TIDMSGZ
RNS Number : 9839W
Scotgold Resources Ltd
21 April 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN,
THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO
SO WOULD CONSTITUTE A BREACH OF THE RELEVANT SECURITIES LAWS OF
SUCH JURISDICTION .
This Announcement does not constitute a prospectus or offering
memorandum or an offer in respect of any securities and is not
intended to provide the basis for any investment decision in
respect of Scotgold Resources Limited or other evaluation of any
securities of Scotgold Resources Limited or any other entity and
should not be considered as a recommendation that any investor
should subscribe for or purchase any such securities.
This Announcement contains inside information for the purposes
of the UK version of the market abuse regulation (EU No . 596/2014)
as it forms part of United Kingdom domestic law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR"). In addition,
market soundings (as defined in UK MAR) were taken in respect of
certain of the matters contained in this Announcement, with the
result that certain persons became aware of such inside
information, as permitted by UK MAR. Upon the publication of this
Announcement, this inside information is now considered to be in
the public domain and such persons shall therefore cease to be in
possession of inside information .
Scotgold Resources Limited
("Scotgold" or the "Company")
Subscription and Open Offer to raise GBP1.5 to 2.0 million
Long hole stoping at Cononish gold mine progressing well
Scotgold Resources Limited (AIM: SGZ), Scotland's first
commercial gold producer, announces that that the transition to the
long hole stoping mining method at its Cononish gold mine in
Scotland ("Cononish") has progressed well and is in line with
management's mine plan.
Notwithstanding operational progress, the Directors of Scotgold
feel it would be prudent to raise additional equity funds now, both
to procure a resolution definition drill rig (versus using a
contractor drill rig) to bolster grade control modelling for mine
planning and for additional working capital, as Cononish continues
to be developed towards full production.
Noting the current share price, the Directors have decided to
undertake an Open Offer as part of the Fundraising so that UK and
other eligible shareholders will be able to participate if they
wish to. The Fundraising will raise, in aggregate, c.GBP1.5 million
(gross) and up to GBP2.0 million (gross) by way of a proposed
subscription by certain shareholders of the Company as well as an
Open Offer to all Qualifying Participants for new Ordinary Shares,
in each case at a price of 15 pence (the "Issue Price") per
share.
Based on indications received, the Directors expect that the
Open Offer will raise a minimum of GBP1.0 million.
Cononish Operational Update
Long hole stoping commenced on 4 April 2023 and is performing
well and in line with management's expectation. The ROM pad had
around 400 - 500 tonnes of stope mined ore built up at the
beginning of the week commencing the 11(th) April, as the process
plant was offline over the Easter public weekend to comply to the
Company's operating licence. This ore and ore which is being
delivered to the ROM pad daily, is being processed into gold
concentrate and gold doré at the Cononish processing plant (1200 -
1300 tonnes has been processed in the month of April). Since stope
mining commenced, the mine is producing consistently and peaked
with 28 DUX trucks of ore to ROM pad in a day. The grade of the
stope ore is on plan, commencing at 4.9g/t on the first cut and
producing gold concentrate at 230 - 300 g/t gold. This grade is
expected to improve as we bring the stoping front back into the
higher-grade areas of the stope length. Additionally, drones have
been flown in the stope block to check the vein from the 415 to 430
drives which show great recovery and continuity of the vein between
levels. The subsequent stope blocks to be mined along the 115m
stoping length of the eastern section of the 430 West drive
increase in grade as we continue to retreat east on plan.
The next stope block will then be prepared (via drilling) and
blasted as planned. This stoping length will provide ore to the
process plant until August whilst simultaneously work has been
ongoing to ensure next ore development tunnel on the 445 level is
accessed in May to develop and prepare the next stope mining
area.
Subscription
The Company has entered into a subscription agreement with
Maurice and Nicole Mason, existing shareholders, pursuant to which
they have subscribed directly with the Company for an aggregate of
3,333,333 Ordinary Shares in the Company (the "Subscription
Shares") at the Issue Price (the "Subscription") to raise gross
proceeds of GBP0.5 million . The Subscription is conditional upon
Admission of the Subscription Shares.
