Scotgold Resources Limited (LON: SGZ) have given shareholders a cautious update on Monday, following production delay announcements.
The gold mining sector has been busy over the last few weeks as the countdown to Christmas continues, and firm have given mixed updates.
Cora Gold Ltd have seen their shares jump last week as the firm reported progress on its Mali operations.
Cora is currently carrying out a 5,000 metre drilling programme at Sanankoro, looking for new sulphide and deep oxide targets as well as to expanding existing targets.
Eurasia Mining saw their shares rally following progress in their Russian operations. Eurasia reported that it is edging closer to securing the final approval for the Tipil permit, a platinum group metals target located in Russia.
Notably, last week FTSE100 listed Fresnillo saw their shares crash after the firm gave a pessimistic annual production estimate.
Scotgold was founded as an Australian company in 2007 and the Company’s shares were admitted to trading on the AIM market in 2010.
The Company is primarily focused on the development of its high grade Cononish Gold and Silver Project in the Scottish highlands, together with the exploration of highly prospective tenements in the Grampian region of Scotland (the Grampian Gold Project).
Shares of Scotgold currently trade at 66p. 16/12/19 15:01BST.
Today, the firm said that hat development of Cononish Gold and Silver Mine in Scotland’s Grampian Highlands has been extended by 12 weeks and first gold production is now expected in May 2020.
The delay will certainly worry shareholders, as the firm will have to push back its operational and supply time lines as it accounts for these delays.
In August, Scotgold had said that gold production from Cononish project was expected in February 2020, following design delays.
The firm said that it had encountered delays relating to the management of excavated materials necessary to construct process plant building and to establish the site wide drainage required for the establishment of the “dry stack” tailings storage facility.
“The area of these sites is overlain by peat to varying depths, for which the company is utilizing all good practice to manage and preserve this environmentally sensitive material by minimizing storage,” Scotgold said.
The company said it has also identified a “small number of design detail changes which have had a minor impact on the planned schedule”.
“Whilst actions have been taken to minimise schedule impact, it has now become clear that an extension to the schedule will be required,” the company said.
Richard Gray, chief executive officer, said: “We are obviously disappointed that our eagerly awaited first gold production has been delayed, however proper management of our local environment is our first priority and our team has found solutions to the challenges encountered.”
“This has only been possible with the constructive approach taken by our contractors and the regulatory authorities,” Gray said.