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Scotgold Resources given loan deal extension

SCOTGOLD Resources has received a boost after a £1.5m loan facility was extended until after a crucial fundraising vote.

MINING PLANS: Scotgold Resources, headed by Chris Sangster, is still hoping to open a gold and silver mine at Conononish in Argyll. Picture: Mark Mainz
MINING PLANS: Scotgold Resources, headed by Chris Sangster, is still hoping to open a gold and silver mine at Conononish in Argyll. Picture: Mark Mainz

RMB Australia Holdings, a division of South African ­financial group First Rand, confirmed it received approval to allow the loan to run until August 11.

The financing agreement had been due to run out before ­Scotgold shareholders vote at a general meeting on July 30 to approve further investment from Nat le Roux, the Scot who made his fortune at spread betting firm IG Group, and other backers including Australian mining executive Richard Harris.

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Scotgold is still hoping to move its plans for a gold and silver mine at Conononish in Argyll forward.

Yesterday it said: "RMB and Scotgold have agreed to this ­relatively short extension of the RMB facility to enable the ­company's shareholders to vote at the general meeting."

If the fundraising is approved a portion of the money will be used to repay some of the RMB facility as well as accumulated interest although it will still be owed about £1.18 million. The remainder of the cash will be used to fund Scotgold's operations.

RMB is also trying to get its investment committee to further extend the term of the loan until December next year.

That is dependent on the general meeting giving its backing to the funding deal.

However Scotgold, headed by chief executive Chris Sangster, said: "The further extension is likely to be subject to certain other conditions in favour of RMB that are yet to be agreed."

Fluctuations in the gold price have hampered Scotgold's attempts to raise the finance needed to bring its mine into commercial production.

Shares closed unchanged at 0.45p.

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