29 Aug Scottish junior miner estimates significantly improved returns from gold mine
AIM-listed miner Scotgold Resources has estimated ‘significantly improved’ returns from its Cononish gold and silver project in Scotland, in light of recent improvements in the gold price.
In a project update, Scotgold said it had re-estimated its life of mine financial model for Cononish, with the new earnings figure rising to £147 million from £101 million, based on a gold price of £1,200 an ounce.
The Scottish junior also confirmed that the mine development is on schedule, with access to ore expected by the end of 2019. However, the construction of the process plant is behind schedule, meaning that first gold production has been delayed by three months to February 2020.
This perceived delay has also resulted in Scotgold revising its funding requirements by an additional £2.5 million, which will be addressed by an extension to an existing bridge barn loan facility and a subscription of around 3.3 million new shares.
“Overall progress on the development of Cononish is pleasing,” said CEO Richard Gray. “There is a short delay in production of first gold from our previous expectations, but a stockpile of ore will be accumulated during this period which will provide an opportunity to exceed targets later in the year.”
Gray added that a combination of the high gold price and the pipeline of projects from exploration work at Grampian – Scotgold’s other gold asset – bode well for the company’s long-term outlook.