Scotgold to raise more cash amid fresh woes at Cononish gold mine in Trossachs park

The firm, which raised £1.5 million last month in its latest cash call, told investors that a recent review had concluded that the ramp up of underground mining production would be slower than originally planned.

Mine development is insufficient for the facility to provide “optimal ore quantity and quality in the short term”, bosses noted, although this is not predicted to have a long-term impact.

The mine team has now undergone a “reshuffle in leadership and approach” to ensure it can deliver “reliable and robust” short-term mine plans.

Richard Gray oversaw the development of the Cononish mine, which produced its first gold in 2020, for more than six years. He was recently replaced as CEO by Phillip Day. Picture: John Devlin

As a result, the firm expects production for 2021 to be “materially less” than the guidance range previously announced at the end of March.

Scotgold added: “The recent delays to the production ramp-up have had and are expected to have a negative impact on the company’s cash position.

“To ensure the company has adequate funds available for working capital through this production ramp up period, the company is investigating financing options, including short-term debt financing from the directors. A further update will be made to shareholders in due course.”

At the end of March, Scotgold raised £1.5m as it continued to face production delays, with the funds used for working capital through the production ramp up period at the precious metals mine, which lies in the Loch Lomond and the Trossachs National Park.

The firm said Bridge Barn, a company owned and controlled by Nat le Roux, Scotgold’s chairman, would provide additional debt funding of £500,000, if further funds were required.

It also confirmed at the time that mining veteran Phillip Day would be joining the board as chief executive from the start of April. His appointment, replacing Richard Gray, was revealed in February.

Chris Sangster, Scotgold’s founding CEO, also announced his resignation as a non-executive director to pursue other business interests.

Le Roux said Day’s global experience “will prove invaluable as Scotgold not only executes a phased expansion strategy at Cononish, but also advances our highly prospective Grampian Project with a view to developing further new mines”.

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