Scotgold may tap directors as cash flow weakens
Firm said technical issues have been resolved
Scotgold, the company behind the gold mine near Loch Lomond, is investigating financing options to shore up a weakening cash position.
The company said it is considering short-term debt financing from its directors.
In an update it said it had resolved technical issues at the Cononish Project “which is operating consistently and currently focusing on ramping up to full design capacity expeditiously.”
However, the ramp up of underground mining production will be slower than originally planned.
“Mine development is insufficient for the mine to provide optimal ore quantity and quality in the short term, however this is not predicted to have long term impacts,” it said.
“The mine team at Scotgold has undergone a reshuffle in leadership and approach to ensure it can deliver reliable and robust short term mine plans. Accordingly, the company expects production for calendar year 2021 to be materially less than the guidance range previously announced on 31 March 2021.”
A further update in connection with the ramp-up of production, including new estimates for ore to be processed and gold to be produced for the calendar year 2021 will be announced as soon as the company has completed the review of the mine plan for Cononish.
“The recent delays to the production ramp-up have had and are expected to have a negative impact on the company’s cash position,” said the company.
To ensure it has adequate funds available for working capital through this production ramp up period, “the company is investigating financing options, including short-term debt financing from the directors. A further update will be made to shareholders in due course.”