20th Oct 2014 08:43
LONDON (Alliance News) - ScotGold Resources Ltd Monday said it is expecting its costs to increase during the fourth quarter, as it continues to try and lower the capital expenditure needed to bring its Cononish gold and silver project in Scotland into production.
In order to reduce the capital expenditure and funding needed, ScotGold said it is reviewing a number of options to try and reduce costs, including how to mine and construct the project.
It is also reviewing the processing rates of its proposed processing plant at the project. The company currently holds a license that would allow the processing plant to operate Monday to Saturday between 0700 GMT and 2300 GMT, with no processing allowed on Sundays. ScotGold are considering changing to a 24 hour license that would also run between Monday and Saturday in an effort to decrease the plant's hourly throughput rate whilst maintaining production rates and reducing capital, said ScotGold.
ScotGold said it has recently conducted a site visit with the Planning Authority regarding the license and plans to submit its application to extend the operating hours shortly. It is also conducting talks with potential plant suppliers about constructing a smaller plant to further reduce costs and is holding negotiations relating to the finance needed for new mining equipment.
"The company's strategy has been to advance the Cononish project to production whilst conducting early stage regional exploration over the wider Grampian Gold project area," said ScotGold in a statement.
The Grampian gold project, also in Scotland, is to undergo an airborne geophysical survey in order to assess the nature of the structures in the area to determine its potential to host similar 'Cononish style' deposits, it said.
In a separate statement, ScotGold released a cash flow statement for the third quarter ended September 30. During the quarter it spent AUD141,477 on exploration activities and AUD262,130 in administration costs, reporting a cash balance of AUD670,220 at September 30.
It is expecting costs to increase during the fourth quarter, with a reduction in exploration expenditure of AUD75,000 being offset by development costs expected to reach AUD200,000 and administration costs increasing to AUD325,000, an increase of AUD200,000 between the third and fourth quarters.
ScotGold shares were down 5.9% to 0.400 pence per share Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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