Scotgold raises £1.5m to ramp-up production at Cononish

Scotgold said on Wednesday that it would use the proceeds of the placing to ramp-up production at its Cononish gold and silver mine.

The AIM-listed group noted that although progress had been made resolving various production issues encountered at the asset, the lag between the timing of the re-estimated production build-up and sales receipts meant that further working capital was required before the project becomes cashflow positive, with the funding raised today intended to fulfil this requirement.

Scotgold also stated that the Covid-19 pandemic continued to have an impact on the Cononish mine's overall development schedule, with the company stating it had even investigated the possibility of utilising the Coronavirus Business Interruption Loan Scheme, only to find it was ineligible under current rules.

However, despite the continued delay to ramp-up, Scotgold still expects production for 2021 to be within the guidance range of between 25,700 and 28,500 tonnes of ore processed, and between 7,000 and 7,900 ounces of gold produced.

As of 1010 GMT, Scotgold shares were down 22.22% at 70.0p.