Production and Optimisation During the quarter ended
During Q4 2021 production continued to be ramped up in line with the mine plan re-design and Phase 1 Ramp-up production is near completion, with 6,168 tonnes of ore fed to the processing plant. Whilst strong operational progress has been made at Cononish during Q4 2021, November 2021's underground development and production was negatively impacted by Covid-19 related supply issues for explosives, that are used to blast the mine face for ore extraction. This meant that 1,011 ounces of gold were produced in November and
However, the Company is delighted to report that in
This focus on mine development is very normal in underground mines and is well understood to come with some risk of grade variability. That grade variability has been experienced over the past two weeks with low grade ore being produced. We have limited knowledge when this will improve and as a result the Company's working capital remains challenging. As such, the Board has taken the prudent decision to accept an additional loan of
Additional financing may be required if the grade remains poor until the Company is able to access the next 'cut and stope' area in Q2 2022. In Q3 2022, Scotgold plans to commence retreat long hole stoping, as per the original mine design, which will significantly transform the ability to access reserve mine gold grade more readily. Additionally, the focus in Q1-Q2 2022, will be the implementation of several low-capex processing plant and mine optimisation initiatives by the end Q2 2022. The planned tailings thickener is expected to provide significant optimisation to the throughout of the processing plant. As such, Scotgold has a target of achieving Optimisation Phase Production monthly run rate of c. 4,000 feed tonnes to the process plant by end of Q2 2022 ramping up to 4,500 feed tonnes by Q4 2022 which equates to c 16,000 - 17,500 ounces p.a. run rate of gold by the end of Q2 2022
It is the Company's plan to continue to increase the production rates of its processing plant and achieve Phase 2 production at Cononish - this entails achieving a run rate of 23,500 ounces of gold per annum. Scotgold is completing due diligence work to determine whether to install an Ore Sorter between the existing crushing unit and the Mill. The installed crushing unit is already designed for the Phase 2 production rate so will not require expansion. This option will realise an increase in ounces of gold processed per tonne at lower tonnages and potentially lower CAPEX and OPEX. A significant benefit includes the reduction of fine tailings generated from the processing plant, which is a constraint to the expansion of Cononish's Reserves. We expect the due diligence to be completed by the end of Q2 2022 and the sorter, if approved, to be operational by the end of Q1 2023. The alternative is to install a further Mill and downstream processing capacity as per the original Phase 2 mine plan upgrade.
Contact:
Tel: +44 (0) 20 3470 0470
Once in full production, the mine has anticipated forecast operating costs of c.
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