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Scotgold Resources shares leap up after securing funding for Cononish project

The company said the new funding together with existing cash reserves was sufficient to construct the Cononish gold mine in Scotland
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The group said its focus was now on the finalisation of necessary planning agreements

Scotgold Resources Limited (LON:SGZ) saw its shares soar in mid-morning trading Friday after it secured the final tranche of funding for the construction of the Cononish gold mine.

The AIM-listed gold miner said a total of £9mln had been raised through a combination of equity and secured debt, with £4mln raised before expenses through an oversubscribed placing of over 14mln new shares and £5mln through a secured loan facility with Nathaniel le Roux, the company’s non-executive chairman.

READ: Scotgold adjusts the terms of loan from major shareholder

The company said the new funding together with existing cash reserves was sufficient to construct the Cononish gold mine in Scotland, as well as to execute a planned exploration programme and meet ongoing working capital needs.

The group added that its focus was now on the finalisation of the necessary planning agreements, which is expected in the coming weeks. In the interim, site access preparations have been undertaken, detailed construction activity planning is underway and an application for a grant from the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) is in process.

Once these are successfully concluded, the company said the final project schedule will be determined.

Richard Gray, Scotgold chief executive, said: "This is a momentous occasion for the Company and for gold production in Scotland. We have seen a number of significant milestones achieved by the Company in recent years, culminating now in what will be a new gold mining industry in the Scottish Highlands.”

Scotgold shares were up 23.6% at 34p.

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