Scotgold Resources has unearthed fresh investment from the Indian Ocean as it seeks to develop its potentially lucrative prospect in the Loch Lomond and the Trossachs National Park.
The cash-hungry firm said it had issued 10 million new shares to Mauritius-registered Zio Holdings, raising an initial total of around £116,000, with the possibility of more to come.
Early last month it bemoaned a “softening” in capital markets which had complicated its efforts to raise the £22.3m needed for pre-production development of its proposed mine at Cononish, near Tyndrum.
Thursday’s agreement sees Zio take a 4.5% stake in Scotgold, and values the AIM- and ASX-listed concern at around £2.6m.
Zio has also been granted the non-exclusive right to conduct due diligence inquiries on both the company and the Cononish project, with a view to potential further investment in the future.
Depressed shares ticked up on news in London, closing the day up 0.20 at 1.60 following a 14.29% rally.
Last month Scotgold said the site which it expects to produce gold and silver worth almost £17m per year at today’s prices, over an anticipated seven-year lifespan still demonstrated strong economics, but needed the cash to get off the ground and “preserve shareholder value”.
It said it was “actively exploring” and “considering all options” to secure the funding it requires.
Around 60% of the project’s planning conditions have now been satisfied, with the discharge of the remaining restrictions expected to follow shortly.