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Scotgold Resources: DEEP DIVE

Scotgold’s Cononish gold mine is ticking all the right boxes

Scotgold will pour its first gold at Cononish before the year end
Scotgold’s Cononish gold mine is ticking all the right boxes
OVERVIEW: SGZ The Big Picture
Scotgold's Richard Gray
  • Low cost gold mine

  • Politically safe jurisdiction

  • Significant exploration upside

  • Premium likely to be offered for Scottish gold


What Scotgold does

Scotgold Resources LTD (LON:SGZ) is the premier gold exploration and development company in Scotland. The company is backed by entrepreneur Nat Le Roux and run by experienced mining engineer Richard Gray, late of Avocet Mining and Gencor.

What Scotgold owns

Scotgold owns the Cononish gold project in the Grampian region of Scotland. The site of much early stage development work in the past, Scotgold has been working for some years to bring the project all the way into production, with strong support from the local community in the nearby town of Tyndrum. The company also has extensive exploration ground in and around Cononish as well as farther afield. The main priority is production, but looking further out it’s possible that exploration work could yield another Cononish, or even, as Richard Gray occasionally speculates, a mine comparable to the one being developed by Dalradian across the Irish Sea. The regional geology is similar, so the upside is very real.

Building Scotland’s only significant gold mine

Phase one of the Cononish mine plan envisages a mining rate of 3,000 tonnes per month to give gold production of 12,000 ounces of gold per year. It’s anticipated that this level will be reached sometime in mid-to-late 2020. At that point, the company will then turn its thoughts to developing stage two of the mine, which will double production to 24,000 ounces on a fairly minimal capital outlay.

Exploration upside could be sizeable

Scotgold is now using new ionic leach techniques to conduct its exploration, as previous work had tended to indicate the huge potential of its ground without the company being able to pin down specific targets. According to Richard Gray, ionic leaching is a much more sensitive tool and more effective in the Cononish area than standard soil sampling.

The discovery of a project comparable in size to Cononish is a reasonable expectation, although the upside could be something much larger. The proof will come with drilling, and that will probably have to wait until production is well established.

Chief executive Richard Gray excited about the future

“It’s exciting,” says Richard Gray.

“We’re on the move. We’re on schedule on the mining side, the exploration blue sky is significant and our cash position is fine.”

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