Maurice and Nicole Mason have also undertaken to the Company to
subscribe for an aggregate of 3,333,333 Open Offer Shares,
equivalent to c. GBP0.5 million, in the Open Offer under the Basic
and the Excess Application Facility.
Offer to Qualifying Participants
The Company confirms that it will provide an opportunity for
existing shareholders to subscribe for up to 10,065,262 new
Ordinary Shares (the "Open Offer Shares") at the Issue Price in
order to raise a minimum further GBP1.0 million and up to a maximum
of GBP1.5 million (the "Offer" or "Open Offer"). Together the
Subscription and the Open Offer are defined as the Fundraising.
Nathaniel Le Roux, Non-Executive Director, William Styslinger,
Non-Executive Director, Peter Hetherington, Non-Executive Chairman
and Ian Proctor, Non-Executive Director have each undertaken to the
Company to subscribe for 1,666,667, 666,667, 730,046 and 198,598
Ordinary Shares in the Open Offer. Charles Outhwaite, significant
shareholder in the Company, has also undertaken to the Company to
subscribe for 320,238 Ordinary Shares in the Open Offer.
Subject to the fulfilment of the terms and conditions referred
to in the Open Offer Circular and, where relevant, set out in the
Application Form, Qualifying Participants are being given the
opportunity to apply for Open Offer Shares at a price of 15 pence
per Open Offer Share, free of expenses, payable in full, in cash on
application, on the basis of:
3 Open Offer Shares for every 20 Existing Ordinary Shares
registered in the name of each Qualifying Participant at the
Record Date and so in proportion for any other number of Ordinary
Shares then held. Entitlements to apply to subscribe for Open Offer
Shares will be rounded down to the nearest whole number.
Qualifying Participants may apply for more or fewer Open Offer
Shares than they are entitled to under the Open Offer and
applications in excess of the Basic Entitlements will be dealt with
under the Excess Application Facility.
-- Maurice and Nicole Mason have undertaken to the Company to
subscribe for an aggregate of 3,333,333 Open Offer Shares,
equivalent to c. GBP0.5 million, in the Open Offer under the Basic
and the Excess Application Facility.
-- Peter Hetherington has undertaken to the Company to subscribe
for a minimum of 730,046 Offer Shares, equivalent to c. GBP109,507,
in the Open Offer.
-- Ian Proctor has undertaken to the Company to subscribe for a
minimum of 198,598 Offer Shares, equivalent to c. GBP29,790, in the
Open Offer.
-- Nathaniel Le Roux has undertaken to the Company to subscribe
for a minimum of 1,66,667 Offer Shares, equivalent to c. GBP250,000
in the Open Offer.
-- William Styslinger has undertaken to the Company to subscribe
for a minimum of 666,667 Offer Shares, equivalent to c. GBP100,000
in the Open Offer.
-- Charles Outhwaite has undertaken to the Company to subscribe
for a minimum of 320,238 Offer Shares, equivalent to c. GBP48,036,
and his full Basic Entitlement in the Open Offer.
As such, the Company expects that the Open Offer will raise a
minimum of GBP1.0 million.
If applications under the Excess Application Facility are
received for more than the total number of Open Offer Shares
available following take-up of Basic Entitlements, such
applications will be scaled back pro-rata to the number of Excess
Shares applied for by Qualifying Participants under the Excess
Application Facility.
A circular to shareholders pursuant to which the Company will
make the Open Offer to Qualifying Participants (as defined below) (
the "Open Offer Circular" ) and which will set out its detailed
terms and timetable, will be posted shortly together with an
accompanying form of application. The Record Date for the Open
Offer is 20 April 2023. A copy of the Open Offer Circular will also
be made available on the Company's website
https://www.scotgoldresources.com/investors/
Assuming the maximum number of Open Offer Shares are issued,
when combined with the Subscription Shares, the total number of new
Ordinary Shares issued would represent approximately 20.0 per cent.
of the Company's Existing Ordinary Shares.
