Scotgold Resources , the company developing a gold mine near Tyndrum and looking at other sites in Scotland, has hit back reports which have cast doubt on its finances and ability to fund its exploration programme.
In a stock market statement – thought to be in response to comments made on an investment site - the board said it was confident that all of the company's financial commitments, including those relating to exploration activities, can be funded for the foreseeable future from existing cash resources, loan facilities and anticipated future cash flows from the Cononish gold mine.
The Cononish mine is expected to commence production at the end of February 2020.
The dispute centres on figures quoted for exploration and licence fees provided to the Crown Estate Scotland in December 2018 as part of an application to exchange five existing mining licences for thirteen new licences. The total figure was around £8.4m
“The company wishes to make clear that only the licence fee is a contracted amount and is conditional on the company continuing to hold all 13 licences over the remaining five year period ending in November 2024,” it said.
“The exploration figures were proposed estimated figures provided at the time of the application which the Company is not contractually obliged to spend.
The figures are also subject to material change over time. The figures may change owing to the results of exploration and the available cash resources to fund exploration.”
Scotgold said its licences are subject to a bi-annual review by the Crown Estate Scotland from November 2020.
“At such reviews the Crown Estate Scotland will assess a progress report provided. Such reports will include a review of past exploration work and proposed new work programmes.
“Whilst the amount of exploration expenditure is a relevant consideration as to the granting and retention of licences, it is one of many considerations and not determinative,” it added.
