Scotgold Resources (LON: SGZ) has found “encouraging” signs of more precious metals at its Cononish gold and silver project in Scotland’s Highlands, which is expected to pour first gold by November 30.
The company said this week that soil samples to the northeast of the project’s area suggest the gold and silver structures may extend further than initially expected.
Located in the Highlands north of Glasgow, the Cononish project is slated to become Scotland’s first commercial gold mine.
The project has faced several delays, with first production pushed out to May 2020 to make site modifications. The date was further postponed later due to interruptions caused by the coronavirus pandemic.
Construction and development activities at the Cononish project, which were suspended between March 27 and June 15 to comply with the Scottish government’s emergency measures, continue to move forward, the company said.
Scotgold is now advancing the gold and silver anomalies identified at Beinn Udlaidh and Inverchorachan. It also hopes to make new discoveries on the Dalradian belt.
The asset produced its first gold in August 2016 following the launch of an ore processing trial. After the local authorities gave the project their blessing, the company began building a large-scale operation.
Scotgold envisions an underground mine with an initial production capacity of 23,370 ounces of gold annually, for up to nine years.
The company expects to process around 3,000 tonnes of ore per month in the first phase, and it says processing will double in phase two.
The project currently has estimated reserves of 550,000 tonnes at a grade of 11.8 g/t Au, which, at an average production rate of 23,370 ounces per year, equates to a nine-year life-of-mine. The company had previously stated that there is the potential to improve on this in the future.