Scotgold Resources Ltd (LON:SGZ) said it resolved the various outstanding technical issues affecting the processing plant at the Cononish gold project in the Grampians, Scotland.
The plant is now operating consistently and the current focus is on ramping up to full design capacity.
The company commenced a review of the mine plan for Cononish at the beginning of April 2021 and concluded the ramp up of underground mining production will be slower than originally planned.
Mine development is insufficient to provide optimal ore quantity and quality in the short term. No long-term impact is predicted.
The mine team at Scotgold has undergone a reshuffle in leadership and approach to ensure it can deliver reliable and robust short term mine plans. Accordingly, the company expects production for calendar year 2021 to be materially less than the guidance range previously announced on 31 March 2021.
A further update in connection with the ramp-up of production, including new estimates for ore to be processed and gold to be produced for the calendar year 2021 will be announced as soon as the company has completed the review of the mine plan for Cononish.
The recent delays to the production ramp-up are expected to have a negative impact on the company's cash position.
To ensure the company has adequate funds available for working capital through this production ramp up period, it is investigating financing options, including short-term debt financing from the directors.