SGZ.L Share News (SGZ)

(Sharecast News) - Scotland-focussed gold exploration and production company Scotgold Resources updated the market on mine production and processing performance at the Cononish Gold and Silver Project on Friday, reporting that high-grade ore zones had been accessed much quicker than expected.
The AIM-traded firm said its dual focus was to further enhance safe production through consistency and stability of mine and process plant operations, while also the opening of multiple faces of ore in the underground mine itself.

During June, it said that the successful roll-out of this strategy had enabled it to optimise the mine design, allowing access to higher-grade ore zones "far quicker" than anticipated.

Mining in the latter part of the month was accessing ore which peaked at 40 grams per tonne, with mining in that general zone to continue for two months, and expected to achieve a blended grade average above 10 grams per tonne.

"Mining activity continued uninterrupted throughout June, increasing the volume of ore stored on the stockpile," the board said in its statement.

"The haulage DUX truck repairs conducted last month in combination with regular maintenance has enabled expected utilisation of mining equipment to be achieved."

On the processing front, Scotgold reported the ongoing roll-out of its risk analysis approach, targeting continuous operations.

It said that in June, a bearing failure in the process plant ball mill hampered efforts to make significant inroads towards achieving full ramp-up.

The issue was expected to be resolved in the coming days, but the board said it demonstrated the types of "one-off issues" that could impact production, which were being targeted by its risk analysis approach being implemented at Cononish.

"This methodical approach, which involves analysing, predicting or mitigating the effects of one-off issues on production, would certainly have limited unplanned downtime arising from the bearing failure to an almost negligible level - in this case by ensuring the purchase of critical spare parts," the board explained in its statement.

"The directors are confident that once fully implemented, the risk analysis approach will greatly increase the reliability of the mine and process plant operations and enable more consistent runtime."

The extra ore stockpiled as a result of mining activity continuing uninterrupted during the month was expected to be processed by the plant "in due course".

Scotgold said it was aiming for its second shipment of gold concentrate within the first half of July.

"Gold doré sent to the refiners in May was able to be refined through normal treatment processes, providing validation of Scotgold's process plant production."

At 1327 BST, shares in Scotgold Resources were up 1.68% at 54.4p.