27th Mar 2023 12:25
(Alliance News) - Scotgold Resources Ltd on Monday said gold grades at the 430 West ore drive at the Cononish project in Scotland have declined "significantly".
Scotgold shares fell 68% to 12.05 pence each in London at midday on Monday.
Scotgold is a Stirlingshire, Scotland-based gold and silver exploration company, primarily focused on developing the Cononish gold and silver mine in the Scottish highlands.
The firm said that in February and into early March, the 430 West ore drive turned to waste, negatively affecting February production and contradicting the grade control model, which had predicted continuous ore delivery as progression was made on top of CAF2, an area which had previously provided high gold grades.
Scotgold said it expected 5,818 tonnes of mineralised ore to be mined in February and March, ahead of its transition to long hole stoping in the second quarter. The company noted that actual tonnes mined is now expected at between 550 and 6000 in March, with around 3,000 tonnes of waste.
If the beginning of long hole stoping set for April is delayed, or the amount mined from April forwards is less than anticipated in the mine plan, then "a material uncertainty would exist that casts significant doubt over the ability" of the company to continue in a stable manner, the firm said.
Scotgold is currently in discussions with its gold offtake partner to secure an advance of USD500,000 to ensure that the company doesn't experience a shortfall in working capital, while the company is also mulling a short-term convertible loan.
By Harvey Dorset, Alliance News reporter
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