Name of the Mine
Cononish mine.

Location
The mine is located about 4 km from the Tyndrum village and on the Cononish farm, in the mid-western highlands of Scotland, in the UK.

Mine Owner/s
Scotgold Resources.

Brief Description
Cononish is Scotland’s first commercial gold mine.

Brief History
According to Scotgold, despite being in an area known for historical lead mining, gold was not discovered at Cononish until the 1980s. The Cononish gold and silver deposit was delineated by diamond drilling conducted from 1985 to 1988, and an underground development programme was started in 1990.

The Loch Lomond and Trossachs National Park was established by the Scottish government in 2002, and the area surrounding the Cononish mine was subsequently incorporated into the precincts of the national park.

The project had various owners until 2007, when it was acquired by the then newly formed Scotgold Resources.

A definitive bankable feasibility study (BFS) conducted by consulting firm AMEC Foster Wheeler Earth & Environmemtal in 2011 concluded that a profitable and safe gold mining operation could be established at Cononish.

Following a revised mineral resource estimate by CSA Global in 2015, Bara Consulting completed a new ore reserve estimate and BFS.

A planning application was submitted and, shortly thereafter, Notice of Planning Approval was received from the Loch Lomond and Trossachs National Park, on October 19, 2018. Scotgold had secured the required capital and, upon satisfaction of the prestart planning conditions, started on-site work on December 18, 2018.

Cononish achieved first gold in November 2020.

Scotgold reported the first signs of trouble in March 2023, stating that gold grades in the 430 West ore drive had declined significantly, contradicting its grade-control model. The mine subsequently escalated its transition to longhole stoping, a few months ahead of the original long-term mine plan.

By September 29, 2023, Scotgold placed the majority of its employees on short-term unpaid leave, consequently enabling the company to preserve funds to help retain some key trained staff members across mining, plant and maintenance operations.

The care and maintenance team will maintain Scotgold’s assets and ensure compliance with statutory, regulatory and environmental reporting obligations for the immediate future.

Primary Metals/Minerals
Gold.

Secondary Metals/Minerals
Silver.

Geology and Mineralisation
The Geological Society of Glasgow describes the mineralisation as being hosted by a steeply dipping breccia zone, the Eas Anie vein, silicified and haematised by the hydrothermal solutions, which carried the minerals and penetrated the rocks of psammite, pelite, amphibolite and impure limestone of the Grampian and Appin groups.

These same Dalradian rocks reportedly extend from Canada through Ireland and Scotland to Scandinavia, where gold is also found.

The organisation notes that the vein extends for more than 1 km along strike and 500 m down dip. It is up to 8.3 m wide, has an average width of about 2 m and fills a structure considered to have formed during left-lateral movement of the early Tyndrum Fault, during the Caledonian orogeny.

The gold occurs as flecks in the quartz, around the margins of the pyrite, in cracks within the pyrite and within the crystal structure of the pyrite.

Reserves
As at May 25, 2015, the Cononish mine had a total ore reserve of 555 000 t grading 11.1 g/t of gold and 47.7 g/t of silver, containing about 198 000 oz of gold and about 851 000 oz of silver.

Resources
As at May 25, 2015, the Cononish mine had a total mineral resource estimate of 617 000 t grading 13.4 g/t of gold and 55.3 g/t of silver, containing about 266 000 oz of gold and about one-million ounces of silver.

Type of Mine
Underground.

Mining Method
The mining method selected for the orebody was retreat, sublevel open stoping, which involves the mining of multiple horizontal drives along the orebody at 15 m vertical intervals. Longholes are then drilled, up and down, between the drives and blasted to form the stopes; loading out from the lowest level of each stope.

Pillars would be left between stopes and at surface to ensure ground stability.

Development ore, and ultimately stoping ore, was loaded by a load haul dump (LHD) machine into a dump truck and brought out of the mine using the 400 Level access, where it was stacked on surface prior to processing.

Major Infrastructure/Equipment
The mine has primary and secondary jaw crushers; a wet ball mill operating in closed circuit with a hydrocyclone; a gravity concentration circuit consisting of a Knelson centrifugal separator and a conventional shaking table, tailings management facilities, two single-boom drill rigs, two LHDs, two low-profile dump trucks, and a roof bolter and scaler.

Prospects
The 2023 mine plan primarily focused on transitioning from cut-and-fill stoping to longhole stoping.

According to the 2023 mine plan, the 430 West ore drive was expected to deliver ore continuously as it progressed towards and on top of CAF2, as this CAF area had previously provided high gold grades ranging between 10 g/t and 12g/t in 2022.

However, a company update on March 27, 2023, noted that as the 430 West ore drive progressed, gold grades began to decline significantly.

On the back of this update, Scotgold Resources’ stock collapsed by 65%, as the company warned that, if there were any further setbacks related to longhole stoping development or production and grade control, this would result in “significant doubt over its ability to continue as a going concern in the very immediate term”.

On April 5, Scotgold reported that it had secured a $500 000 advance from its gold offtake partner to assist with short-term working capital, and that it had started longhole stope mining on April 4.

Although gold concentrate production steadily increased in the second quarter, the company withdrew its 2023 production guidance – initially targeting between 11 500 oz and 13 500 oz for the year – in July and noted that it would undertake a third-party review of the mine plan.

The company noted on September 11 that, while the geological data and documentation suggested ‘no fatal flaws’ in the mineral resource estimate and grade-control modelling process, the draft mine plan and associated cash flow forecasts were being revised, and available data indicated that “significant capital investment” was required.  It further announced that trading in its shares was suspended.

The mine was placed on care and maintenance on September 28.

On September 29, Scotgold announced that a creditor had taken legal action, adding, “should matters not be successfully resolved, this could reduce the timescale to achieve a funding solution and necessitate an administration appointment, which, of course, it is hoped can be avoided”.

The board confirmed on November 7, 2023, that it was considering the appointment of administrators, following failure to close an investment agreement with a potential strategic investor.

Contact Details
Scotgold Resources
Tel +44 1 838 400 306  or +44 1 838 400 374
Email sgz@scotgoldresources.com or scotgold@celicourt.uk

Sources
Geological Society of Glasgow. Website https://geologyglasgow.org.uk
Geological Society of Glasgow. Proceedings of the Geological Society of Glasgow Session 149 (2006 to 2007).
Geological Society of Glasgow. Day Trip to Cononish Gold Mine (August 24, 2013).

Mining Weekly. https://www.miningweekly.com
Mining Weekly. Scotgold considers going into administration (November 11, 2023).

Research Channel. Website  https://www.researchchannel.co.za
Research Channel. Scotgold stock plunges 60% on going concern uncertainty (March 27, 2023).

Scotgold Resources. Website https://www.scotgoldresources.com
Scotgold Resources. Cononish project.
Scotgold Resources. Q4 2022 Production, Sales, and Operations Update – Cononish Gold and Silver Mine, Scotland 2023 Strategy/Outlook (January 19, 2023).
Scotgold Resources. Operational and Corporate Update (March 27, 2023).
Scotgold Resources. Interim Results for the six months ended December 31, 2022 (March 30, 2023).
Scotgold Resources. Production, Sales, and Operations Update – Q2 2023 and H1 2023 (July 10, 2023).
Scotgold Resources. Geological review, mine plan and operations/production update. Suspension of trading on AIM (September 11, 2023)
Scotgold Resources. Corporate Update (September 29, 2023).