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Scotgold plans £2.65 mln fundraising via fully underwritten rights issue

Scotgold is gearing up for the next stage of development at the Cononish gold mine
Dollars and gold bar
Scotgold's major shareholder is underwriting the rights issue

Scotgold Resources Limited (LON:SGZ) is to raise £2.65 mln via a rights issue offering two new shares for every three already held.

The offer price is 25p, although for each five existing shares shareholders also get one new option priced at 40p.

READ: Scotgold narrows losses as it remains ‘hopeful’ of sorting Cononish financing soon

The price before the offer was announced was 27p.

The money raised will be used to commence the next stage of work at Scotgold’s Cononish gold mine in Scotland, where the existing stockpile will shortly be depleted.

The current fundraising represents around 30 per cent of the total that will be needed to complete what’s known as Phase 1 of the development.

READ: Scotgold Resources submits revised Cononish application; eyeing decision by end of year

The outcome of Scotgold’s planning application is expected in mid-December 2017, although the company still has the option to commence development of the Cononish project under its full-scale development programme, for which planning permission has previously been granted.

Under current plans, development work would commence early in 2018.

The offer is fully underwritten by Scotgold’s largest shareholder, Nat Le Roux, who currently holds slightly less than 40%.



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