Scotgold Resources to raise fresh funds but insists Highland gold mine plans remain on track

Scotgold Resources, the company behind the Cononish gold and silver mine near Tyndrum on the West Highland Way, said its mining plans were getting back on track in the new year after a “challenging” December.

The firm has now set its 2023 production guidance at between 11,500 and 13,500 ounces of gold, with the aim of achieving a “sustainable ramp up” to 2,000 ounces per month. Last year, gold production totalled 8,564 ounces, more than three times the quantity produced in 2021. During 2022, gold concentrate shipments totalled 1,078 tonnes with a sales value of £11.9 million.

Bosses said that as a result of impacted gold production in the final quarter of last year and consequent sales the company’s financial and working capital position has been “adversely affected”. The firm is said to be working on additional funding to support the delivery of its 2023 mine plan.

Chief executive Phil Day said: “2022 has been a year of significant development at Cononish. Advancing a mine and transitioning from development through to a long-term mining method, such as stoping, is always challenging, however I am pleased with the significant progress that has been made over the past year and would like to again thank our dedicated team that has helped build Cononish into the operational mine it is today, with over 100 employees.

“December 2022 has been by far our most challenging period in terms of the underground mine development, which has put significant short-term strains on the business. However, mining in the new year has been progressing well and in line with the mining plan. Our 2023 mine plan is focused on high grade and increasing ounce production, which in turn with lowering cost per ounce as the mine moves towards full production will generate significant cash generation per ounce,” he added.

Last month, Scotgold said it was looking to ramp up its headcount as it targets further mines in the area. Unveiling full-year results, chairman Peter Hetherington noted that the group held 13 licences, covering 2,900 square kilometres of the Dalradian Belt across the Grampian mountain range. He said the group planned to continue to increase the headcount during the coming year.