• Text size      
  • Send this article to a friend
  • Print this article

Investor backs Scotgold's plan for Cononish

NAT le Roux, the Scot who made millions of pounds from spread betting company IG Group, has taken a punt on Scotgold Resources, the miner targeting the Cononish prospect in Argyll.

On TRACK: Scotgold, led by Chris Sangster, plans to bring Cononish into production in 18 months. Picture: Mark Mainz
On TRACK: Scotgold, led by Chris Sangster, plans to bring Cononish into production in 18 months. Picture: Mark Mainz

Mr le Roux has a 7.8% stake after investing £149,000 in a share sale which is the initial stage of fundraising of up to A$2.1 million (£1.1m) by the company.

Another 4.2% stake has been bought by Richard Harris, who is involved in the Australian mining industry.

They are also participating in a new company, part-owned by Scotgold and the local community, which will sell some of the future gold and silver produced at Cononish in the form of dore bars.

A fall in the gold price has hampered attempts by Scotgold, which is listed on the Alternative Investment Market in the UK and in Australia and is led by Chris Sangster, to raise finance to bring its mine into production.

Mr le Roux said: "I fully support Scotgold management's plan to bring the Cononish mine into production within the next 18 months.

"As a Scot, I am pleased to be involved in this material step to the development of a significant Scottish gold mining industry."

After a four-year stint as chief executive of IG, Mr le Roux stepped down in May 2006.

Two months later he sold 10.1 million shares, about two-thirds of his shareholding, for an estimated £20.1m. He had made £8m when the company floated on the stock market in 2004.

Mr le Roux was deputy chairman of IG Group until October 2012. He is a director of the London Metal Exchange and director of the Constitution Society think tank. He also owns a Neolithic stone circle in the Cotswolds.

He started his career at miner Anglo American. He became a metals trader, then a futures trader and a stockbroker. He joined IG as financial dealing director in 1992.

Scotgold chairman John Bentley said: "This transaction enables Scotgold to rapidly progress towards the point at which the full development financing can be sought.

"The board is delighted that investors of the calibre of Nat le Roux see the potential in the development of Scotland's first commercial gold mine.

"We are also very pleased that we intend to enter into an arrangement on the marketing of Scottish gold and silver which will particularly benefit the local community who have been amongst our most loyal and patient supporters."

Scotgold has placed 60 million of the 90 million shares it is offering with investors including Mr le Roux who bought 37.3 million shares at around 0.4p each.

The company will also issue A$1m of unlisted convertible notes with a two-year term and a 1% per annum coupon. They are convertible into Scotgold shares at 0.75 Australian cents.

Holders of the notes receive options exercisable at 0.12 cents per share.

Scotgold said the proceeds will pay down a portion of its £1.5m loan to RMB Resources.

A further placement of up to 50 million shares at 0.75 cents per share is also planned. These too will have options attached.

Scotgold will own 40% of the marketing firm 20% held by public interest bodies including Strathfillan Community Development Trust. The balance will be owned by the new investors.

Contextual targeting label: 
Finance

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

215520