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Scotgold Resources boosts Cononish value to £63.3M; production start delayed

Scotgold Resources Ltd. revised the life of mine key financial metrics for its Cononish gold-silver project in the U.K., outlining an increase in pretax net present value, discounted at 10%, to £63.3 million, from £43.3 million in a previous bankable feasibility study.

The higher value comes as a result of a significant improvement in gold prices to £1,200 per ounce from £920/oz earlier. Consequently, EBITDA also jumped to £146.7 million from £101.1 million, the company said Aug. 28.

Meanwhile, capital costs rose to £26.8 million from £20.1 million, and total average costs increased to £544.24/oz from £481.65/oz.

The company expects first gold production at the end of February 2020, as compared to December 2019 originally, due to a delay in process plant building. However, mine development is still on schedule with access to ore expected by the end of this year.

The detailed Cononish design, capital and operational cost revisions indicate an additional funding requirement of £2.5 million, due to which the company has secured an additional £1.5 million facility from Bridge Barn Ltd., taking the total facility to £7.5 million.

Bridge Barn has also agreed to extend the term of the loan to 36 months from 24 months.

In July, the company decided to abandon the Pomar antimony-gold exploration license in Portugal to focus on Cononish.