Cononish Gold and Silver Mine

Background

Despite being in an area known for historic lead mining, gold was not discovered at Cononish until the 1980’s.

Knowledge on the deposit grew from continued surface exploration and a diamond drilling campaign by successive potential operators, eventually culminating in the excavation of a 900m long exploration adit between 1989 and 1991. In 2002, the Loch Lomond and Trossachs National Park was established by the Scottish Government and the area surrounding the Cononish Mine subsequently incorporated into the precincts of the national park. The project passed through various ownerships, until 2007 when it was acquired by the then newly formed Scotgold Resources Limited

Between 2007 and 2012, Scotgold improved the mineral resource delineation at Cononish whilst also seeking to secure planning permission for the development of a mine, on-site processing plant and tailings management facility. A definitive bankable feasibility study conducted by AMEC 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 bankable feasibility study. Subsequently in 2017 Bara Consulting updated this study to include a change in tailings storage design from valley impoundment to dry-stack, and to evaluate the economic implications of a phased approach to the development of the project.  The Company then adopted this approach which required significantly less capital to bring the project into production at half scale, with a subsequent expansion to full scale to be self-funded.  A new planning application was submitted and on 19th October 2018 Notice of Planning Approval was received from the Loch Lomond and Trossachs National Park. In the interim Scotgold secured the required capital and upon satisfaction of the pre-start planning conditions, work commenced on site on the 18th December 2018.

 

 

Mining Method

The current reserve of gold is confined to a single narrow, near vertical quartz vein extending above and below the main access on 400m level, which was originally developed for exploration purposes between 1989 and 1991. The mining method selected for the orebody is retreat, sublevel open stoping. This involves the mining of multiple horizontal drives along the orebody at 15m vertical intervals.  Long holes will then be drilled, up and down, between the drives and blasted out to form the stopes; loading out from the lowest level of each stope. Pillars will be left between stopes and at surface to ensure ground stability.

 

Isometric view of mine development and stoping.

 

Current activities are focussed on enlarging of the exiting adit over a distance of 900m to accommodate the new larger mining equipment that has been adopted. The adit will then be extended a further 75 metres to the boundary of the currently estimated Ore Reserves, defined by the interpreted position of a geological fault.  Ramps, up and down, will be mined to access reserves delineated some 160m above and 80m below the 400m level, with drill drives (or sub-levels) excavated on vein to the extremities of the Ore Reserve.  These drill drives will be joined vertically by a series of raises, some of which will function as ore passes, while some will be used as airways and travelling ways between the levels. Slot raises will also be mined to demarcate the individual stopes and also serve as initial breaking faces for stoping.

Currently development ore, and ultimately stoping or, will be loaded by a Load Haul Dump machine (LHD or “scooptram”) into a dump truck and brought out of the mine via the 400 level access, where it will be stacked on surface prior to processing.

 

Mining Equipment

The mine employs a variety of equipment, both motorised and stationary. At peak production the mine will operate: 2 single boom drill rigs, 2 LHD’s, 2 low profile dump trucks, in addition to a roof bolter and scaler:

 

Atlas Copco single boom drill rig

 

Epiroc LHD

 

Roof Bolter

Low profile dump truck


Resources

Classification K tonnes Grade AU

g/t

Metal AU

Koz

Grade Ag

g/t

Metal Ag

Koz

Measured – In-situ 60 15.0 29 71.5 139
Indicated – In-situ 474 14.3 217 58.7 895
Indicated – Mined Stockpile 7 7.9 2 39.0 9
Sub-total M & I 541 14.3 248 59.9 1,043
Inferred – In-situ 75 7.4 18 21.9 53
Total MRE 617 13.4 266 55.3 1,096

 

Reported from 3D block model with grades estimated by Ordinary Kriging with 15 m SMU Local Uniform Conditioning adjustment. Minimum vein width is 1.2m. Totals may not appear to add up due to appropriate rounding

Note: MRE prepared by CSA Global (UK) Ltd in accordance with JORC 2012 – see AIM release: 22/01/2015 – Resource Estimate Update

 

cononish-3

Long section through Cononish vein coloured by MRE classification

Ore Reserves

Classification K tonnes Grade AU

g/t

Metal AU

Koz

Grade Ag

g/t

Metal Ag

Koz

Proven 65 11.5 24 51.5 108
Probable 490 11.1 174 47.2 743
Total 555 11.1 198 47.7 851

 

(Bara Consulting Limited – Ore Reserve Statement dated May 2015)

(Estimate based upon JORC 2012 reporting rules, Gold price US$1,100/oz, Silver price US$15/oz and Exchange rate 1.6 US$/£.)