The Issue Price for the Open Offer Shares and the Subscription
Shares represents a discount of approximately 6.25 per cent. to the
middle market closing price per ordinary share of 16 pence on 20
April 2023, being the last business day prior to the publication of
the Announcement.
Phil Day, CEO of Scotgold, 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 development of the underground mine and our
grade control modelling. This will be invaluable as we progress
towards full production at Cononish and for future development of
its current 8-year mine life."
Subscription
The following Directors and shareholders intend to subscribe in
the following minimum amounts as part of the Subscription and Open
Offer:
Director Position Current Subscription Shareholding Open Offer Shareholding % Shareholding
/ PDMR Shareholding Shares Following Shares following Following
/ Shareholder Subscribed Subscription subscribed Open Offer Open Offer
for Admission for Admission Admission
(1) (2) (2)
============== =============== ==================== ============= ============= =========== ============ ==============
Nathaniel Non-Executive
Le Roux Director 25,300,474 - 25,300,474 1,666,667 26,967,141 33.50%
William Non-Executive
Styslinger Director 6,762,336 - 6,762,336 666,667 7,429,003 9.23%
Peter Non-Executive
Hetherington Chairman 4,866,974 - 4,886,974 730,046 5,597,020 6.95%
Non-Executive
Ian Proctor Director 1,323,989 - 1,323,989 198,598 1,522,587 1.89%
Maurice
and Nicole Existing
Mason shareholders 657,343 3,333,333 3,990,676 3,333,333 7,324,009 9.10%
Charles Significant
Outhwaite shareholder 2,134,921 - 2,134,921 320,238 2,455,159 3.05%
============== =============== ==================== ============= ============= =========== ============ ==============
1. Assuming no Ordinary Shares are issued between the date of
this announcement and Admission.
2. Assuming the Open Offer is fully taken up and no Ordinary
Shares are issued between the date of this announcement and Offer
Admission.
Related Party Transaction
The participation of the Subscribing Directors in the Open Offer
constitutes a related party transaction pursuant to AIM Rule 13
(the "Open Offer Related Party Transaction"). The independent
Directors consider, having consulted with Shore Capital and
Corporate Limited, the Company's nominated adviser, that the terms
of the Open Offer Related Party Transaction are fair and reasonable
insofar as Shareholders are concerned.
Working Capital
For the period ended 31 December 2022 the Group recorded a loss
of $9.5 million (2021: $5.6 million) and had a working capital
deficiency of $4.8 million (2021: $13.0 million). The Group
recorded net operating cash outflows of $0.1 million for the
financial period (2022: $1.7 million). The cash position of the
Company as at 31 March 2023 was GBP8k.
These conditions indicate a material uncertainty that may cast
significant doubt over the ability of the consolidated entity to
continue as a going concern and therefore its ability to realise
its assets and discharge its liabilities in the normal course of
business.
The ability of the consolidated entity to continue as a going
concern over the long term will remain dependent on the quantity
and grade of ore mined and processed being within a reasonable
tolerance of the forecast quantity and grade and adherence to the
planned product shipment schedule.
The Group also recognises the inherent operational risks (such
as mining fleet availability, processing plant recovery and
environmental accidents and disputes) and macro-economic factors
(such as the gold price and foreign exchange movements) which could
further impact the Group's ability to continue as a going
concern.
Admission
Application has been made to the London Stock Exchange for the
Subscription Shares to be admitted to trading on AIM ("Admission").
It is currently expected that Admission will become effective, and
that dealings in the Subscription Shares will commence on AIM, at
8.00 a.m. on 25 April 2023 .
