Scotgold Resources PLC (LON:SGZ) has received a meaty upgrade from analysts at SP Angel ahead of the commissioning of the Cononish mine next month.
Set in the Loch Lomond and Trossachs National Park, Scotgold expects its first pour in November, an event which will mark it as Scotland’s first commercial gold mine.
Given the environmental sensitivity of the area, no cyanide will be used in processing instead the methods will be gravity separation and flotation alongside dry stack tailings storage designed to replicate the glacial landscape of the area.
A phased development strategy will start off at 36,000 tonnes per year (tpa)/10,000 ounces before ramping up to 72,000tpa (20,000 ounces) in 2022.
Scotrgold also owns extensive exploration acreage in the Dalradian Belt in Scotland.
SP Angel analyst Sergey Raevskiy said, “With £12m of Cononish capex spent, we estimate project NPV5% at £113m and arrive at NAV of £103m or 182p per share after adjusting for the estimated net debt position (as of Sep/20) and recent equity raise proceeds.”
“No value has been assigned to an exciting exploration package reflecting its current early stage status.” SP Angel added.
The new price target of 182p compares to the broker’s previous target of 141p and market price of 117p, down 3%, today.
Published at Tue, 20 Oct 2020 12:31:00 +0000-Scotgold gets chunky upgrade as Cononish mine nears production