Member Info for shychap

First creditors meeting this week…

https://publishednotices.asic.gov.au/browsesearch-notices/notice-details/Scotgold-Resources-Ltd-127042773/0c0820a9-3fe8-4350-ad6e-0db153ec9c01

They never clearly stated where the silver went or how much they got for it but they implied that it was bartered to the concentrate buyer to cover his costs.

And now comes the final slap in the face as the price of gold and silver heads strongly north.

The same amateurs who couldn't even forecast the grade of the BPT stockpile; or make more than a few ounces of Scottish gold; or fake a gold pour so that anyone might believe it; or keep within their permitted mine boundary; or keep any promises; or…?

In case you didn't scroll down…

"Resignation of Nominated Adviser

Shore Capital has informed the Company of its intention to resign as Nominated Adviser and Broker to Scotgold with immediate effect of release of this announcement. Pursuant to AIM Rule 1, if a replacement Nominated Adviser is not appointed within one month of today's date, the admission of the Company's shares to trading on AIM will be cancelled. The Administrators will consider this issue in more detail over the next few weeks but based on the information available at this stage the Company does not expect to appoint a replacement Nominated Adviser."

Administrators are in Australia which makes it harder to keep an eye on them. Commiserations to all shareholders apart from Graham Donaldson, Coliwobbles, Risk Manager, hickfromthesticks and the rest of the bully-boy gang who promised riches and would allow no other view. Their loss pleases me - and my devil's advocate pals Shylock, pr100 and Jon Chapman - immensely.

Looks like they're keen to bring the curtain down before they have to publish their final results next month. Pity since shareholders haven't a clue where all the cash went from the fundraisings over the past 18 months. Obviously, none of it was secretly diverted out of the company.

Pre-pack administration imminent. Not sure how NLR managed to do that when the company hasn't technically defaulted on his loan yet:

"Bridge Barn Limited ("Bridge Barn"), a company owned and controlled by Mr Nathaniel le Roux, non-executive Director, and provider of debt funding to the Company, has agreed to postpone all interest payments that are currently due and payable by the Company to Bridge Barn up to and including 1 December 2023. The total of the interest payments being deferred is £450,000." (RNS 5/4/23)

Daily Mail interviews the locals. "It was fun while it lasted," say Cononish landowners.

"Their luck seems to have run out with astonishing speed," observes the Mail, astutely.

https://www.dailymail.co.uk/news/article-12763513/Theres-not-gold-thar-hills-200m-Scottish-gold-rush-finally-lost-glitter.html

The problem with a pre-pack is that it doesn't allow anyone else to bid for the assets so shareholders will never know whether the administrators could have realised more cash through a routine liquidation process. On the plus side, administrators tend to like routine liquidations because it means a bigger fee…but nothing to prevent a pre-pack buyer from reaching an equally lucrative deal with administrator, ie over-paying him for the amount of work involved in a pre-pack.

It's possible that NLR is planning a pre-pack administration which would see him buy SGZ Cononish from the administrators very quickly after administration is confirmed - allowing no opportunity for other options for the disposal of assets to be explored. The outcome for unsecured shareholders would likely be no better.

"Pre pack administrations can be controversial, as they may involve the sale of a company’s assets at a lower value than would be achieved in an open market sale, which can result in losses for creditors, particularly unsecured creditors."

https://www.franciswilksandjones.co.uk/company-administration-guide/

See also: https://www.companydebt.com/what-happens-to-the-shares-of-a-company-that-has-been-liquidated/

If, as looks inevitable, the administrators are called in that would likely be a lengthy, complex process which could take a year or more to conclude - during which time shareholders will not see their periodical reports, lists of assets, lists of creditors, etc unless shareholders register themselves with the administrators as creditors of the company. Only the creditors will be able to access the detailed reports. If necessary, shareholders may need to send an invoice to the company before it goes into administration (eg. For services rendered in online forums: £1.00). That will make you eligible to register as a creditor.

Otherwise, the most information you will get is the standard "Shares are unlikely to have any value", followed by confirmation that they don't.

So, if you want to see what sneaky offers for the assets are being lodged, register as a creditor to get on the administrators' mailing list.

I'm sure there will be plenty of others checking in to tell us how lucky or smart they were to bail out at the right time.

Nat le Roux switches sides as the curtain falls, citing: "unavoidable conflict between the interests of the Company and my personal interest as the major secured creditor".

Today's RNS announces his resignation as SGZ Cononish "heads towards administration".

Tom Winnifrith can't contain himself over at https://tinyurl.com/3d78cxsk

The fat lady cometh. They have had plenty of time to consider their options and it has been clear to some of us for a long time that administration was inevitable. And yet Scotgold are still "considering" it. If they had any other options they would have been bound to say so.

Last week's follow-up:

https://parkswatchscotland.co.uk/2023/10/29/the-crisis-at-the-cononish-goldmine-a-national-park-authority-not-fit-for-purpose/

UK law states that workers on unpaid leave can apply for redundancy cash after 4 weeks if they so choose. That deadline has now passed so Scotgold could already have a redundancy liability which they can't pay - although the Govt will pay a basic amount if a company goes bust.

What they needed to do, but couldn't afford, was open up the full length of the vein before extracting any gold. Instead they tunnelled expensively all over the place like a mad mole chasing short-term gold production which they needed in order to raise the next raft of finance. They probably need £10m and an investor who is happy to wait for any return. Maybe Gina Rinehart is their only hope but she would want to take majority ownership away from NFL.

All the assets are pledged as security for existing loans (unless NLR releases them) and any reputable lender would certainly want some asset-backed security with this basket case. Some kind of off-take deal might be possible but with profitability a long way off, that would just make the business less viable.

Rockhead, I take it you haven't been following the Scotgold whistleblower on Twitter?

As for training, it doesn't give you experience. I'm not willing to take a 400 mile road trip in difficult conditions with a driver who has just passed his test. Most of Scotgold's miners were catering workers according to the mole.

Of course, Scotgold had promised to give jobs to local people so they were hoist with that petard. It also saved them money since experienced miners don't come cheap.