Scotgold Resources has raised £3 million from a placing to double production and increase exploration during 2021 at its Cononish Gold and Silver Mine in Loch Lomond and Trossachs National Park.
The company raised the funds before expenses by way of placing 2,727,273 depositary interests of no par value in the company (new ordinary shares) at a price of 110p per new ordinary share.
The money will also be used to increase exploration and Scotgold’s programmes across its 2,900km2 licence portfolio in the Grampian Terrane of Scotland.
The company has reported encouraging recent results from gold and silver anomalies to the north east of the Cononish mine and from the Beinn Udlaidh and Inverchorachan prospects.
Scotgold’s development of Cononish will involve a 100% increase in production to 72,000 tonnes of ore produced per annum.
The average annual gold equivalent production will rise from 9,910 oz to 23,500 oz.
The increase in production is due to start in May 2022 and will be 11 months earlier than previously scheduled and 17 months after the initial gold pour in November 2020.
Scotgold’s chief executive, Richard Gray, said: “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.
“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.
“With this strong cash balance in place, we have a clear path to realising the significant value that we believe Cononish and our additional prospects offer to investors.”
Cononish mine is on course to becoming Scotland’s first commercial gold mine by 30 November 2020.
Construction of the plant is on schedule with the building structure complete and work is continuing on the installation and connections of pumps, drives, piping and electrics before commissioning.