Aim-listed Scotgold Resources has a new project schedule for the Cononish gold and silver mine, with first gold from the Scotland-based mine now expected by the end of February.

The new schedule compares with a previous expectation that first gold will be produced in December.

Scotgold said that although mine development was on schedule and access to ore was still expected by the end of 2019, the process plant building and associated civil earthworks were behind schedule, owing to a civil engineering design delay.

CEO Richard Gray commented in a media statement that the overall progress on the development of Cononish, which will produce 23 500 oz/y once in full production, was pleasing. “There is a short delay in production of first gold from our previous expectations, but a stockpile of ore will be accumulated during this period, which will provide an opportunity to exceed targets later in the year.”

The delay, coupled with the acceleration of Phase 2 process plant capital expenditure that was brought forward to Phase 1, saw Scotgold announce that it required an additional £2.5-million.

The funding requirement has been addressed through the extension to the existing bridge barn loan facility by £1.5-million and the subscription of 3 285 783 depositary interests of no par value in the company, at an issue price of 35p a share to raise about £1.15-million. More than £0.95-million of the subscription has come from three company directors and a member of the management team.

Meanwhile, Scotgold also completed a re-estimation of the life-of-mine financial model for the Cononish project, based on a higher gold price of £1 200/oz. This increased the project’s earnings before interest, taxes, depreciation and amortisation from £101-million to £147-million.

“The combination of the gold price being in excess of £1 200/oz, and the pipeline of projects that we anticipate will result from our Grampian exploration work, bode well for the company's long-term outlook,” said Gray.

Scotgold's share price traded down nearly 5% at 34.75p each by midday on Wednesday.