TIDMSGZ
RNS Number : 2338U
Scotgold Resources Ltd
27 March 2023
27 March 2023
Scotgold Resources Limited ("Scotgold" or the "Company")
Operational and Corporate Update
Notice of Results
Scotgold Resources Limited (AIM: SGZ), Scotland's first
commercial gold producer, announces an operational and corporate
update f or its Cononish Gold and Silver Mine in Scotland
("Cononish").
As announced on 19 January 2023, the Company outlined its 2023
mine operations plan. The mine operations plan was based off the
most recent grade control model and included limited resource
definition drilling information undertaken in 2022. Central to the
2023 mine operations plan was the transition from ore extracted via
level development and cut and fill stoping to long hole stoping
(planned for Q2 2023), as per the original long-term mining plan
for the Cononish Mine. Long hole stope mining is a widely used
mining method in underground mining that supports cost effective
and efficient extraction of ore.
In January 2023 mine development focussed on the 430 West ore
drive, 415 East ore drive and the incline ramp accessing the 445
level. January's development rates continued to improve and was a
record month with 3,003 tonnes of ore mined, and 2,620 tonnes of
ore fed to the process plant. Average grade of the ore processed
was lower than predicted (5.65g/t actual vs 7.35g/t planned of
gold).
In February 2023, development on the 430 West ore drive
continued on ore for an additional 35 metres beyond design
increasing the strike length of the stoping panel above CAF 1 by 45
metres, with the total panel now 115m in length. Per the 2023 mine
operations plan , the 430 West ore drive was expected to deliver
ore continuously as it progressed towards and on top of CAF2 as
this CAF area previously provided high gold grades above 10-12g/t
in 2022. However, as the 430 West ore drive progressed in late
February and into early March 2023, gold grades began to decline
significantly, and the 430 West ore drive turned to waste,
contradicting the grade control model. Total ore production in
February was negatively impacted, with actual 977 tonnes mined and
1,441 tonnes processed .
As a result of the 430 West ore drive turning to waste and the
need to focus on ore production, the Company shifted development
priorities on 3 March 2023 to the 415 East ore drive. In parallel,
plans commenced to bring forward long hole stoping to early April
to secure the short to medium term production profile and enhance
gold production thereafter.
Implications of the ore tonnage mined in February and March
2023
On 9 February 2023, the Company undertook an equity fundraise to
provide funds to support the planned transition from tunnel
development mining to long hole stoping. The Company's mine plan
anticipated that 5,818 tonnes of mineralised ore would be mined in
February and March ahead of the transition to long-hole stoping in
Q2 2023. As detailed above, actual tonnes mines are now expected to
be between 550 and 600 in March and about 3,000 tonnes of waste to
place into required areas for commencement of stope drilling.
The Company's m anagement team continuously assess the cash
position of the Company. A s a result of recent mining performance
being below plan, largely due to lower than expected grades in the
430 West ore drive resulting in the subsequent decision to bring
forward long hole stope mining , the Directors now believe that, in
the event that the planned commencement of long hole stoping in
April is delayed, or the anticipated tonnes of ore mined in April
and the following months is significantly below the current mine
plan, then a material uncertainty would exist that casts
significant doubt over the ability of the consolidated entity to
continue as a going concern in the very immediate term and
therefore its ability to realise its assets and discharge its
liabilities in the normal course of business.
In order to safeguard against this potential shortfall in
working capital over the next few months the Directors have
determined to take steps to strengthen the Company's cash position.
The Company is in advanced discussions with its gold offtake
partner to secure a US$500,000 advance to assist with short-term
working capital. The Directors of the Company have also discussed,
if the need arises , providing a short-term convertible loan as a
measure to ensure the Company continues with the long hole stoping
deliverables as updated in this release.
The ability of the consolidated entity to continue as a going
concern over the long term will remain dependent on the quantity
and grade of ore mined and processed being within a reasonable
tolerance of the forecast quantity and grade and adherence to the
planned product shipment schedule.
Preparation works for long hole stoping - March 2023
Preparation works commenced in March 2023 to start long hole
stope mining in the eastern section of the 430 West ore Drive over
an initial stoping length of 115m (Figure 1). Key works included
level preparation, detailed stope design, drilling markup,
development of safe working procedures, induction, training and
supporting, toolbox topics and communications. The Company is
pleased to note that a development milestone was achieved, as long
hole stope drilling commenced in the first stope panel during the
week of 20 March 2023. Long hole stope mining is on track to
commence in 8 days time with first blasting.
Mining will also continue on the 445 incline ramp to ensure
access to the 445 level and establish further development drives in
areas where the original resource and grade control models support
high confidence mineralisation (Figure 3). This area is also being
designed and rescheduled to support continuous long hole stoping
being achieved in the later part of 2023 as per the 2023 mine plan
announced previously with the aim of achieving full phase
production by Q4 2023. See Figures 1, 2 and 3 which illustrate an
overview of the mine development and long hole stoping activities
commencing this month.
Figure 1: Mining development and March 2023 stoping plan
Figure 2: March stope mining plan grades in 430 West eastern
section (115m stoping length) for April - July 2023 and
thereafter.
Figure 3: Resource model drilling and mine plan - 445 level
planned stoping area for late 2023 (black lines denote original
resource programme drill holes which demonstrated robust gold
grades in the 445 East drive).
Table 1: Operations Performance Development in January and
February 2023
Jan 23 Feb 23
================================ ======= ======
Ore tonnes mined 3003 977
======= ======
Ore Grade (Au g/t) mined 5.65 4.00
======= ======
Waste tonnes mined 2720 1375
======= ======
Total tonnes mined 5723 2352
======= ======
Total metres mined 158 73
======= ======
Total Oz mined 545 126
======= ======
Total Ore fed to process plant 2620 1441
======= ======
Further Corporate updates
In addition, the Company has become aware that the email
accounts of the executive directors have been accessed by
unauthorised persons and specious emails sent in their names to
numerous people. Whilst we believe the vulnerability has been fixed
it is impossible to ever be certain of this. The police have also
been informed on this matter and will continue to investigate.
The Company can also confirm that there have been no serious
health and safety incidents this year. We work in accordance to the
UK's HSC best practice and have a zero-harm safety culture focused
on continuous improvement to achieve an injury free and healthy
work environment.
Notice of Results
The Company will announce its interim results for the six months
ended 31 December 2022 on Thursday 30 March 2023.
**S**
For further information please visit www.scotgoldresources.com
or contact the following:
Scotgold Resources Shore Capital Celicourt Communications
Limited
Nomad and Broker Financial PR
Chief Executive Officer
Toby Gibbs / John More Felicity Winkles/Ariana
Phil Day Fanning
CFO
Sean Duffy
Via Celicourt Communications Tel +44 (0) 20 7408 4090 Tel +44 (0) 208 434
2643
Tel +44 (0) 774 8843
871
Notes
Scotgold Resources Ltd (AIM:SGZ), is Scotland's first commercial
gold producer. The Company poured first gold in November 2020 at
its Cononish Gold and Silver Mine ('Cononish) in Tyndrum, Scotland
and is developing it into a planned +23,500-ounce gold mine per
annum. Cononish is a high-grade underground mining operation with a
central processing plant producing gold concentrate for off-take
and gold doré for the Scottish Jewellery industry. The mine has
anticipated forecast operating costs of c.GBP610 per ounce in Q4
2023, which will place Cononish in the lowest quartile of gold
mining operations globally.
It is Scotgold's vision to build a mid-tier gold mining company
in Scotland with multiple operations in the country that enhance
the local environment and economy in ways that have an enduring
positive impact.
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END
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