Scotgold upbeat on fundraising as losses soar

Mining firm Scotgold Resources believes it can raise sufficient funds to meet its debt obligations, despite seeing its first-half losses more than double.

The firm, which is aiming to create Scotland’s only commercial gold mine at its Cononish site near Tyndrum, is due to repay more than $1.8 million (£1.2m) in maturing bank debt within the next year.

It will also need funds to continue the development of the Stirlingshire mine, which is expected to generate up to £65m in pre-tax cashflow over its ten-year lifetime.

Options include a share placing or sale of assets and Scotgold, which is headed by chief executive Chris Sangster, said its directors “believe the company will obtain sufficient funding” to allow it to continue as a going concern.

In December, the firm raised almost £800,000 through a share placing and loan extension, having already secured £1.18m in funding from RMB Resources, the mining finance arm of South African bank FirstRand.

The Aim-quoted miner, which is also listed in Australia, posted a 
pre-tax loss of $1.7m for the six months to the end of December, up from $723,203 a year earlier.

“Measured and indicated” resources of gold at the Cononish site stand at 82,600 ounces – 50 per cent higher than previously thought.

Along with the Cononish project, which is expected to create about 50 jobs, Scotgold has other prospects in Argyll and Bute, including the River Vein area and Sron Garbh, where it has encountered evidence of platinum.

GARETH MACKIE