The Scotgold Resources Ltd (LON: SGZ) share price plunged 5.25% after unveiling plans to raise up to £1.5 million (gross) and up to £2.0 million (gross) via a share subscription and open offer. The open offer will be accessible to the UK and other eligible shareholders if they wish to participate.
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The proposed subscription is targeted at certain Scotgold shareholders, while the open offer will be available to all qualifying participants interested in acquiring additional shares in the firm. Scotgold also issued an operational update about the long hole stoping process at its flagship Connonish mine.
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Scotgold Resources confirmed that it started long-hole stoping on 4 April 2023, and the process was progressing well. The company had accumulated 400 – 500 tonnes of stope mined ore in the week starting on 11 April 2023.
However, the company wants to acquire its own resolution definition drill rig (versus using a contractor drill rig) to bolster grade control modelling for mine planning. The firm will use the funds raised for this purpose and for working capital purposes.
Scotgold has entered into a subscription agreement with Maurice and Nicole Mason, current shareholders, where they have subscribed directly with the Company for an aggregate of 3,333,333 Ordinary Shares in the Company at the Issue Price of 0.15p to raise gross proceeds of £0.5 million.
The Scottish mining company expects to raise a minimum of £1.0 million from the subscription and the open offer. Shareholders participating in the open offer can buy three open offer shares for every 20 shares they currently own in the company.
Phil Day, Scotgold Resources CEO, said: “Long hole stoping at Cononish is performing well. With the previous optimisation initiatives completed in 2022 in the underground mine and processing plant, we are now removing ore from the mine and producing gold concentrate through the processing plant in line with our mine plan. The additional funds raised will allow us to purchase a more advanced resolution definition drill rig to further improve the development of the underground mine and our grade control modelling.”
*This is not investment advice.
Sctogold Resources share price.
The Scotgold Resources share price plunged 5.25% to trade at 15.16p, from Thursday’s closing price of 16.00p.
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