Scotgold Resources raises £9m for Cononish gold mine

AIM-quoted gold miner Scotgold Resources has raised the final tranche of its development funding following a successful planning permission application for its Cononish gold mine on 27 February.

In total, Scotgold raised £9m through a combination of equity and secured debt.

Scotgold raised roughly £4m before expenses through an oversubscribed placing and subscription of 14.54m new ordinary shares at a price of 27.5p per share and a further £5m by way of a secured loan facility with Nathaniel le Roux, the company's non-executive chairman and substantial shareholder.

Together with existing cash reserves, Scotgold believes it has "sufficient funds" to build its Cononish gold mine, execute a planned exploration programme and meet ongoing working capital needs.

At full capacity, the Cononish mine is expected to produce on average approximately 23,500 equivalent ounces of gold per year.

Richard Gray, Scotgold's chief executive, said, "This is a momentous occasion for the company and for gold production in Scotland. We have seen a number of significant milestones achieved by the company in recent years, culminating now in what will be a new gold mining industry in the Scottish Highlands."

As of 1640 BST, Scotgold shares had rocketed 23.35% to 33.92p.