The Scotgold company holding the rights to mine for silver and gold at Cononish in North Argyll, floated on AIM [Alternative Investment Market] back in February 2010, has raised the first £800,000 of the £20 million in total that it will eventually need to develop the mine.
It has issues over 15 million new shares at 3.1 pence and extended by £350,000 an existing loan of £1.2 million; telling its shareholders that it will need an overall £10 million in equity and £10 million in loans for the commercialisation of the asset.
Scotgold expects to extract 74,000 ounces of silver and 21,000 ounces of gold from Cononish. While pre-production costs have been driven by commodity prices to a 100% hike in the last three years, the company estimates that eighteen months of production will recover its development costs.
The new shares issue element of the initial fundraising for development saw Scotgold’s overall share value fall to a year-long low of 3.375p.