Scotgold seeks £15m as mine planning decision looms

SCOTGOLD Resources has opened talks with several banks about raising more than £15 million to fund its flagship gold mining project near Tyndrum in the Loch Lomond and the Trossachs National Park.

The firm, which is quoted on both the Alternative Investment Market and the Australian Securities Exchange, is exploring the possibility of bank debt and another rights issue to meet the sum, which is needed before the mine can go into production.

Scotgold is confident of gaining planning permission on its second attempt next week when the National Park Authority Board meets to vote on the application for the mine at Cononish.

The scheme is more than a year behind schedule after the board narrowly rejected the first application in August last year.

However, on Thursday, the park’s director of planning, Gordon Watson, reversed his judgment and backed the company’s new bid, which includes several significant changes to alleviate environmental concerns.

But Chris Sangster, chief executive of the firm, said even if next week’s result goes the company’s way it could be more than a year before the first gold emerges from the mine.

John Bentley, the company’s chairman, said it is talking to some UK banks about debt finance but it is more likely to strike a deal with one of the Australian, South African or Canadian institutions which are traditionally strong backers of miners.

“You go to those banks that have some technical knowledge of mining. We are talking to people at UK banks but also overseas – the Australian, South African, Canadian [banks] are the ones we’re talking to.”