Construction cost for Scotgold plant at £9.1m
SCOTGOLD has revealed t hat c o nst r ucti ng t he processing plant at the Cononish gold mine will take a £9.1 million chunk from the £23.2m it expects to incur in pre-production expenditure at the site in Argyll.
Last month the recent fall in the gold price prompted Scotgold to put on hold a planned fundraising to support the expenditure.
In a presentation
to investors, Scotgold, which is listed on the Alternative Investment Market and in Australia, revealed that £3.5m of its pre-production budget would be allocated to mining, £2.9m on the tailings dam where the waste would be disposed while £2.4m is classed as pre-operating expenditure.
There is a contingency budget of £2.9m.
Scotgold gained planning consent for the site in 2012 and has fulfilled 60% of the conditions, it told investors.
It expects to be discharged from these within two months.
Total operating cost for the mine, situated in the Loch Lomond and the Trossachs National Park, is expected to be £125.88 per tonne milled or $698 per ounce of gold or equivalent.
Around one-third of this will be down to the mining costs and a similar proportion is attributed to smelting, refining and royalties.
Once financing is in place, the first production at the mine could start within a year, Scotgold estimates, and full production within 15 months.
It anticipates extracting an average of 18,700 ounces of gold a year over the sixand-a-half year life of the mine as well as an average of 72,300 ounces of silver.
Scotgold revealed at the end of April that it had cut discretionary expenditure and was seeking to cull operating costs as it seeks ways of raising finance.
The plunge in the gold price meant that it had to rethink its financing and left it having to raise more from investors.
Scotgold has received an agreement in principle to provide a gold pre-payment facility from its South African-based banker RMB Resources.
But among the conditions is that it raises all equity required for completion of the project.