Member Info for Eck71

Interesting, great spot. They've got much deeper pockets than NLR - maybe this story has a bit further to run, at least for the local economy if not for shareholders.

Rockhead - all the best and take care of those peepers.

Eck

...finally gives up the ghost. I fear Miss Wemyss will now be susceptible to any offer from the first chancer that comes along, however unpalatable. She deserved better, and Champion deserved his gilded halter after all these years of loyal service. What a shame.

The BFS, link posted by Rockhead on Friday with recommended sections is worth a re-read at this point. This on page 9 on the subject of dilution:

"A mining method trade off study concluded that shrinkage stoping was the preferred method for vein widths less than 1.4 m, i.e. from 1.2 m to 1.4 m. For widths of over 2.0 m Long Hole Open Stoping (LHOS) was the preferred method and that in vein widths of between 1.4 m and 2.0 m there was no significant difference in the results of both mining methods. When this is considered in the context of the entire mine design the quantity of ore contained in vein widths of less than 1.4 m is 33%. The narrower widths are not confined to specific areas so it is not simple to design a development layout for a mining method per area of the mine. Consequently the decision was made to use LHOS for the entire mine. This decision was taken after consideration of the work done in estimating dilution from LHOS. It will be possible to establish shrinkage stope panels from the development footprint designed for LHOS if this is required once mining commences."

TL:DR where the vein is narrow, dilution is high, and already modelled/anticipated as such.

Kind of reflects how I feel about today's RNS. Some encouraging elements but still extremely hand to mouth. It seems that with LHS there is a trade-off between a very high rate of ore recovery and inevitable grade dilution:

https://promine.com/blog-en/long-hole-mining-method-modeling/

So maybe a pattern will emerge where the grades never make it to the predicted heights, but the quantity of gold-bearing ore recovered reliably exceeds predictions? And if so what is the effect of that on the financial and operational modelling? And if that is the case, I still don't imagine grades at 50% of those anticipated are going to do the trick, inevitable dilution or not.

If you want to be encouraged, there's enough here to encourage you. And if you want to be alarmed, likewise.

Yayay, you do get these little local difficulties every now and then. This too shall pass, one way or the other. Clearly a concerted campaign going on with JC and TW, for whatever reason - perhaps the same reason that there were huge pile-ons some years ago, who knows.

This latest noisy fellow lacks any credibility but difficult times for SGZ, no doubt, who as ever don't help themselves with their comms though some of the doom-mongering is clearly overblown and/or disinformation. It does seem pretty binary at this point - either some decent grades start to emerge pronto, or some sort of major corporate event looks likely.

Anyway, felicitations to the canal folk, most particularly of course to Miss Wemyss. Please tell her the intensity of my tendresse remains undimmed, and if Scotgold could just start reliably producing at c. 10g/t I might be in a position to present my credentials, as it were.

It got reported.

News International/Enron Jon Chapman? An impeccable cv. Wonder if it was him that took the late-reported £40k? Someone’s feeling bullish anyway.

BTW Iggy this is what’s known as a ‘market’. Some buys - the price goes up. Often you’ll find market participants then take ‘profit’ (admittedly a rare beast in Scotgold-land). The price may then go down. In illiquid stocks like this, that can happen rapidly in either direction. Here to help.

Bismarck, no idea if that's what will happen but it wouldn't surprise me if the board felt that was the least bad option. NLR has take private form.

The resource was drilled to within an inch of its life 10 years ago (and prior to that). The failure of 430 West is a disaster for cashflow and for confidence in the model and of course it's not planned. With deeper pockets you take it on the chin and keep going because that's mining and you believe in the resource more broadly, but there's no cash and I don't see how £500k makes any meaningful difference to the situation. It would cost c. £2.5m for the board/major shareholders to acquire the rest of the company at these prices. They may feel that's now the best/only route to a return. Still requires more cash on top of that though.

