Scotgold Resources secures £430,000 Scottish Enterprise grant

Richard Gray, 'chief executive of Scotgold Resources, which has secured six-figure funding to develop a Scottish gold mine. Picture: John Devlin
Richard Gray, 'chief executive of Scotgold Resources, which has secured six-figure funding to develop a Scottish gold mine. Picture: John Devlin
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Scottish Enterprise has offered to provide funding of up to £430,000 to support the planned development of a Scottish gold mine.

Scotgold Resources said the Regional Selective Assistance grant offered by the economic development agency is dependent on the Cononish mine near Tyndrum creating 36 full-time jobs as part of a planned £8.6 million capital expenditure at the site.

The company, led by chief executive Richard Gray, said the offer was £70,000 more than had been pencilled in under its current financial models although the increase is not expected to have a material increase on project returns. Discussions are now taking place to finalise the grant contract and the timetable for receipt of money.

Further grant funding may be available for an expansion project at the site, which would create a further 27 full-time jobs.

The funding news came in a stock market update in which Scotgold also revealed that it has decided to wind up its French susbidiary after failing to complete a sale deal announced in March.

The liquidation process has now begun and apart from costs related to the process of some £12,000, Scotgold said the move will not result in any loss.

Scotgold also said progress continues to be made in the finalisation of the planning application for the Cononish mine from the Loch Lomond and the Trossachs National Park Planning Authority and that a formal decision notice is expected shortly.

Earlier this year the company raised £9m to press ahead with the development. The funding round included £4m through an oversubscribed placing and subscription offer for new shares and a secured loan facility of £5m from chairman Nat le Roux.