successfully completed.

The slight scale of the decrease in share value may indicate investors were reassured the mine is on track for its annualised target of 23,500 ounces of gold by the end of the first quarter next year, while the delay is negated by the increase in output.

“With underground power and ventilation upgrades and incremental debottlenecking of process plant completed, throughput has increased to 4,000 tonnes of feed per month,” Scotgold said.

Quarter four production is expected to be in line with expectations and significantly ahead of the second and third quarters, with a run rate of 16,000 ounces per annum of gold.


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This is a "significant step" towards achieving phase two production levels of a 23,500 ounces per annum run rate of gold as planned by end of quarter one, 2023, it said.

July and August gold concentrate shipments totalled 214 tonnes with a sales value of £2.6 million.

Scotgold said underground power and ventilation upgrades to improve access, operations and increase mining rate and ore extraction were completed in late August.

The debottlenecking of process plant areas, such as flotation and tailings filtration, was also completed “enhancing gold recoveries and efficiencies beyond management’s initial expectations”.

It said: “This enables the plant to process up to 4,000 tonnes of feed per month prior to installation of tailings thickener – which is a 33 per cent increase in previous capacity at this point.

The tailings thickener is set up in the processing plant with construction “well under way”. Planned commissioning moved to the last quarter of this year “to enable smooth implementation in-line with increased throughput of ore from the debottlenecking initiative”.

Cononish, near Tyndrum. By Colin MearnsSource: London Stock Exchange

The process plant is estimated to achieve 5,000 tonnes per month throughput, which is an 11% increase to previous estimates.

It said in its third quarter update it could add further filter plates to the tailings filter and minor modifications around the ball mill and flotation areas in the process to further increase throughput of the processing plant to 6,000 tonnes per month to achieve production levels of 23,500 ounces per annum.

Phil Day, Scotgold Resources chief executive, said: “We achieved commercial production in July 2022 and continue to operate as a cash generative business.

“I am hugely encouraged by progress to date, which sees the majority of optimisation initiatives completed, strongly placing us for Q4 2022 and Q1 2023, driving the production ramp up towards Phase 2, and indeed margins, cash generation and profitability, in line with our stated strategy.”

Cononish, near Tyndrum. By Colin MearnsPhil Day, Scotgold chief executive, at Cononish. Colin Mearns

He also said: “Notwithstanding the reduction in gold production in late August/early September and consequent knock-on reduction of Q3 2022 guidance to 2,000 ounces of gold, due to the successful, but delayed implementation of the power and ventilation upgrades - I am excited looking ahead.

"The delayed ore extraction from the mine will be negated by the recent upgrades in power and ventilation and Q4 2022/Q1 2023 are set to be very robust quarters in line with our mine plan and forecast to see a significant increase to Q2 and Q3 2022 production.

“The process plant current throughput has increased to 4,000 tonnes per month, from 3,000 tonnes per month in Q2 2022, and this is targeted to increase to 5,000 tonnes per month when the tailings thickener comes online and then again to 6,000 tonnes per month with further optimisation of the plant in Q4 2022.

“We remain on track to deliver Phase Two of Cononish’s ramp up and annualised production levels of 23,500 ounces of gold by the end of Q1 in 2023.”

Shares in Scotgold Resources closed down 2p, or 3%, 64.5p.