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RMB Agreement

2 Jul 2012 10:53

RNS Number : 6397G
Scotgold Resources Ltd
02 July 2012
 



Scotgold Resources Limited ("Scotgold" or the "Company")

 

Pre Development financing for the Cononish mine agreed with RMB Resources

 

Scotgold Resources Ltd ("Scotgold" or the "Company") (ASX:SGZ, AIM:SGZ) is pleased to announce that agreement has been reached with RMB Resources ("RMB") for a £1.18m financing (the "Facility"). This will provide funds to allow Scotgold to take the Cononish gold project in Scotland through to its final development decision. In particular the Facility will enable Scotgold to continue drilling at Cononish with a view to improving confidence in that part of the resource that will be mined in the early years of the mine life thereby enhancing the debt capacity of the project.

The Facility is a convertible loan structured as a secured corporate loan facility with share options which provides for RMB to acquire Scotgold shares at a cost equal to the value of the loan if all the options are exercised. The strike price for the RMB options is £0.045.

The Facility will be repaid on the earlier of the date that equity or debt funds are available or 31 December 2013. The annual interest rate for the Facility will be Libor plus 5%.

The Facility has been arranged by RMB and will be provided by RMB Australia Holdings Limited. RMB's investment committee has approved the Facility subject to the satisfactory completion of legal due diligence and documentation.

In addition to the Facility agreement, Scotgold has agreed to mandate RMB to arrange a gold pre payment facility to fund the development of the Cononish gold project. Scotgold has also agreed to mandate LN Metals International Ltd to market the gold-in-pyrite concentrate which will be produced at Cononish to end consumers.

Planning permission for the Cononish Project was granted in October 2011, subject to the completion of legal agreements and outstanding conditions. These were concluded in February 2012 and confirmation of the Crown Lease was received in May 2012. Scotgold commenced infill drilling into the Inferred Resource at Cononish in January 2012. An initial phase of 8 holes has been completed and results are awaited. A further phase comprising up to 9 holes will be commenced shortly and drilling is expected to be completed by October 2012. Subsequent to drilling, the results will be incorporated into a revised Resource Estimate and the recently completed 'Cononish Project Development Plan' (see Press Release 17th April 2012 - Positive Results for Cononish Project Development Study) will be updated with the revised Resource Estimate. It is anticipated a final production decision will be made in January 2013, with a start of development on the project in March 2013.

John Bentley, Executive Chairman of Scotgold, commented "This facility and the endorsement of a bank of RMB's standing puts Scotgold in a position to bring the Cononish gold project into production with an optimum mix of debt and equity thereby enhancing shareholder value. The terms of the pre payment facility have been substantially agreed but final pricing and the extent of the debt capacity will depend upon the final Resource Estimate and the gold price at the time the loan receives credit approval from RMB. It is currently anticipated that approximately 50% of the development costs for the mine may be provided by debt finance".

 

Enquiries to:

 

United Kingdom:

Scotgold Resources Limited

Westhouse Securities Limited

Bankside Consultants

John Bentley (Chairman)

Tel: +44 (0)1838 400306

Chris Sangster (CEO)

Richard Baty / Petre Norton

Simon Rothschild / Elena Kuza

Tel: +44 (0)77 2562 9509

Tel: +44 (0)20 7601 6100

Tel +44 (0)20 7367 8888

 

Australia:

Scotgold Resources Limited

Professional Public Relations

Shane Sadleir

(Non-Executive Director)

Belinda Newman

Tel: +61 (8) 9428 2950

Mobile: +61 (0) 411 704 498

Tel: +61 (8) 9388 0944

Mobile: +61 (0) 401 802 210

 

 

Notes to Editors

 

About Scotgold

Scotgold Resources Ltd is a mining exploration and development company listed on the Australian Securities Exchange (ASX) and the AIM market of the London Stock Exchange (AIM). The Company's principal asset is the Cononish gold and silver project situated near Tyndrum in the Scottish Grampians.

The current resource for the project, estimated in accordance with the JORC code, stands at 163,000 ozs Au and 596,000 ozs Ag in the Measured, Indicated and Inferred categories (estimated using a 3.5g/t cut off) (see Table 1 below for breakdown).

Planning approval for the development of an underground mine at Cononish has been granted and Australian Mining Consultants (UK) Ltd has completed a development study which demonstrates that the project is commercially attractive with a cash operating cost of around US$575/oz.

The Company also holds Crown exploration licences over some 3200 km2 covering the highly prospective Dalradian terrain across the south west Grampians.

 

Table 1:

Cononish Main Vein Gold Mineral Resources (reported at a 3.5 g/t Au cut-off).

Reported using the 2004 JORC Code (JORC, 2004). Tonnages and contained ounces rounded to the nearest 1,000 t or 1,000 oz. Grade rounded to the nearest 0.1 g/t Au. The Inferred Resource grade is reported with a grade range to indicate the likely upside due to the information effect.

