Lo­cal pro­ject’s golden streak of prof­itabil­ity

The Oban Times - - Business -

TYN­DRUM

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.

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