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Delayed upgrades prompt Scotgold to cut Q3 production targets

Cononish’s mine plant construction. (Image courtesy of Scotgold Resources.)

Scotgold Resources (LON: SGZ) has cut its gold production guidance for the third quarter due to delays in commissioning optimization initiatives at its Cononish operation in Scotland, the country’s first commercial gold mine.

The company now expects to produce around 2,000 ounces of gold for the three months to Sep. 30, down from a previous range of between 2,900 and 3,500 ounces.

It attributed the downgrade to the successful, but late commissioning of the power and ventilation project, which delayed mine development on the waste ramp.

Scotgold expects output in the fourth quarter to come “significantly” ahead of the previous two quarters thanks to a series of upgrades to improve access, operations as well as mining rates and ore extraction quantities.

“I am hugely encouraged by progress to date, which sees the majority of optimisation initiatives completed, strongly placing us for Q4 2022 and Q1 2023, driving the production ramp up towards Phase 2” chief executive Phil Day said in the statement.

The process plant’s current throughput increased to around 4,000 tonnes a month, from 3,000 tonnes a month in the second quarter. The miner’s goal is to achieve 6,000 tonnes a month following further optimizations in the fourth quarter.

Together with power and ventilation upgrades, the Scottish gold producer worked on debottlenecking process plant areas, such as flotation and tailings filtration.

These activities are part of the company’s plan to achieve Phase 2 production levels of 23,500 ounces a year by the end of the first quarter in 2023.

Scotgold, which received initial approval for Cononish in 2018, poured first gold in December 2020 and achieved commercial production at the mine in July this year.