Scotgold Resources sells French subsidiary

In addition to the initial payment, Scotgold will receive further deferred cash payments of up to €900,000 conditional on the completion of certain milestones by the purchaser.

The sale is conditional upon the parties receiving an acknowledgement from the Minerals Resources Office of the Ministry for Economy and Finance of France that the transfer of shares is acceptable.

Chief executive officer Richard Gray said: "We are delighted to have sold our French Subsidiary on the terms offered. We strongly believe in the potential value of the assets, however, given our current focus on the Cononish project with its exciting developments and the recently announced planning permission, we are pleased to have attracted a purchaser who can progress the French Licences, making the sale mutually beneficial.

"We retain the opportunity to acquire the Penlan licence if it becomes available, and moreover the company will benefit from the commercial exploitation of any of the Licences in the future and we wish the purchaser every success in their endeavours."

In addition to the Vendrennes license, the subsidiary has current applications pending for the additional exploration licences of Penlan and Olivet. If the Penlan Licence is granted, the purchaser must immediately offer it to the company for €1.00 but is under no obligation to accept it.

At 1040 GMT, the shares were up 1.2% to 32.90p.