Scotgold Resources places 62.5m shares on AIM, ASX to raise £500,000

Scotgold Resources announced a sharply discounted share placing and delays in the proceeds from gold sales, sending the stock sharply lower.

The miner placed 62.5m ordinary shares at 0.008p each on AIM, the London Stock Exchange's junior market, and the Australian securities exchange, in a bid to raise about £500,000 before expenses.

Thursday´s share placing was carried out to help finance the development its Cononish gold and silver project in Scotland and, as appropriate, revise the Cononish bankable feasibility study.

Those new shares were issued under Scotgold’s 15% capacity as per the Australian securities exchange listing rule.

Perth,Australia-based Scotgold also said the funds would help tidy it over as it undertook a bulk processing trial so as to optimise the premium achieved on sales verified Scottish gold.

In the short-term, the proceeds from gold sales would be delayed as a long-term marketing strategy and an accumulation of gold stocks would be needed, the company added.

Chief executive Richard Gray, said: "Following the successful first gold pour at the Cononish project yesterday, this fund raise, together with anticipated revenue from gold sales, means the company is now well placed to advance Cononish beyond the bulk processing trail."

Shares in Scotgold Resources were down 12.84% to 0.828p at 1241 BST.