Gold miner Scotgold Resources has raised £2.5 million in a share issue to support its Cononish mine near Loch Lomond and its plans to drill in the Grampian area of Scotland.

In two statements after the stock market closed it announced plans for a placing, subscription to raise at least $2m and today confirmed that it has raised $3.05 million (£2.5m) in aggregate at a price of 40 pence per new ordinary share.

Seven directors of Scotgold and a significant number of shareholders are participating in the subscription.

A separate announcement will be made on 16 February on the result of a retail offer to raise £500,000. The company said it wants to include existing shareholders as a way of rewarding those who have stuck by the company since it floated on the stock market in 2010.

The net proceeds will primarily be used to support delivery of the company’s 2023 mine plan and Scotgold’s regional exploratory drill programme, where the company holds 2,900 square kilometres of licences in Scotland. 

Bridge Barn, a company owned and controlled by former chairman Nathaniel le Roux and provider of debt funding to the company, has agreed to defer a total of £2.5m capital repayments due by the company in calendar year 2023 by up to nine months.

Phil Day, CEO of Scotgold, said: “The additional funds raised through the Capital Raising will enable the company to progress its 2023 mine plan and deliver full phase production of c.2,000 ounces of gold per month, with a target AISC of £610 per ounce in Q4 2023.

“In addition to realising full phase production at Cononish, we believe there is significant potential to increase the resource and reserves at Cononish and in turn the life of mine.

“We also have an additional 2,900km2 of licences held in Scotland, running from Tarbet in the South-West to Blair Atholl in the North-East of Scotland along the Dalradian Gold Belt, where we plan to use the same methodology of exploration to develop future mining projects in Scotland.

“Ultimately our vision is to build an intergenerational mining company for the future as a multi-asset gold production company in Scotland.

“Our board and team look forward to the future with confidence and the new funds will provide the financial firepower to help us achieve our goals and deliver the increase in shareholder value we believe is possible.”