Scotgold Resources - Project Update
("Scotgold" or the "Company)
Project Update on
Scotgold is pleased to update the market with regards to progress with development at its
As previously announced, Planning Completion was achieved on 18th
Work on the upgrade of the Dalrigh Junction with the A82 is now well advanced and upon completion the contractor will move on to the installation of the new bridge required over the Crom Allt ford. Together with the already upgraded track, this will provide the project with necessary access for the materials and surface equipment which has been ordered and is scheduled to be mobilised in the spring.
Prior to placing an order for the procurement of the 3,000 tonne per month processing plant required for 'Phase 1' of production at Cononish, the company commissioned the first phase of the detailed design work and confirmatory metallurgical testwork on the planned process route. This was undertaken to provide greater confidence in the cost estimates and performance characteristics of the final plant, prior to commitment. During the course of this work, opportunities have been identified to increase the capacity of certain elements to accommodate the full Phase 2 capacity of 6,000 tonne per month; namely the feed bin, crushing and filtration circuits. A Supply and Installation contract for this plant configuration has now been entered into with
Schedule and Cost Estimates:
Both the two main activity streams of mine development and process plant construction are currently on schedule to achieve first gold production by the end of 2019, as previously announced.
Some modest capital savings have been achieved on the procurement of mining equipment, and together with overall savings on the full scale processing plant, total life of mine capital, including expansion to Phase 2, will be reduced by approx.
As a result of the increased capital estimate during Phase 1 and the ongoing corporate expenditure during the extended planning process in 2018, the Company may require further funding, before becoming cash positive in 2020. To meet this possibility the Company has obtained an additional
The Renegotiated Terms of the Loan constitute a related party transaction under Rule 13 of the AIM Rules for Companies ("the Transaction"). Accordingly, the board of Scotgold, excluding
In accordance with the AIM Rules (Schedule 4), the following information regarding the Secured Loan is provided below:
24 months from date of draw-down of each Tranche respectively. Early repayment is at the option of the Borrower for no penalty.
· Date and amount of first draw-down:
On or before
· Date and amount of second draw-down:
Within 6 months of first draw-down for an amount of
· Date and amount of third draw-down:
Within 6 months of second draw-down for an amount of
· Date and amount of fourth draw-down:
Within 6 months of third draw-down for an amount of up to
Interest rate is 9.0% calculated annually (non-compounded) and payable at the end of the 24 months term for each Tranche respectively. If the Secured Loan is repaid early, interest will be calculated up to date of repayment.
Debenture over the assets and undertakings of all of the assets of the Company's 100% owned subsidiaries,
In addition to the novel geochemical sampling approach, the Company conducted an orientation survey using induced polarisation and VLF/magnetics techniques. While the survey was cut short due to very bad weather, the initial results have shown that the selected survey techniques are an excellent method of mapping the geology of the Cononish deposit in three dimensions. This is particularly the case with the dolerite dyke and major structures. The survey will be extended in the spring so that we can complete the 3D modelling of the Cononish geology.
"Not only are we able to report good progress, but the detailed engineering work completed at this early stage has enabled us to enhance the overall project by capitalising on an opportunity to facilitate a possible earlier and more cost effective expansion to Phase 2. The first class team we are assembling is building momentum and I look forward to reporting further progress in due course."
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
For further information please contact:
Tel: +44 (0)1838 400 306
Nomad and Joint Broker
Tel +44 (0) 20 3470 0470
Tel: +44(0)7703 167 065
This information is provided by RNS, the news service of the
Quick facts: Scotgold Resources Limited
Market Cap: £32.09 m
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