Scotgold Resources locked in lifeline funding talks as half-year losses top £5m

Scotgold Resources, the company behind the Cononish gold and silver mine near Tyndrum on the West Highland Way, has revealed half-year losses of A$9.5 million (£5.2m) just days after warning over its future.

The shortfall is much wider than the A$5.3m loss before tax posted a year earlier and comes despite total revenues rising to A$9.5m from A$6.4m during the first half of last year. Earlier this week, the firm warned of a material uncertainty over its ability to continue as a going concern in the “very immediate term”. Releasing its first-half results, Scotgold reiterated that it was in advanced talks with its gold offtake partner to secure a US$500,000 (£408,000) advance to assist with short-term working capital as it transitions to new mining methods. The directors have also discussed, if the need arises, the provision of additional working capital, in the form of equity or a short-term convertible loan.

Chairman Peter Hetherington said: “The period under review, whilst challenging, has seen progress and important milestones being achieved at our Cononish gold mine, in Tyndrum, as we continue to develop Scotland’s first commercial gold mine towards full production, producing both gold concentrate for off-take and Scottish gold doré for the jewellery industry. The ability of the consolidated entity to continue as a going concern over the long term will remain dependent on the quantity and grade of ore mined and processed being within a reasonable tolerance of the forecast quantity and grade and adherence to the planned product shipment schedule.”

The group had net debt of A$25m as of the end of December.

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