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‘Exciting’ developments at Scotgold

Richard GrayWed close: Scotgold Resources announced plans to begin a bulk processing trial at the Cononish gold mine, near Loch Lomond.

The AIM-traded company said it would process 2,400 tonnes of its stockpile over a six-month trial period. Scotgold said the stockpile was believed to contain 7,000 tonnes, at grades of 7.9 grams per tonne of gold, and 39 grams per tonne of silver.

Chief executive Richard Gray (pictured) said: “This is the most tangible and exciting development undertaken by the company since incorporation.”

Chairman Nat Le Roux added: “Both I and the board as a whole fully support this initiative by the company.”

FTSE 250 engineering firm Weir Group saw annual revenue slide 21% on a reported basis to £1.92bn, from £2.44bn. On a constant currency basis, revenue was down 22%.

Russ Mould, investment director at AJ Bell said: “Falls of 24% in orders, 21% in sales, 47% in pre-tax profit (before exceptional items) and a net loss (after exceptionals) make it hard to draw too much comfort from Weir’s full-year numbers, but further cost cuts, plans to conserve cash and an unchanged dividend have helped the shares to rise by 4% at the open.

“Weir’s shares have already fallen from a peak above £27 to around 935p since autumn 2014, so a lot of bad news is already factored into the price. In addition, the decision to hold the full-year dividend at 44p provides a yield of 4.7%.

Wood Group increased its dividend payment yesterday while Petrofac left its unchanged today. Their shares have rallied this week, in contrast to those of sector peer Amec Foster Wheeler, which has already announced a big planned cut in its dividend for 2015.

“That said, Weir’s unchanged payment does end a string of increases in the annual distribution that runs back to at least 2000 and dividend cover is lower than ideal at 1.8 times, so a prolonged industry downturn could still pressure the yield in time.”

Standard Chartered was among the biggest fallers after the Asia-exposed bank slumped to its first loss is 26 years. Miners were also down.

Shares in Barratt Developments jumped after it hiked its dividend by a quarter and said profits mushroomed in the first half of the year.

Persimmon also continued to rally after reporting healthy full year results as UBS upgraded the stock to ‘buy’ from ‘neutral’ and raised the price target to 2,330p from 2,135p.

The pound fell to a new seven-year low, hitting $1.3926 against the US dollar, as market fears about Brexit continue.

Mihir Kapadia, CEO at Sun Global Investments, said: “The pound continues its downward spiral. However, the recent economic fluctuations we have seen after Boris Johnson’s decision to back the ‘No’ campaign will no doubt subside, and the Pound could see a further fall to around the $1.35 level.

“The ‘No’ campaign has seen its day already, as UK voters will now see through the scaremongering and political tactics, and will probably vote with a common sense approach as to what is best for the UK in the long term.

“The next four months will prove decisive as the UK decides on whether it wants to opt in or out of the EU, and this will no doubt be reflected with expected fluctuations to the currency. The final result maybe close depending on how the debate progresses. At any rate, we are in for some interesting times.

The FTSE 100 was down 1.6% at 5,867.18  on renewed concerns that Opec will not reduce output of oil.

Brent crude dropped 1.03% to $32.93 per barrel and West Texas Intermediate slid 2.8% to $31.00 per barrel.

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