Scotgold takes 'hard decision' to terminate Pomar licence

Scotgold has decided not to extend the Pomar Exploration Licence in Portugal, it announced on Thursday, and has applied to the Director General of Energy and Geology (DGEG) to terminate the licence.

The AIM-traded firm had announced on 26 February that its earn-in agreement on Pomar was terminated.

It said it continued to believe in the potential of the Pomar licence, adding that it had enjoyed a constructive working relationship with the DGEG.

However, the exploration results to date - including the most recent soil sampling - suggested a “significant” further work programme would be required to realise that potential.

As the company's short-term focus was on the successful development of the Cononish Gold and Silver Mine and advancement of the encouraging exploration results in the vicinity of the Cononish Project, the company said it had taken the decision to terminate the licence and minimise further expenditure.

“Our belief in the potential of this licence and our positive experiences in Portugal made this a hard decision,” said Scotgold chief executive officer Richard Gray.

“Our critical focus at this time however has to be the development of the Cononish Project and securing positive cash flow in 2020.

“This will enable us to accelerate our exploration activities in Scotland and ultimately reconsider other opportunities in similar low political risk jurisdictions.”