(Alliance News) - Scotgold Resources Ltd on Monday withdrew its full-year guidance as it began a third-party review of the Cononish mine plan for the next 12 months, following a "disappointing" first half of 2023.
Scotgold is focused on the development of its Cononish gold and silver project in the Scottish highlands. The company is based in Tyndrum, Scotland.
Shares in Scotgold were down 8.7% at 15.98 pence on Monday morning in London.
The company produced 1,556 ounces of gold in the three months ended June 30, up from 758 ounces the quarter prior. Of this, 818 ounces were attributed to the month of June.
Gold sales in the second quarter totalled 1,213 ounces, up from 932 ounces in the first quarter. However, gold sales prices dipped to GBP1,609 per ounce in the quarter from GBP1,622 the quarter prior.
Interim Chief Executive Sean Duffy said gold production in the first half of 2023 has been "disappointing".
"The impact of the declining of gold grades in the 430 West Drive, late February was significant and evident in the resultant production figures for the period," he said.
Scotgold said, after reconciling mine development and production over the past six months, it has decided to undertake a third-party review of the Cononish mine plan for the next 12 months.
"The review will initially encompass an assessment of the mine design, schedule and production forecasts. This review will inform 2023 production forecasts and will also incorporate a second stage of power and ventilation upgrades to improve mine accessibility and enable the mine to operate all development and production equipment simultaneously to improve mine development rates," the company explained.
Scotgold said the second stage of power and ventilation upgrade allows a step change in development rates and opens up more mining fronts by enabling equipment to operate in parallel.
"This is necessary to complete the capital development required for ventilation, resource definition drilling and continuation of the incline to open up more mining fronts," it said.
As a result of this review, the company decided to withdraw its 2023 production guidance. It said it would update the market on production forecasts once the third-party review is complete and the findings have been analysed.
By Heather Rydings, Alliance News senior economics reporter
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