After everything, with the gold price riding high and the mine and processing plant developed, it would be a tragedy for everyone involved, not least the employees, if this were to go belly up. Having been out in 2021 after 10 years and then back in again in a minor way at 40p in Feb, I took my loss yesterday morning. One last sting in the tail for long-suffering shareholders.

Certainly is. Now pushing up again to new record highs for the sterling price. Target AISC for 2023 is £610. If that's achieved (won't be, but let's imagine just for a moment) that's over £1,000 profit per oz at current prices and £2m free cash per month if they can get to the target 2,000oz/month gold production rate.

Usual LSE glitches re uncrossing trades, don't worry about it. Spread remains 38-39.

It is coming out of the ground. Needs to come out a bit quicker though. POG in Sterling now nearly £1,000/oz up from when Scotgold floated on AIM. Share price around 10% of float price.

Lots of water flown under the troll bridge since 2010 but every £1 on POG about the AISC (whatever you believe the true level of that to be) is pure profit.

Looks like interest rates may be topping out sooner than expected. Gold in sterling at new all time high. [Checks share price of only UK gold mine]. Hm.

Retail offer 94% subscribed if my sums are right. The placing did well.

yayay please convey my profuse apologies to Miss Wemyss. I of course did not mean to impugn the young lady's unsullied reputation. I trust she will remain free to pump away on the good Revd's organ for some time to come.

Right, if Miss Wemyss is back I'm having a nibble. Can't let a lady down.

A few around at the end of a horrible two days. It's always the way with Scotgold, the long term plan seems solid but they just can't get the short/medium term expectation management right. How on earth can you reiterate the 2023 production guidance on 21 December and then halve it less than a month later? £10m or so less cashflow in 2023 is a big deal at this point and now the cash crunch is upon them when everyone will have thought Cononish was beyond that stage. Which it should have been two years after 'gold pour' (ho ho) and with the gold price flying high.

I reckon they'll get through it and into full phase 2 before the end of the year, but at what damage to shareholder value? And if the SP stays down here or lower and the board do in fact have confidence in the longer term outlook, would you bet against a take private? Strong stomachs required for the bottom feeders...

Sterling gold price at all time high!
Other junior miners marginally up!
SGZ now at 56.5p!

Come on Scotgold!

Not much of a Santa rally here but 2022 has been about doing the hard operational yards. Here's what I thought in November 21:

"I'm pretty confident 2022 will bring good operational news but less sure how that will play out with the SP...To me, 2022 looks like being mostly a productive slog with more excitement in 2023-4."

Well, the operational news has been largely positive peppered with some inevitable frustrations, and the SP has quietly subsided over the course of the 2022, so not far wrong there.

But to my eyes 2023-24 does indeed look exciting. A year or so ago I was worried about recruitment but that looks to be in a much better place now. Confidence in Phase 2 production seems high, though this is Scotgold so no-one should count any chickens. The gold price in sterling is at £1500 and it's very hard to see a major sterling rally in the foreseeable future. Cononish resource expansion news can be expected in the next 12-18 months.

A market cap of £32m seems very cheap to me for a miner that should be throwing off something like £15-£20m a year from next year, with a very likely resource upgrade thrown into the mix at some point. In that context the £13m of net debt looks perfectly manageable, and even if you don't believe the AISC figure (which I don't really) that looks like an undervalued company to me. Not the first time that's been said over the last decade, but that doesn't mean it's not true now.

To those who've only been in for the last year or so and are nursing losses, I would say keep the heid, things look fairly well set up to me for a positive 2023. For the true stalwarts, it's another case of pour a TG and 'this time next year Rodders'!

Happy Christmas all, have a good one
Eck

Clarets: 'just need gold price to play ball'. I think it's quite likely gold will extend drop down to around $1,500. However, thanks to dollar strength and currency markets' response to the UK govt's kamikaze fiscal policy, sterling-denominated gold is still in the high £1,400s. So, still good for Cononish profitability in theory, though dollar price not so good for general goldie market sentiment. Swings and roundabouts, but if you're going to produce gold in a gold bear market, the UK is currently a pretty good place to be doing it.