Local project’s golden streak of profitability
firm, Scotgold Resources, has said its gold and silver mine is viable even if the price of gold tumbles to 700 dollars an ounce.
The group has published its promised ‘bankable feasibility study’, based on the company’s mineral resource and ore reserve estimates produced during 2015.
At the current gold price of $1100, the peak funding requirement for the Cononish mine would be £18.5million, with total life of mine capital of £24m.
That selling price would translate into net pre-tax cashflow of £43m, an internal rate of return on investment of 45per cent, and a payback period of 19 months.
It assumes average annual production of 72,000 tonnes, at a grade of 11.8 grammes per tonne, and an eight-year life of the mine in the Trossachs National Park.
Richard Gray, chief executive of Scotgold Resources, said: ‘ The study illustrates the robustness of the Cononish Project with the mine profitable down to $700 per ounce, and provides a very solid base for our ongoing discussions with potential project finance providers. Once concluded, we look forward to putting this fully permitted project into development and pursuing its strong upside potential, which includes a possible mineral resource extension and the likely price premium for gold with proven Scottish provenance.’
The study says the mined gold will be sold to third party processors, with a process plant housed in a single, multi-use building with a workshop and office area. This is designed to have minimal visual and noise impact on the surrounding area.