By Kristy Dorsey

Scotgold Resources has raised £3 million as the company confirmed that long-awaited production at its precious metals mine near Tyndrum is set to begin within the next few weeks.

The money has been raised via a placing of 2.7 million new shares and will be used to accelerate production at Cononish, which is on course to become Scotland’s first commercial gold mine in more than 500 years. Funds will also be used to increase exploration across 2,900sq km under licence from the Crown Estate Scotland across the Grampian Terrane.

READ MORE: Argyll gold mine production due to start in February 2020, says Scotgold

“We have an exceptionally exciting few weeks ahead of us as we make final preparations for our first gold pour at Cononish by 30 November,” chief executive Richard Gray said.

“As we ramp up production thereafter, the funds raised today will allow us to commit to the expenditures required to build on this anticipated momentum and accelerate the Phase 2 expansion project, whilst at the same time maintaining prudent cash reserves.”

READ MORE: Scotgold secures new prospect agreements with Crown Estate Scotland

Scotgold has spent years working on the Cononish project, which was expected to begin production in May before activity was halted by the coronavirus pandemic.

Average annual gold equivalent under increased production plans at Cononish will rise to 23,500 ounces from 9,910 ounces. The company estimates the mine has enough reserves to sustain nine years of production.

Shares in Scotgold, which surged at the end of September following an update on exploration activity, closed 21 per cent lower yesterday at 119p.