Troubled Scottish gold miner Scotgold Resources is edging closer to administration as the clock ticks down on efforts to secure a saviour.
Scotgold, which is mining for gold and silver at Cononish, near Tyndrum, Argyll, told the stock market today advanced financing discussions with a strategic investor “have not resulted in an investment at this time”.
It added: “The directors, having assessed the options open to them, are now considering the appointment of administrators over the coming days.”
Running out of lifelines
The company announced last month it was close to collapse as it was running out of lifelines to stay afloat.
It also revealed it had put staff on unpaid leave “until further notice”.
Funding talks were ongoing but its “most advanced prospective investor” had walked away, Scotgold said in its statement to the London Stock Exchange on October 2.
Two weeks later the firm revealed it was in “advanced discussions” with a new strategic investor. These talks had the potential to deliver enough cash for the company to continue as a going concern, it added.
Trading of Scotgold’s shares on London’s Alternative Investment Market was suspended in September when it said it needed “significant” funding to continue as a going concern.
Scotgold has insisted accumulated debts “will be addressed if a successful re-finance is achieved”.
But it has also warned legal action initiated by one creditor may have reduced the timescale to “achieve a funding solution and necessitate an administration appointment”. The firm was hoping to resolve this particular debt through negotiation and a repayment proposal.
As of November last year, Scotgold employed 96 people and its 2022 annual report highlighted “ambitious growth plans to continue to increase headcount during 2023”.
It is understood the payroll had fallen to around 85 before the October 2 announcement.
The “first pour” of commercially produced gold was achieved on November 30 2020.
Woes for Scotgold in 2023
Efforts to ramp up production at Cononish this year have hit challenges. Bosses were forced to shore up the firm’s finances after production levels fell “below plan” in the first quarter.
They also called in the police after the email accounts of directors were accessed by “unauthorised persons” and “specious emails” sent in their names to numerous people.
More recently, chief financial officer Sean Duffy moved up to the role of interim chief executive to replace Phil Day, who quit to spend more time with his family in Australia.
What’s next for gold miner with big ambitions?
Scotgold, whose mining activities in Argyll featured in popular BBC TV series Gold Town, has previously said Cononish is only the beginning of its Scottish gold ambitions.
The company holds 13 lease option agreements covering an area of nearly 1,120 square miles of the central Highlands, mostly in rural Perthshire.
Read more: Has the bubble burst for Scotland’s only commercial gold miner?
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