SCOTGOLD, Scotland’s first industrial gold producer, might generate important free money stream of round £13 million a 12 months for the present mine lifetime of greater than eight years, home dealer Shore Capital has stated.
It comes after Scotgold (SGZ) earlier famous its “strongest quarter but” amid report gold manufacturing which exceeded steering, and gross sales of £5m.
Sheldon Modeland, of Shore Capital, stated that Cononish mine in Loch Lomond and The Trossachs Nationwide Park is “an instance of how gold mining might be executed sustainably, manufacturing is from gravity separation and flotation with out the usage of cyanide and all tailings are dry stacked”.
He stated: “What Cononish lacks in measurement, it makes up for in grade; present common feed grade is 19g/t Au. With its optimisation plans efficiently executed, we imagine SGZ might generate important free money stream (c.£13m/yr) for the present mine lifetime of 8.5 years.
“On prime of this, we see the potential for an prolonged lifetime of mine with extra drilling and useful resource definition in addition to 2,900km2 of prospecting choices close to the Cononish mine.”
READ MORE: Scottish gold mine strikes report gross sales of £5m
In its second quarter manufacturing, gross sales, and operations replace to the Metropolis earlier this month it stated that gold manufacturing totalled 3,531 ounces, a 188 per cent improve to the earlier quarter, and above the steering which was between 2,600 to three,200 ounces.
Mr Modeland stated: “Our post-tax FY23F valuation for Cononish is £84m or 139p per share assuming administration efficiently achieves its Part 2 growth of c.24koz of gold every year in Q123.
“This will increase to £104m or 172p per share ought to administration efficiently delineate extra sources at Cononish.
“After adjusting for FY22F web debt of £10.5m, our NAV is £93m or 155p per share, representing an 109% improve to the present share worth.
“On prime of this, we see additional upside, albeit unquantified at this stage, by means of extra exploration of SGZ’s substantial choice agreements that covers an space of two,900km2 exterior the present mine licence.”
The agency stated earlier its new pre-constructed tailings thickener is now on website the place it’s deliberate for set up through the third quarter and as soon as operational is anticipated a gold ounces run-rate of 16,500 to 17,500 ounces of gold on an annualised foundation.
Shore stated: “Funding for the optimisation plan and Part 2 growth is thru the £3m Fern Wealth debt facility.”
Shares in Scotgold closed marginally down, 0.68 per cent, at 73.5p.