Scotgold raises GBP3mln to allow for production expansion at Cononish gold mine

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Scotgold Resources Ltd (LON:SGZ) has raised GBP3mln by way of a placing of shares at 110p each.

The proceeds of the placing will be used to accelerate plans to double production at the Cononish gold and silver mine in Scotland.

Cononish remains on course to become Scotland’s first commercial gold mine by November 30, 2020, the group said.

Funds will also be used to increase exploration activities, rolling out Scotgold’s systematic programmes across its 2,900 square kilometre licence portfolio in the Grampian Terrane of Scotland.

Average annual gold equivalent production under the increased production plans will rise to 23,500 ounces from 9,910 ounces.

“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,” Scotgold chief executive Richard Gray said in a statement.

“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,” he added.

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