TIDMSGZ
RNS Number : 0336U
Scotgold Resources Ltd
31 March 2021
31 March 2021
Scotgold Resources Limited
("Scotgold" or the "Company)
Placing to Raise GBP1.5 million
Scotgold Resources Limited (AIM:SGZ), the gold exploration and
production company focused on Scotland, is pleased to announce that
it has raised GBP1.5 million before expenses by way of a placing of
2,142,857 depositary interests of no par value in the Company ("New
Ordinary Shares") at a price of 70p per New Ordinary Share (the
"Placing"). The proceeds of the Placing will be used for working
capital through the current production ramp up period at the
Cononish Gold & Silver Mine, ("Cononish"). Although progress
has been made resolving the various production issues encountered,
the lag between the timing of the re estimated production build up
and sales receipts means that further working capital is required
before the project becomes cashflow positive. The funding raised
today is intended to fulfil this requirement and Bridge Barn
Limited, a company owned and controlled by Mr Nathaniel ("Nat") le
Roux, the Chairman of Scotgold, will provide additional debt
funding of GBP500,000, if further funding is required by the
Company.
Additionally, further to the Company's announcement of 26
February 2021, Mr Phillip Day will join the board of Scotgold as
CEO on 01 April 2021.
SP Angel Corporate Finance LLP acted as sole broker to the
Placing.
Cononish Project Development update
COVID-19 continues to have an impact on the Cononish Mine's
overall development schedule, as reported on 26 February 2021. The
Company has investigated the possibility of utilising the
Coronavirus Business Interruption Loan Scheme, however it is deemed
ineligible under the current rules.
The filter press issues discussed in the Production Update of 26
February have continued through most of March, hampering a ramp up
of production, although progress resolving these issues has been
made in recent days. Once fully resolved and with more continuous
steady state plant operations achieved, the Company expects a
further period of "bedding in" and optimisation before all design
parameters are achieved.
Despite the continued delay to ramp up, the Company still
expects production for calendar year 2021 to be within the guidance
range previously provided of between 28,500t and 25,700t of ore
processed, and between 7,900oz and 7,000oz Au of gold produced.
Cononish Life of Mine Plan update
The Company has deferred the target date for the completion of
the planned Phase 2 expansion until September 2022, compared to the
previous target date of May 2022. This in part reflects the delays
experienced to date achieving the planned ramp up for Phase 1, but
also provides time for the completion of an optimisation study on
the performance of Phase 1, prior to finalising the design of Phase
2.
The Company has also re estimated the financial metrics for the
project based on this revised scheduling for Phase 2 and using a
reduced gold price of GBP1,250/ oz, compared to GBP1,400/oz used
previously in the model released on 12 October 2020. Modelled
operating costs have also been adjusted where previous cost
assumptions have been superseded by contract pricing, and where the
costs are driven by the gold price assumption. As a result, the All
In Sustaining Cost (AISC) estimate for the period of steady
production beyond the Phase 2 expansion has reduced from GBP461/oz
to GBP430/oz.
Cononish Project re-estimation of key financial metrics (at
GBP1,250 per ounce)
Project Returns: March 2021 to end of LOM
Gold price GBP/oz 1,250
---------- ----------------
Silver price GBP/oz 18.99
---------- ----------------
EBITDA GBP 161.1 million
---------- ----------------
Pre-tax Cash Flow GBP 126.6 million
---------- ----------------
Net Cash Flow GBP 101.7 million
---------- ----------------
NPV calculation date 01 March 2021
---------- ----------------
Pre-tax NPV @ discount rate
of 8% GBP 82.3 million
---------- ----------------
Operating Margin % 69.9
---------- ----------------
Average all in sustaining cost GBP 430/oz
(AISC)
---------- ----------------
Further details of the cost dynamics and capital costs and
sources of funding are set out in the table below.
Cost Dynamics: Project Lifetime
Capital Cost GBP 34.4 million*
------- ----------------
Operating Cost GBP 70.6 million
------- ----------------
Average Operating Cost/oz Eq
Au. GBP 381
------- ----------------
Average Capital Cost/oz Eq
Au. GBP 186
------- ----------------
Total Average Cost/oz Eq Au. GBP 567
------- ----------------
* Includes asset based finance costs & * Includes all
capital expended since 1 Jan 2019
Investor Presentation
An updated corporate presentation for Scotgold will be available
today at the following address:
https://www.scotgoldresources.com/about-us/company-presentations/
Application for admission
Application will be made for the 2,142,857 New Ordinary Shares
to be admitted to trading on AIM ("Admission") and Admission is
expected to take place on or around 7 April 2021.
Following Admission, the Company's enlarged issued share capital
will comprise of 56,221,871 ordinary shares of no par value with
voting rights. The Company does not hold any shares in treasury,
therefore the total number of shares in the Company with voting
rights will be 56,221,871. This figure may be used by shareholders
in the Company as the denominator for the calculations by which
they will determine if they are required to notify their interest
in, or a change in their interest in, the share capital of the
Company.
Director Shareholdings on Admission
The beneficial interests of the directors of Scotgold in the
ordinary share capital of the Company, currently and upon
Admission, is set out below:
Director Current Current Shareholding Resultant % shareholding
Shareholding % Shareholding on Admission on Admission
Mr Nat le Roux 22,618,223 41.82% 22,618,223 40.23%
-------------- ---------------- -------------- -------------------------
Mr William Styslinger 5,931,400 10.97% 5,931,400 10.55%
-------------- ---------------- -------------- -------------------------
Mr Peter Hetherington 2,088,961 3.86% 2,088,961 3.72%
-------------- ---------------- -------------- -------------------------
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
**ENDS**
For further information please contact:
Scotgold Resources Limited Tel: +44 (0)1838 400 306
Richard Gray
SP Angel Corporate Finance Tel +44 (0) 20 3470 0470
LLP
Nomad and Broker
Ewan Leggat / Charlie Bouverat
Tel +44 (0) 20 7236 1177
St Brides Partners
Financial PR
Susie Geliher / Frank Buhagiar
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END
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