By Ian McConnell
Business Editor
THE company developing the Cononish gold mine near Tyndrum in Argyll has struck a deal aimed at securing up to £3 million of loan funding to support the ramping up of its production at the site.
Scotgold Resources said yesterday it had entered into an agreement with Swiss group Fern Wealth to “arrange the procurement of loan funding” of up to £3 million from a syndicate of high net worth investors.
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The miner added: “Subject to the successful procurement of the new loans, the company intends to use the proceeds received to fast-track the company’s optimisation initiatives to achieve a gold production run rate of [circa] 23,500 oz (ounces) p.a. (per annum) by the end of Q1 2023. Further announcements will be made in due course.”
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It said the “core optimisation initiatives” planned for 2022 include the design, construction and commissioning of a “tailings thickener”, which it described as “a cost-effective technology to improve the throughput and recoveries of concentrate product in the processing plant”. It flagged its aim, with this investment, of achieving a “monthly run rate of [circa] 4,000 feed tonnes to the process plant by end of Q2 2022 which equates to [circa] 16,000 to 17,500 ounces p.a. run rate of gold by the end of Q2 2022”.
Scotgold also highlighted its plans to enhance “mining efficiencies of the underground mine to ensure continuous operations”.
It also proposes the design, construction and commissioning of an ore sorter at the processing plant, between the existing crushing unit and the mill, to realise “an increase in ounces of gold processed per tonne at lower tonnages” and potentially lower capital spending and operational expenditure. Scotgold said due diligence on this proposed investment is due to be completed by the end of the second quarter, highlighting plans for the sorter, if approved, to be operational by next March.
The company last week flagged its growth ambitions as it unveiled revenues of A$6.4 million (£3.65m) for the first half of its financial year.
Scotgold, which has been ramping up activity at Cononish after spending years working on the prospect, had no revenue in its previous first half to December 2020.
The company posted a pre-tax loss of A$5.3m (£3.03m) for the six months to December 31, 2021. It made a pre-tax loss of A$2.8m (£1.6m) in the first half of its prior financial year. It noted it had in the October to December 2021 quarter produced 1,508 ounces of gold and 7,200 ounces of silver from Cononish.
Chairman Peter Hetherington highlighted a “vision” to “build a multi-asset gold production company in Scotland”. He said: “We have 13 licences covering a significant 2,900 [square-kilometre] position of the Dalradian Belt and have identified three prospective areas, close to Cononish. It’s our intention to explore these as part of our wider growth strategy.”
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