Scottish listed miner Scotgold Resources hailed a second month of profitable production as the amount of gold increased 24% to 62 tonnes in September.
Bosses at the mining operation at Cononish near Tyndrum said they were on track to “realise the full potential” of the mine.
Phil Day, chief executive, said: “The operational turnaround at Cononish continues to gain pace and we are really encouraged by the performance of the mine and the overall improvement in our production profile.
“Importantly, September marked our second month where production revenues exceeded operational costs and we are confident that we are now on the correct growth trajectory to realise the full potential of Cononish.”
The update marks continued improvement after the company warned output in its first year of production from Cononish would be “materially” below previous guidance. The announcement in late April saw Scotgold’s market value plunged nearly 30%.
The firm said this morning that its process plant was “continuing to operate encouragingly”, and that its team was able to achieve a ” more consistent runtime” which allowed for increased production.
It added: “The current barrier to achieving higher throughputs relates to the quartz in the ore, which causes higher wear on certain parts of the process plant.
“The Scotgold team is capitalising on this information to fine tune the intervals for replacing various wear parts and as such, the management expects that the changeouts will become more scheduled using the company’s planned maintenance system which will result in higher throughput per month.
“A focus on critical and necessary spares for maintenance to achieve target availability for mining and process plant will continue to be a priority for the process plant team during Q4 2021.”
The company added efforts “focussed on the de-bottlenecking of the tailings filter” meant it has been “successfully performing during September and will support the continued improvement of Scotgold’s production profile”.
Despite the upbeat update, shares closed 4% down to 82.5p.
The company further said that it would not be providing “detailed operational updates” to the market except on a “frequency in line with industry standard”, as the company has achieved “operational stability”.
Late last month the company also agreed that cash it had borrowed from directors when problems first struck could be converted into equity.
Mr Day called the move, which saw shareholders including Nathaniel Le Roux, Bill Styslinger, Peter Hetherington and Ian Proctor up their stake in the company in exchange for repayment as a “clear signal to the market”.
He said: “The agreement of this short-term loan in May came at a time when the management were addressing a number of operational challenges as part of the ramp up of our Cononish Gold-Silver Mine in Scotland, with the funds used judiciously to continue this process with a view to achieving targeted design processing capacity.
“As communicated in my monthly operational updates, this process has been successful, and we are on track to achieve monthly operating targets.”