Scotgold Resources Ltd has placed employees on “short term unpaid leave” and is talks with an “administration specialist” while it faces action from a creditor.
FINANCING
The Australian company continues “financing discussions” to develop its Cononish gold and silver mine and reached an advanced stage with “confirmatory diligence being undertaken”.
“These have not yet reached final agreement and as such the company is in discussion with an administration specialist as a precautionary measure in the event it cannot secure financing and needs to appoint an administrator,” added Scotgold in a statement.
The company said it would address “accumulated arrears” if a successful refinance is achieved.
“Nonetheless, a creditor has recently taken action which the board hope to resolve through negotiation of a repayment proposal.
“Should matters not be successfully resolved this could reduce the timescale to achieve a funding solution and necessitate an administration appointment, which of course it is hoped can be avoided.”
EMPLOYEES
The company will retain some key care and maintenance staff across mining, plant and maintenance to maintain Cononish and ensure compliance with statutory, regulatory and environmental reporting for the immediate future.
In September, a review by Mining Plus said that the draft mine plan and associated cash flow forecasts indicated “significant capital investment” was required.