Scotgold raises £2.65m in rights issue, details future funding plans
JOHANNESBURG (miningweekly.com) – Aim-listed Scotgold on Monday announced it would raise £2.65-million in a rights issue to start development work at its Cononish gold and silver project, near the Loch Lomond and Trossachs National Park in Scotland.
Chairperson Nat le Roux has fully underwritten a nonrenounceable rights offer of two new shares for every three shares at £0.25 a share together with one free attaching new option, exercisable at £0.40, for every five new shares subscribed for.
The proceeds of the rights issue represent about 30% of the total funds required for Phase 1, which entails a 3 000 t/m operation.
Phase 1 is estimated to require £7.4-million to develop, Scotgold said in March, when it announced plans to pursue a smaller initial operation at Cononish.
The company in August submitted a revised planning approval application for the project, based on a two-phased approach. The Loch Lomond and Trossachs National Park Planning Authority is expected to announce its decision in December.
Assuming its receives approval, Scotgold said that a second and large tranche of funding was planned for early 2018. This would potentially be a combination of equity, debt and vendor (equipment lease) finance.
Phase 2 of the project, which will increase capacity to 6 000 t/m, will be funded through internally generated cash flow.
Scotgold reported that the bulk-processing trial at Cononish, which seeks to demonstrate the marketability and profitability of gold production from the mine, would conclude in mid-December.
The company has been selling gold from the bulk-processing trial operations as branded ‘Scottish Gold’ and gold in concentrate.
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