REG - Scotgold Resources - Interim Results

Scotgold ResourcesAnnouncement

30/03/2022 07:00

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RNS Number : 4727G  Scotgold Resources Ltd  30 March 2022

 

30 March 2022

 

Scotgold Resources Limited ("Scotgold" or the "Company")

Interim Results

 

Scotgold Resources Limited (AIM: SGZ), is pleased to announce its Interim
Results for the six months ended 31 December 2021 ('H1 2022').

 

Overview

·    Significant progress made at Cononish Gold and Silver Mine
('Cononish') in Scotland as the Company targets gold production run rate of
c.23,500oz p.a. by end of Q1 2023

·    Vision to build a multi-asset gold production company in Scotland

·    Total revenues of A$6.4m in H1 2022 (H1 2021: nil)

·    Loss before taxation in H1 2022 of A$5.3m (H1 2021: A$2.8m)

·    Cash at 31 December 2021 of A$963k (30 June 2021: A$2.6m)

 

Scotgold Resources CEO, Phil Day said, "It's been a transformative time for
Scotgold which has seen the team work determinedly to deliver on our targets
and maximise value at our flagship Cononish mine. The second half of calendar
year 2021 saw us lay the foundations for growth by implementing initiatives to
increase Cononish's gold recoveries and in turn improve the gold production
profile of the mine.  During the past quarter we have been focused on
preparing the access to the second cut and fill stope at Cononish and I'm
pleased to report we accessed it as of 21 March 2022. This is a pivotal moment
in our mine development plan, allowing us to access reserve mine gold grade
more readily, which should see our gold grades increase significantly inline
with our mine plan during 2022 and beyond.

"I look forward to reporting on our calendar year Q1 2022 production results
in due course, as we continue to implement optimisation initiatives at
Cononish to increase our gold production profile with the target of achieving
a c.23,500oz p.a. production run rate of gold by end of Q1 2023."

Chairman Statement

 

We are Scotland's and the UK's first commercial gold producer, committed to
the principles of sustainable and responsible mining and delivering enduring
value to our employees, stakeholders, and the communities where we operate.
Ultimately our vision is to build a multi-asset gold mining company in
Scotland by investing and effectively managing our portfolio of producing and
exploration assets.

 

Our principal asset, Cononish in Tyndrum, Scotland, is a
high-grade/high-margin underground mining operation with a central processing
plant producing both gold concentrate and gold doré.

 

I am pleased to report on the progress we have made during the period under
review, where we continue to implement optimisation initiatives at Cononish to
achieve gold production of c.23,500oz p.a. run rate by end of Q1 2023.

 

Considerable progress was made H1 2022 seeing us successfully ramp up
production, in line with our accelerated expansion plan. To this end, calendar
year Q4 2021 saw us produce 1,508 ounces of gold and 7,200 ounces of silver
from Cononish with the month of December 2021 being a record month in terms of
gold concentrate with 101 tonnes produced to date.  The concentrate grade
equated to around 700 ounces of contained gold and 3,000 ounces of contained
silver and marked a c.60% increase to the Company's previous record monthly
concentrate production.

 

As previously announced in our strategy update (see press release 14.01.22 and
our AGM presentation), 2022 is focused on growth. Growth in terms of
continuing to implement optimisation initiatives centred on maximising mining
efficiencies and improving the production profile of Cononish in line with our
stated targets.  We have now completed Phase 1 of our production development
at Cononish, achieving 9,910oz average run rate of gold production per annum.
The end of Q2 2022 will see us commence our Optimisation Phase of development
targeting an average annual run rate of gold production of 17,500oz, again in
line with our stated targets. To do this we plan to introduce a number of
optimisation initiatives, for which we are in discussions with debt providers
to fast-tack implementation. We are looking to introduce a tailings thickener,
a cost-effective technology to improve the throughput and recoveries of
concentrate product in the processing plant and continue to enhance mining
efficiencies of the underground mine to ensure 24hr support. As previously
announced, we are currently waiting on a due diligence report regarding
installing an ore sorter at the processing plant between the existing crushing
unit and the mill. We believe, if installed, it will increase the ounces of
gold processed per tonne at lower tonnages and potentially lower CAPEX and
OPEX of Cononish.  If approved, the ore sorter is planned to be operational
by the end of Q1 2023 and will help achieve Phase 2/Expansion Production
Development with the target of achieving average annual run rate gold
production of 23,500oz.

 

Figure 1. Cononish Phased production development plan

 Phased Production Development  Expected to commence by end  Annual Rate of Ore Production  Target Average Annual Rate of Gold Production
 Phase 1                        Q1 2022                      36,000 tonnes                  9,910oz
 Optimisation Phase Production  Q2 2022                      51,000 tonnes                  17,500oz
 Phase2/Expansion Phase         Q1 2023                      72,000 tonnes                  23,500oz

 

Whilst concentrating on the mine optimisation and ramp-up production plans of
Cononish has been our priority during 2021 and 2022, our overarching vision is
to build the Company into a multi-asset gold production company in Scotland
that enhances the local environment and economy in ways that have an enduring
positive impact. We have 13 licences covering a significant 2,900km position
of the Dalradian Belt and have identified three prospective areas, close to
Cononish. It's our intention to explore these as part of our wider growth
strategy.

 

We have a commitment to sustainability and embrace the principles of
sustainability in all aspects of our business. Operating in Scotland's first
national park, we have an important duty of care to the environment.  As part
of our commitment to sustainability we have also undertaken numerous
initiatives including no use of cyanide at Cononish and implementing dry stack
tailings, rather than conventional wet tailings that sadly have seen terrible
mismanagement and accidents over the years at mine sites globally. Dry stack
tailings are much more environmentally friendly and safer as it completely
dries the tailings into sand like material before placing into gullies. This
allows us to fill the gullies to match the natural landscape rather than have
impoundments (as with conventional tailings) that would impact the look of the
landscape for generations to come. In line with our commitment to reduce CO2
emissions we are reviewing the use of hydro power at site and will update the
market accordingly on this initiative.

 

Importantly, we are supported and driven by our people. As at 31 December we
had 73 employees which has increased 27% to 93 employees as of 28 February
2022. We have ambitious growth plans to continue to increase our headcount
during 2022. We are led by an experienced executive leadership team with a
proven track record that will help us to deliver on our vision an in-turn
generate value for all stakeholders.

 

I would like to extend my gratitude, firstly to the team here in Scotland who
have worked tirelessly and with conviction during the past year to deliver on
production targets. I would also like to thank my fellow board members,
leadership team, advisors, and shareholders for their continued support. We
remain confident of our 2022 outlook and look forward to updating the market
on our progress with our upcoming calendar year Q1 2022 production results to
be announced shortly and other operational updates throughout the year.

 

Chairman

Peter Hetherington

 

 

A full version of Scotgold's Interims for the six months ended 31 December
2021 is available via the Company's website or via the following
link. http://www.rns-pdf.londonstockexchange.com/rns/4727G_1-2022-3-29.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/4727G_1-2022-3-29.pdf)

 

For further information please visit www.scotgoldresources.com
(http://www.scotgoldresources.com) or contact the following:

 

 Scotgold Resources Limited  SP Angel Corporate Finance LLP   Celicourt Communications

 Chief Executive Officer     Nomad and Broker                 Financial PR

 Philip Day                  Ewan Leggat / Charlie Bouverat   Felicity Winkles

                             Tel +44 (0) 20 3470 0470         Tel +44 (0) 208 434 2643

                                                              Tel +44 (0) 774 8843 871

 

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