Scotgold Resources Limited (AIM:SGZ) has drawn down the second tranche of a £3mln loan arranged in April from a syndicate of high-net-worth investors.
The current draw-down total amounts to £2.015mln. It is anticipated that the remaining £985,000 of the loan will be received and fully drawn down on or before 30 June 2022.
Scotgold intends to use the proceeds to fast-track optimisation initiatives at the Cononish gold mine in Scotland, with the principal aim of achieving a gold production run rate of around 23,500 ounces per year by the end of the first quarter of 2023.
These optimisation initiatives included the design, construction, and commissioning of a tailings thickener, a cost-effective technology to improve the throughput and recoveries of concentrate product in the processing plant.
The company will also enhance mining efficiencies to ensure continuous operations and design, construct, and commission an ore sorter at the processing plant between the existing crushing unit and the mill to help reduce costs.
The loan carries interest of 7% and comes with a significant tranche of warrants to be issued to the various members of the consortium.
Scotgold’s shares have risen by around 30 per cent over the past 12 months.