Scotland’s solely gold mine prone to plunging into administration

The proprietor of Scotland’s solely business gold mine has warned it’s prone to plunging into administration.

Scotgold Resources has suspended buying and selling in its shares on the London Stock Exchange and says it wants “significant” funding to permit the agency to proceed as a going concern.

The announcement comes after the corporate mentioned in July it was enterprise a third-party overview of its operations following “disappointing” manufacturing figures for the primary half of the yr.

Production was affected within the first quarter of 2023 after a key growth was halted because of declining gold grades.

Only 758 ounces of gold have been produced at Cononish, close to Tyndrum, between January and March, though gold focus manufacturing steadily elevated within the second quarter to succeed in 1,556 ounces (2,314 ounces general).

The firm mentioned 1,033 ounces of gold have been produced in July.

The July and August gold focus shipments totalled 235 tonnes with a gross sales worth of £1.9m.

Scottish gold doré gross sales made to Scottish jewelry corporations throughout these two months totalled £46,160.

In June, chief government Phil Day introduced he was stepping down so as to spend extra time along with his household in Australia.

The AIM-listed enterprise mentioned on Monday that whereas the geological knowledge prompt “no fatal flaws” in its survival plan, the corporate would require “a significant capital investment”.

The agency mentioned: “The company is actively seeking additional financing and discussions are in an advanced stage and, should they materialise, are expected to provide sufficient funding for the company to continue as a going concern.

“The final result of the funding discussions is very unsure and if the corporate can’t conclude a major fundraise, it can forged materials uncertainty for the corporate to proceed as a going concern.”

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It mentioned one unsecured creditor had lately demanded full cost of excellent curiosity.

Although the agency had sufficient funds to make the cost, it was not deemed within the “best interest of all stakeholders”.

Scotgold Resources added: “As such an event of default is possible if such creditor does not agree to a new payment plan.

“In the occasion of default there’s a materials danger the enterprise may very well be positioned into administration within the subsequent few weeks.”