Scotgold Resources reassures investors over funding speculation
Goldminer Scotgold Resources has responded to reports which have cast doubt on the company’s finances and ability to fund its exploration programme.
In a recent announcement, Scotgold’s board said that: “The Directors of the Company remain confident that all of the Company’s financial commitments, including those relating to exploration activities, can be funded for the foreseeable future from existing cash resources, loan facilities and anticipated future cash flows from the Cononish gold mine, which is expected to commence production at the end of February 2020.”
The dispute began over figures quoted for exploration and licence fees provided to the Crown Estate Scotland in December 2018 as part of an application to exchange five existing mining licences for thirteen new licences.
The total figure was around £8.4m.
Regarding this, the company’s statement said: “The company wishes to make clear that only the Licence Fee is a contracted amount and is conditional on the Company continuing to hold all 13 licences over the remaining five year period ending in November 2024.
“The exploration figures were proposed estimated figures provided at the time of the application which the Company is not contractually obliged to spend. The figures are also subject to material change over time.
“The figures may change owing to the results of exploration and the available cash resources to fund exploration. For example, the company’s budget for the year ending 30 June 2020 currently anticipates that exploration spending will be approximately A$0.5 million. For the year ended 30 June 2019 the Company’s exploration spend was approximately A$0.6m.”
The company added that it’s licences are subject to a bi-annual review by the Crown Estate Scotland beginning in November 2020.
Scotgold added: “At such reviews, the Crown Estate Scotland will assess a progress report provided by the Company. Such reports will include a review of past exploration work and proposed new work programmes. Whilst the amount of exploration expenditure is a relevant consideration as to the granting and retention of licences, it is one of many considerations and not determinative.”