Placing of shares
Scotgold raises £1.5m to ramp up gold mine
Mine requires working capital
Scotgold Resources, which is developing a gold mine near Loch Lomond, has raised £1.5 million before expenses through a placing of 2.1 million new shares at 70p per share.
The proceeds will be used for working capital through the current production ramp up period at the Cononish Gold & Silver Mine.
Although progress has been made resolving the various production issues encountered, the lag between the timing of the re estimated production build up and sales receipts means that further working capital is required before the project becomes cashflow positive, said the company.
Bridge Barn, a company owned and controlled by Scotgold chairman Nathaniel le Roux, will provide additional debt of £500,000, if further funding is required.
Scotgold still expects production for calendar year 2021 to be within the guidance range previously provided of between 28,500t and 25,700t of ore processed, and between 7,900oz and 7,000oz Au of gold produced.
The company has deferred the target date for the completion of the planned Phase 2 expansion until September 2022, compared to the previous target date of May 2022.