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Scotgold Resources builds gold stockpile after accessing high-grade zones

Mining activity continued uninterrupted throughout June and a second delivery is expected in coming weeks

Scotgold Resources Limited -
The Scotgold team

Scotgold Resources Limited (LON:SGZ) said it encountered high-grade ore zones more quickly than hoped at the Cononish gold and silver project in Scotland.

In recent weeks the AIM-listed company accessed ore at levels that peaked at 40 grammes per tonne (g/t) in a zone where it now plans to continue mining for two months, with expected blended grade averaging above 10 g/t.

Scotgold said it had gained access to higher grade ore zones “far quicker than anticipated” thanks to its strategy of combining consistency and stability of the mine and process plant operations, while opening multiple faces of ore in the underground mine itself.

The volume of ore stored on the stockpile has increased, it added, after mining activity continued uninterrupted throughout June as haulage truck repairs and regular maintenance enabled the use of required mining equipment.

However, a bearing failure in the process plant ball mill hampered efforts to make significant inroads towards achieving full ramp up.

“The issue is expected to be resolved in the coming days but serves to demonstrate the types of ‘one off issues’ that can impact production which are being targeted by the risk analysis approach being implemented by the company at Cononish,” it said. 

Directors said their methodical approach limited unplanned downtime arising from the bearing failure to an almost negligible level and they are “confident that once fully implemented the risk analysis approach will greatly increase the reliability of the mine and process plant operations and enable more consistent runtime”.

The extra ore stockpiled as a result of mining activity is expected to be processed by the plant in due course, Scotgold added, with the aim of making its second shipment in the first half of July.

“Gold doré sent to the refiners in May was able to be refined through normal treatment processes, providing validation of Scotgold's process plant production.”

Another investor update is planned in a month's time.

Quick facts: Scotgold Resources Limited


Price: 73.5 GBX

Market Cap: £41.32 m

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