REG - Scotgold Resources - Operations Update: Optimisation, Production, Sales

Scotgold ResourcesAnnouncement

22/09/2022 07:00

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RNS Number : 2241A  Scotgold Resources Ltd  22 September 2022

22 September 2022

 

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

Operations Update - Optimisation Initiatives, Production and Sales

 

Scotgold Resources Limited (AIM: SGZ), Scotland's first commercial gold
producer, announces an operations, production and sales update for its
Cononish Gold and Silver Mine in Scotland ("Cononish") as it continues to
deliver optimisation initiatives to increase efficiencies, mining rates, gold
recovery and production in line with the Company's objective to achieve Phase
2 production levels of 23,500 ounces p.a. run rate of gold.

 

Optimisation Initiatives

·    Underground power and ventilation upgrades to improve access,
operations and increase mining rate and ore extraction completed in late
August.

·    Debottlenecking of process plant areas, such as flotation and
tailings filtration, completed enhancing gold recoveries and efficiencies
beyond management's initial expectations. This enables the plant to process up
to c.4,000 tonnes of feed per month prior to installation of tailings
thickener (a 33% increase in previous capacity at this point).

·    Tailings thickener erected in the processing plant with construction
well under way. Planned commissioning moved to Q4 2022 to enable smooth
implementation inline with increased throughput of ore from the
debottlenecking initiative. Following commissioning, the process plant is
estimated to achieve c.5,000 tonnes per month throughput (an 11% increase to
previous estimates).

·    Further optimisations of process plant tailings filter (adding
further filter plates to the tailings filter and minor modifications around
the Ball Mill and flotation areas) planned for Q4 2022 to further increase
throughput of the processing plant to c.6,000 tonnes per month to achieve
production levels of 23,500 ounces p.a. run rate of gold.

 

Cononish Gold Production

·    Q3 2022 (3 months to 30 September 2022) revised production guidance
of c.2,000 ounces of gold (previous guidance of 2,900 to 3,500 ounces of gold)
due to the successful but delayed commissioning of the power and ventilation
project, delaying mine development on the waste ramp which allows access to
cut and fill stope 3.

·    With underground power and ventilation upgrades and incremental
debottlenecking of process plant completed, throughput has increased to
c.4,000 tonnes of feed per month. Q4 2022 production is expected to be in line
with mine plan and significantly ahead of Q2 / Q3 2022 production and achieve
Optimisation Phase Production run rate of c.16,000 ounces p.a. of gold. This
is a significant step towards achieving Phase 2 production levels of 23,500
ounces p.a. run rate of gold as planned by end of Q1 2023.

 

Gold Sales

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

 

Scotgold Resources CEO, Phil Day 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.

 

"Notwithstanding the reduction in gold production in late August/early
September and consequent knock-on reduction of Q3 2022 guidance to c.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 c.4,000 tonnes per
month (from 3,000 tonnes per month in Q2 2022) and this is targeted to
increase to c.5,000 tonnes per month when the tailings thickener comes online
and then again to c.6,000 tonnes per month with further optimisation of the
plant in Q4 2022. We remain on track to deliver Phase 2 of Cononish's ramp up
and annualised production levels of 23,500-ounces of gold by the end of Q1 in
2023."

 

Investor Webcast - Monday 26 September 14:00 BST

The Company will host a live investor webcast via the Investor Meet Company
(IMC) on Monday 26 September at 14:00 BST, followed by an opportunity to ask
questions.

 

Investors can sign up to Investor Meet Company for free and add "Scotgold
Resources" via the following link to join the webinar:

 

https://www.investormeetcompany.com/scotgold-resources-limited/register-investor
(https://www.investormeetcompany.com/scotgold-resources-limited/register-investor)

 

The information contained within this Announcement is deemed by the Company to
constitute inside information as stipulated under Article 7 of the Market
Abuse Regulation (EU) No. 596/2014 (as amended) as it forms part of the
domestic law of the United Kingdom by virtue of the European Union
(Withdrawal) Act 2018 (as amended). Upon the publication of this Announcement
via the Regulatory Information Service, this inside information is now
considered to be in the public domain.

 

 

**ENDS**

 Scotgold Resources Limited    Shore Capital            Celicourt Communications

 Chief Executive Officer       Nomad and Broker         Financial PR

 Phil Day                      Toby Gibbs / John More   Felicity Winkles

 Via Celicourt Communications  Tel +44 (0)20 7408 4090  Tel +44 (0) 208 434 2643

                                                        Tel +44 (0) 774 8843 871

 

Notes

 

Scotgold Resources Ltd (AIM: SGZ), is Scotland's and the UK's first commercial
gold producer. The Company poured first gold in November 2020 at its Cononish
Gold and Silver Mine ('Cononish') in Tyndrum, Scotland and is developing it
into a +23,500-ounce gold mine per annum by the end of Q1 2023. Cononish is a
high-grade underground mining operation with a central processing plant
producing gold concentrate for off-take and gold doré for the Scottish
Jewellery industry.  Once in full production, the mine has anticipated
forecast operating costs of c.£544/oz AISC, which will place Cononish in the
lowest quartile of gold mining operations globally.

 

It is Scotgold's vision to build a mid-tier gold mining company in Scotland
with multiple operations in the country that enhance the local environment and
economy in ways that have an enduring positive impact.

 

 

 

 

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