LONDON (Alliance News) - Scotgold Resources Ltd on Tuesday said it has agreed a GBP1 million increase to its loan with Bridge Barn Ltd, a company owned and controlled by Scotgold Chair Nathaniel Le Roux.
This is in addition to an existing GBP5 million Bridge Barn facility and can be drawn down if needed. The entire GBP6 million loan carries a non-compounded interest rate of 9.0% per year.
The funding is required as a result of increased specifications, as well as for underestimated costs, at its Cononish gold and silver mine in Scotland.
Scotgold has signed a contract with Process Technologies Pty Ltd for the installation of a feed bin, as well as crushing and filtration circuits at the mine, accommodating the mine's full phase two capacity of 6,000 tonnes per month.
Consequently, the peak funding requirement of the first phase of development at the mine has been raised to GBP8.7 million from GBP7.4 million.
Scotgold said its is still on track for first gold production by the end of 2019.
"Not only are we able to report good progress, but the detailed engineering work completed at this early stage has enabled us to enhance the overall project by capitalising on an opportunity to facilitate a possible earlier and more cost effective expansion to phase 2. The first class team we are assembling is building momentum and I look forward to reporting further progress in due course," said Scotgold Chief Executive Richard Gray.
Shares in Scotgold were untraded on Tuesday and had a price of 31.50 pence.
