Scotgold crisis

Director quits gold miner as administration looms

Dark clouds looming over the Cononish mine

Scotland’s struggling gold mine has been hit by the resignation from the board of its biggest shareholder and financial backer as it now appears likely to appoint administrators.

Nathaniel le Roux has notified the board of his resignation as a director of Scotgold Resources and its subsidiary companies with immediate effect.

Mr le Roux is the major secured creditor of SGZ Cononish, a subsidiary to Scotgold Resources. 

The board is now considering all options available to the AIM-quoted group and its subsidiary companies after admitting yesterday that it was close to administration after a second potential backer withdrew from talks.

In a statement to the stock exchange this morning, Mr le Roux said:  “After almost ten years on the board, I have made this decision with considerable regret.

“As Scotgold’s operating subsidiary heads towards administration, there is an unavoidable conflict between the interests of the company and my personal interest as the major secured creditor, and I believe it is in the interests of shareholders generally that I now stand down.

“I remain the company’s largest shareholder, and the board has my full support at this very difficult time.”

Scotgold Resources, which operates from the Cononish mine near Loch Lomond, said on 16 October, that it was in advanced financing discussions with a strategic investor.

It announced yesterday that these talks had ended without agreement.

In a statement the company said: “The directors, having assessed the options open to them, are now considering the appointment of administrators over the coming days.”

The company has been engaged in talks with potential investors since the summer. It announced on 2 October that the most advanced prospective investor had decided not to proceed with investment in the company and had withdrawn from the discussions.

At the end of September it placed most of its employers on short-term unpaid leave after cash flow forecasts indicated that to deliver its plan, a significant capital investment is required.

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