GOLD miners need to be optimists and Scotgold's deposed chief executive Chris Sangster is no exception.
He hoped for £2 million from the Melbourne-listed miner's London flotation but raised £700,000, he envisaged a £12m development cost, which soon jumped to £22m, and he predicted that gold would be extracted from the Trossachs by mid-2011. With gold at $1100 an ounce, he said in 2010, and 163,000 ounces of gold on the site, it was a "very worthwhile" prospect.
Gold then climbed to $1600, and it is currently at over $1200 an ounce, yet, by by November last year, John Bentley, who has quit as chairman, was striking a starkly pessimistic tone, warning that it would be "an uphill battle to get this mine into production". Mr Bentley blamed a 20 per cent fall in the gold price in a few months to $1300 which he said had depressed sentiment. Scotgold has made accumulated losses of £4.4m and even Mr Sangster said recently it would take 18 months to get production started once financing is raised.
Yet Scotgold has stayed afloat, replenishing its equity at critical moments, and has now attracted serious backers on the board. It is even confident enough to press ahead with aerial mapping of further prospects, and to talk about a pipeline of projects and a platform for growth. The project's capital costs have been slashed to £10m, and the rights issue will buy yet more time. The new guard will need to use it to persuade financiers to ignore the clouds currently hanging over stock markets, and to share their optimism.
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