Scotgold Resources, Scotland’s only gold mine, has announced that it is at risk of falling into administration after it suspended trading in its shares on the London Stock Exchange.
The owner of Scotgold stated that while the Geological data and documentation suggested ‘no fatal flaws’ in the MRE and GC modelling process, the company would require a “significant capital” investment to continue as a going concern.
The news comes after the corporation reported disappointing first-half results on 10 July and announced that it will conduct a third-party assessment of its operations.
July and August 2023 gold concentrate shipments totalled 235 tonnes with a sales value of £1.9m.
Meanwhile, Scottish gold doré sales made to Scottish jewellery companies during July and August totalled £46,160.
Additionally, the company stated that it has been managing its creditors, including debt providers, some of whom have not been paid interest as it has fallen due, but they have agreed to payment plans and as such, to date, there have been no events of default.
However, one unsecured creditor has demanded full payment of outstanding interest, and although the company has sufficient funds to make this payment, it does not believe that to do so would be “in the best interest of all stakeholders”.
As a result, an event of default is possible if such creditor does not agree to a new payment plan.
In the event of default there is a material risk the business could be placed into administration in the next few weeks.
Scotgold said: “The company is actively seeking additional financing and discussions are in an advanced stage and, should they materialise, are expected to provide sufficient funding for the company to continue as a going concern.
“The outcome of the funding discussions is highly uncertain and if the company cannot conclude a significant fundraise, it will cast material uncertainty for the company to continue as a going concern.”