Scotgold Resources Limited (LON:SGZ) has provided an update on its progress ramping up production at its newly commissioned Cononish Gold and Silver Mine in Scotland, as well as its exploration activities on the Cononish Project and Grampian Project.
The gold exploration and production company focused on Scotland noted that its ongoing exploration programme is focused on increasing the mineral resources in the area around the Cononish Gold and Silver Mine where first gold pour was achieved on November 30, 2020, further delineating existing prospects, and making new discoveries.
READ: Scotgold Resources continues to build gold production at the newly commissioned Cononish mine
On the production front, Scotgold noted that tonnage throughput for January was negligible as multiple materials handling issues between circuits were identified, which to a large extent have now been addressed The group said the remaining issues restricting throughput are expected to be addressed by the end February 2021.
It noted that the build-up of plant operating labour in January was also slower than planned, as recruitment was impacted by both the Christmas period and Government imposed coronavirus (COVID-19) restrictions.
However, the group said, all major processing components have operated at or above design capacity, and the plant is therefore still expected to reach the full designed production rate of 3,000 tonnes per month.
As a result of the lost production during this ramp-up period, the company said it is reducing its production guidance for 2021 from 9,910 ounces of gold as announced in December 2020, to between 8,700 ounces and 7,800 ounces from between 31,500 tonnes and 28,400 tonnes of ore processed.
On the exploration front, Scotgold said that recent work undertaken across its option areas over the Dalradian Belt has been centred on extending the soil sampling grid over Cononish and the Beinn Udlaidh and Inverchorachan prospects, which lie within the Glen Orchy Central and Inverliever East option areas respectively; applying the Ionic Leach1 method both to stream sediment and soil sampling programmes across the Company's option areas; and reprocessing of geophysical data collected in 2018 and 2019.
The company noted that recent activity has resulted in the identification of additional targets and provided persuasive evidence for the presence of mineralised veins structures, with three prospective areas, close to Cononish Mine, having been identified as high priority target areas and data modelling is in progress to establish the best sites to test these targets in any potential future exploration drill programmes.
In a statement, Richard Gray, Scotgold's CEO commented "Scotgold remains in a strong position to continue our commercial growth trajectory after achieving first gold on 30 November 2020. Despite the frustrating but resolvable materials handling issues that arose this month, our confidence in the ultimate performance of the mine continues to grow. The lessons learnt, as well as opportunities identified, during this Phase 1 ramp-up will be used to optimise our plans for the Phase 2 expansion in 2022.
"The year ahead will also see us advance our exploration programme, which is focused on identifying areas with the potential to increase our Mineral Resources within reach of the Cononish Mine, identifying potential orebodies at Beinn Udlaidh and Inverchorachan and notably making new discoveries within the Company's option areas. We have had encouraging results back with further follow work planned and we look forward to keeping you updated on our findings."