Scottish gold mine operator Scotgold Resources has put most of its workforce on unpaid leave as it attempts to find enough cash to avoid calling in administrators.

The company, which has operations at Cononish in the Trossachs, said discussions to recapitalise the business are at an “advanced stage” but it has appointed an “administration specialist” in the event of no agreement being reached.

On 19 September the company said associated cash flow forecasts indicate that to deliver its plan, a significant capital investment is required.

In an update today, the company said: “Financing discussions are ongoing, they are at an advanced stage with confirmatory diligence being undertaken.

“These have not yet reached final agreement and as such the company is in discussion with an administration specialist as a precautionary measure in the event it cannot secure financing and needs to appoint an administrator.”

The board said it hopes to be in a position to repay a creditor who has recently taken action to recover funds owed.

“Should matters not be successfully resolved this could reduce the timescale to achieve a funding solution and necessitate an administration appointment, which of course it is hoped can be avoided,” said the company.

As of today the company has placed the majority of its employees on short term unpaid leave until further notice, allowing it time to advance the financing discussions and preserve funds to help retain some key trained staff members across mining and plant and maintenance.

This care and maintenance team will maintain the company’s assets and ensure compliance with statutory, regulatory and environmental reporting obligations for the immediate future.