Scotgold at risk of going into administration
Scotgold is at risk of falling into administration, the London-listed gold mining company warned on Monday, explaining that it required a significant capital investment to deliver on its mine plan.
The owner of the Cononish mine, in Scotland, said that the initial third-party review of its mine plan suggested no fatal flaws in the mineral resource estimate of grade control modelling process. However, to deliver to the plan, it would need to raise additional financing.
Scotgold stated that it was in advanced discussions to raise funding that would be sufficient for the company to continue as a going concern.
“The outcome of the funding discussions is highly uncertain and if the company cannot conclude a significant fundraise, it will cast material uncertainty for the company to continue as a going concern.”
Scotgold noted that one unsecured creditor had demanded full payment of outstanding interest. Should the creditor not agree to a payment plan, a default is possible and could mean that the business faces administration in the next few weeks.
Trading in the company’s shares was suspended on Monday morning.
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