A scoping study into Scotgold Resources' Cononish gold and silver project in the United Kingdom has confirmed the economic potential of the operation, which has estimated capital costs of $27 million.
A report carried out by AMC Consultants (UK) determined a six-and-a-half year mine life from a total inventory of 139,600 ounces of gold and 538,000oz of silver.
Gold and silver production is expected to average 21,000oz and 83,000oz annually respectively.
Scotgold said preproduction project expenditure and capital is estimated at $26.9 million, with a further sustaining and deferred capital cost of $3.3 million over the life of the project including a 15 per cent contingency allowance.
Average operating costs are estimated to be equivalent to $A501 per ounce on average, while the internal rate of return was 74 per cent.
Using the current spot price of $US944/oz, the net present value at 10 per cent is around $56 million, Scotgold said.
Meantime, the company has appointed John Bentley as non-executive chairman, effective immediately.
Mr Bentley has over 37 years of experience in international natural resource corporations.
