PERTH (miningweekly.com) – The share price of ASX-listed Scotgold Resources took a tumble on Tuesday as the company announced that fellow-listed Luiri Gold would sell its shareholding in the company, and that it was considering a smaller-scale start to its Cononish gold project, in Scotland.

Luiri Gold, which took part in a September share placement in Scotgold, reported on Tuesday that it would sell its 4.5% shareholding in the company, in light of the current market conditions.

Luiri took the shareholding in Scotgold in the hopes of participating in the Cononish development to provide the company with country risk diversification, and to determine whether synergies were available for its own Dunrobin project, in Zambia.

An earlier development study found that the Cononish project could deliver about £26.3-million in pre-tax cash flow over the life-of-mine at a gold price of $1 300/oz, with a net present value of £11.8-million and an internal rate of return of 26%.

At a capital cost of £22.3-million, the Cononish project would deliver about 19 000 oz/y of gold and 73 000 oz/y of silver.

However, Scotgold said on Tuesday that access to funding had remained difficult, prompting the company to identify a number of possible re-engineering opportunities to advance Cononish, while reducing the capital required to bring the project to production.

Scotgold told shareholders that it was in the early stages of considering a smaller initial project, treating higher-grade material through a smaller processing facility. This would result in significantly reduced capital expenditure, the company added.

Meanwhile, the junior also announced a nonrenounceable rights issue to raise $830 871.

The company would place three new shares for every four currently held, at an issue price of 0.50c each. The maximum number of shares on issue was just over 166.1-million.

Scotgold was trading at a low of A$0.013 a share, down from an opening price of A$0.015 a share.