Mining firm Scotgold locked in funding talks with new potential investor

Scotgold Resources is behind the Cononish gold and silver mine near Tyndrum, which lies in the Loch Lomond and the Trossachs National Park.

Scotgold Resources, the firm behind the Cononish gold and silver mine near Tyndrum on the West Highland Way, is locked in fresh funding talks just days after it warned that it may have to appoint administrators.

In a brief statement to investors, the firm, whose shares are currently suspended, said it was in advanced discussions with a new strategic investor which, should final agreement be reached, are expected to provide sufficient funding for the business to continue as a going concern. It added: “Whilst financing discussions are at an advanced stage, in the event the company cannot secure financing with the new strategic investor, this could result in the appointment of administrators. Further announcements will be made in due course.”

It marks the latest twist in the company’s journey as it looks to take its new mining plans forward and make a commercial success of the gold and silver mine, which lies in the Loch Lomond and the Trossachs National Park. At the start of October, Scotgold said talks with an “advanced prospective investor” had failed and it was in discussions with its existing funders which could result in the appointment of administrators “over the coming days”.

The firm has had a challenging time at Cononish over the years but remains confident that its transition to a new mining technique, called long hole stoping (LHS), will bear results. Last month, it said the board had decided that trading in the company’s shares on London’s junior Alternative Investment Market (Aim) would be suspended. It added that a mine plan until July 2025 has been received and was under internal review. This plan supports the use of long hole open stope mining.

During July and August gold concentrate shipments totalled 235 tonnes with a sales value of £1.9 million. Scottish gold doré sales made to Scottish jewellery companies during those past couple of months totalled £46,160. In July, Scotgold said it had kicked off a third-party review of its operations after “disappointing” production results in recent months. This would initially encompass an assessment of the mine design, schedule and production forecasts, it added at the time.

Contrasting fortunes for two companies behind Scotland's new gold rush