THE company which operates Scotland’s only commercial gold mine has eased its financial worries by raising £2 million from investors.
Scotgold Resources, which is developing a gold and silver mine at Cononish in Argyll, raised the cash through a subscription and open offer.
The open offer, which was fully subscribed, generated £1.5m of the investment.
Scotgold said in April when it announced the share issue that the funds brought in would allow it to purchase a more advanced drilling rig and for working capital as development of the Cononish mine continued.
That came after the company warned in March that it may face a “material uncertainty” that would cast a “significant doubt” over its ability to continue as a going concern, after running into production setbacks at the mine.
Just weeks previously it had raised £3m through a share placing, subscription and retail offer to support the delivery of its 2023 mine plan and its planned transition from tunnel development to long-hole stoping, as well as its exploratory drill programme. The company has previously described that long-hole stoping is a “widely used method in underground mining that supports cost effective and efficient extraction of ore”.
Scotgold said yesterday: “Q1 2023 was very challenging for Scotgold. Q2 2023 has started better but the ability for Scotgold to continue as a going concern is entirely dependent on the quantity and grade of ore that is produced from now on.
"The company has good visibility on what is expected for the next three months, and work is under way on the mining schedule and plans for the balance of 2023 and beyond.”
Long-hole stoping began at the mine on April 5, and the company said yesterday it was “progressing well and for the most part, aside from lower-than-expected grade, in line with the company’s 2023 mine plan”.
It reported that 1,956 tonnes of ore had been extracted from long hole stope 1 (19m of the 115m strike length) and processed as of May 3, lower that forecast, at an average grade of four grammes per tonne (g/t)
Between April 5 and April 30, 229 ounces of gold in flotation concentrate were produced with 43 tonnes of gold concentrate shipped to the company’s off-take partner, with a sales value of £0.3m.
Further Scottish gold doré sales were made to Scottish jewellery companies, totalling £183,478, between January 1 and May 4.
Scotgold reiterated that production in the first quarter had been "disappointing", with 4,519 tonnes of ore mined at 5.35 g/t which resulted in 758 ounces of gold being produced
Shares closed up 6.6% at 17.5p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here