Classification

Tonnes (t)

Grade (g/t)

Ounces (oz)

Gold

Gold

Measured

53,000

17.9

31,000

Indicated

73,000

10.2

24,000

Inferred

311,000

10.8 (10 - 16)

108,000

Scotgold Note: Incorporating the grade range, the Inferred Mineral Resource is estimated to lie between 100,000 oz Au and 160,000 oz Au. It should be noted that any upside may not exist or it may only be present in a portion of the resource.

Cononish Main Vein Silver Mineral Resources (reported at a 3.5 g/t Au cut-off).

Reported using the 2004 JORC Code (JORC, 2004). Tonnages and contained ounces rounded to the nearest 1,000 t or 1,000 oz.

Classification

Tonnes (t)

Grade (g/t)

Ounces (oz)

Silver

Silver

Measured

53,000

75.0

128,000

Indicated

73,000

43.1

101,000

Inferred

285,000

40.1

367,000

 

Competent Persons Statement:

 

The Information in this report that relates to Mineral Resources is based on resource estimates compiled by EurGeol Dr S C Dominy FAusIMM (CP), FGS (CGeol), FIMMM (CEng), FAIG (RPGeo), Executive Consultant with Snowden based in the Ballarat, Australia Office. Dr. Dominy has sufficient experience that is relevant to the style of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore reserves. Dr Dominy consents to the inclusion in the report of the matters based on this information in the form and context in which it appears

 

About RMB

RMB Resources is the global resources merchant banking business of the FirstRand group, one of the largest financial services groups in South Africa. The company focuses on providing equity, quasi-equity and debt financing to small to mid-size mining and exploration companies.

About LN Metals

LN Metals is a London based global physical merchant and agent operating in the non-ferrous, and minor metal markets and has an advisory business that delivers specialist services to the junior and mid-tier mining sector. LN Metals is 47% owned by RMB Australia Holdings Limited.

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
MSCUUVKRUAABRRR
Date   Source Headline
17th Jul 201210:23 amRNSInfill Drilling Results
5th Jul 20127:00 amRNSIssue of Options
2nd Jul 201210:53 amRNSRMB Agreement
29th Jun 20129:08 amRNSTotal Voting Rights
7th Jun 201211:59 amRNSExercise of Options
1st Jun 201212:07 pmRNSTotal Voting Rights
22nd May 20129:41 amRNSCrown Lease for Cononish
10th May 201210:17 amRNSReply to ASX query on Appendix 5B
8th May 201211:37 amRNSExercise of Options
4th May 201210:00 amRNSExpiry of Directors' Options
2nd May 201210:26 amRNSTotal Voting Rights
30th Apr 201211:23 amRNSQuarterly Cashflow Report
30th Apr 201211:19 amRNSMarch 2012 Quarterly Report
26th Apr 20129:23 amRNSDirector/PDMR Shareholding
19th Apr 20122:53 pmRNSExercise of Options & Director Shareholding
17th Apr 20127:00 amRNSPositive Results for Cononish Study
3rd Apr 20127:00 amRNSExercise of Options
26th Mar 20127:00 amRNSLetter to Option Holders
16th Mar 20127:00 amRNSHalf Year Report
7th Mar 20129:20 amRNSDrilling Results
1st Mar 20128:49 amRNSTotal Voting Rights
17th Feb 201210:19 amRNSIssue of Equity
13th Feb 20121:43 pmRNSAward of Planning Permission at Cononish
1st Feb 20127:00 amRNSRe-organisation of Nominated Adviser and Broker
31st Jan 20129:30 amRNSQuarterly Cashflow Report
31st Jan 20129:30 amRNSDecember 2011 Quarterly Report
27th Jan 20129:23 amRNSExploration Progress at River Vein
18th Jan 20127:00 amRNSDirectorate Change
6th Dec 201110:54 amRNSTotal Voting Rights and Share Capital
28th Nov 20119:15 amRNSResult of AGM
15th Nov 201111:18 amRNSExercise of Options
2nd Nov 20111:13 pmRNSExercise of Options
1st Nov 201111:25 amRNSTotal Voting Rights and Share Capital
1st Nov 20119:19 amRNSQuarterly Cash Flow
31st Oct 201111:37 amRNSSeptember 2011 Quarterly Report
28th Oct 20119:00 amRNSNotice of AGM and Posting of Annual Report
25th Oct 20113:20 pmRNSPlanning Approved at Cononish
18th Oct 20119:38 amRNSExercise of Options
13th Oct 201110:00 amRNSRecommendation in Favour of Planning Application
3rd Oct 20117:00 amRNSAnnual Report
3rd Oct 20117:00 amRNSTotal Voting Rights
22nd Sep 20117:00 amRNSPLACEMENT OF RIGHTS ISSUE SHORTFALL
16th Sep 20118:04 amRNSPlanning Update
1st Sep 20111:54 pmRNSTotal Voting Rights
1st Sep 20111:52 pmRNSIssue of shares and changes in directors' holdings
30th Aug 201111:01 amRNSExercise of Options
26th Aug 20119:18 amRNSNON-RENOUNCEABLE RIGHTS ISSUE
11th Aug 20118:52 amRNSDispatch of Rights Issue Offer Document
9th Aug 20118:49 amRNSIssue of Equity
29th Jul 201111:30 amRNSAppendix 5B

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