Scotgold Resources Ltd, which this morning suspended trading, could within weeks fall into administration if it fails to agree payment plans with all its debtors.
FINANCING
The Australian company today repeated its warning from March 2023 that its future was uncertain without further funding, although it is “actively seeking additional financing and discussions are in an advanced stage”.
Operations continue at Cononish with revenue from sales during July and August 2023 of gold concentrate shipments totalling 235 tonnes with a value of £1.9 million.
Scottish gold doré sales made to Scottish jewellery companies during the same period amounted to £46,160.
The company’s average Q1 share price of 75 pence is today 12.9 pence.
DEBTORS
Scotgold has managed to agree payment plans agreed with debtors who have not been paid interest.
“One unsecured creditor has (recently) demanded full payment of outstanding interest, and although the company has sufficient funds to make this payment, it does not believe that to do so would be in the best interest of all stakeholders,” added the company.
“As such an event of default is possible if such creditor does not agree to a new payment plan.
“In the event of default there is a material risk the business could be placed into administration in the next few weeks.”
In July the company began a review of Cononish which showed the company also still needed a “significant” amount of money to implement a mine plan.
The assessment covered the mine design, schedule and production forecasts following “disappointing” gold production and underground mine development.
The mine plan until July 2025, which is under internal review, includes long hole open stope mining, increase in ore production to profitability, “significant” underground development, a drill programme and upgrades to power and ventilation.
PRODUCTION
H1 2023 total gold production totalled 2,314 ounces with long hole stoping production continuing to perform “well” and in line with management’s expectations.
In July 2023, the company produced 1,033 ounces of gold.
In August, drilling and blasting of stope block 3, planned to be 37m, began and is currently 60% through with the first five days of assays in line with expectations.
A total of 692 ounces of gold fed through the plant with figures undergoing reconciliation.
The company this month continues to produce from stope block 3 and develop the incline towards the 460 level.