The funds will be used for working capital through the current production ramp up period at the precious metals mine, which lies in the Loch Lomond and the Trossachs National Park.
The firm told investors: “Although progress has been made resolving the various production issues encountered, the lag between the timing of the re-estimated production build up and sales receipts means that further working capital is required before the project becomes cashflow positive.”
Bridge Barn, a company owned and controlled by Nat le Roux, Scotgold’s chairman, will provide additional debt funding of £500,000, if further funds are required.
The company confirmed that mining veteran Phillip Day would be joining the board of Scotgold as chief executive from the start of April. His appointment, replacing Richard Gray, was revealed in February.
Releasing a Cononish update, the firm noted: “Covid-19 continues to have an impact on the Cononish mine’s overall development schedule, as reported on February 26. The company has investigated the possibility of utilising the Coronavirus Business Interruption Loan Scheme, however it is deemed ineligible under the current rules.
“Despite the continued delay to ramp up, the company still expects production for calendar year 2021 to be within the guidance range previously provided of between 28,500 tonnes and 25,700t of ore processed, and between 7,900 ounces and 7,000oz of gold produced.”
It added: “The company has deferred the target date for the completion of the planned phase two expansion until September 2022, compared to the previous target date of May 2022. This in part reflects the delays experienced to date achieving the planned ramp up for phase one, but also provides time for the completion of an optimisation study on the performance of phase one, prior to finalising the design of phase two.”
In February, Scotgold announced that Gray would be stepping down after six years at the helm of the company which reported that it was looking at funding options after a delay to ramping-up of production at Cononish.