Expected Timetable
Record Date for the Open Offer 6.00 p.m. (BST) on 20
April 2023
Announcement of the Fundraising 21 April 2023
Ex-entitlement for the Open Offer 24 April 2023
Admission of and commencement of dealings 25 April 2023
on AIM of the Subscription Shares
Posting of the Open Offer Circular and 26 April 2023
Application Forms
Entitlements credited to stock accounts 27 April 2023
in CREST of Qualifying CREST Shareholders
Latest time and date for receipt of completed 11.00 a.m. (BST) on
Application Forms 12 May 2023
The results of the Open Offer announced
by way of a Regulatory Information Service 16 May 2023
Admission of and commencement of dealings
on AIM of the Open Offer Shares 8.00 a.m. (BST) on 17
May 2023
CREST accounts expected to be credited
for DIs in respect of the Open Offer Shares 17 May 2023
Notes
Each of the times and dates in the above timetable, and shown
elsewhere in this Announcement, are indicative only and if any of
the details contained in the timetable above should change, the
revised times and dates will be notified to shareholders by means
of an announcement through a Regulatory Information Service.
For further information please contact:
Scotgold Resources Limited V ia Celicourt Communications
Phil Day, Chief Executive Officer
Sean Duffy, Chief Financial Officer
Shore Capital Stockbrokers Limited (NOMAD
and Broker)
Toby Gibbs / John More / Tom Knibbs +44 207 408 4050
Celicourt Communications (Financial PR)
Felicity Winkles +44 774 8843 871
Forward-looking statements
This Announcement may include certain "forward-looking
statements" and "forward-looking information" under applicable
securities laws. Except for statements of historical fact, certain
information contained herein constitutes forward-looking
statements. Forward-looking statements are frequently characterised
by words such as "plan", "expect", "project", "intend", "believe",
"anticipate", "estimate", and other similar words, or statements
that certain events or conditions "may" or "will" occur. Forward
looking statements are based on the opinions and estimates of
management at the date the statements are made, and are based on a
number of assumptions and subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking statements. Assumptions upon which such
forward-looking statements are based include that all required
third party regulatory and governmental approvals will be obtained.
Many of these assumptions are based on factors and events that are
not within the control of the Company and there is no assurance
they will prove to be correct. Factors that could cause actual
results to vary materially from results anticipated by such
forward-looking statements include changes in market conditions and
other risk factors discussed or referred to in this announcement
and other documents filed with the applicable securities regulatory
authorities. Although the Company has attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in forward
looking statements, there may be other factors that cause actions,
events or results not to be anticipated, estimated or intended.
There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements. The
Company undertakes no obligation to update forward looking
statements if circumstances or management's estimates or opinions
should change except as required by applicable securities laws. The
reader is cautioned not to place undue reliance on forward-looking
statements.
Shore Capital is authorised and regulated by the Financial
Conduct Authority (the "FCA") in the United Kingdom and are acting
exclusively for the Company and no one else in connection with the
Fundraising, and Shore Capital will not be responsible to any party
other than the Company for providing the protections afforded to
its clients or for providing advice in relation to the Fundraising
or any other matters referred to in this Announcement.
No representation or warranty, express or implied, is or will be
made as to, or in relation to, and no responsibility or liability
is or will be accepted by Shore Capital or by any of their
respective affiliates or agents as to, or in relation to, the
accuracy or completeness of this Announcement or any other written
or oral information made available to or publicly available to any
interested party or its advisers, and any liability therefor is
expressly disclaimed.
No statement in this Announcement is intended to be a profit
forecast or estimate, and no statement in this Announcement should
be interpreted to mean that earnings per share of the Company for
the current or future financial years would necessarily match or
exceed the historical published earnings per share of the
Company.
The price of shares and any income expected from them may go
down as well as up and investors may not get back the full amount
invested upon disposal of the shares. Past performance is no guide
to future performance, and persons needing advice should consult an
independent financial adviser.
The Fundraising Shares to be issued pursuant to the Fundraising
will not be admitted to trading on any stock exchange other than on
AIM.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this Announcement.
DEFINITIONS
The following definitions apply throughout this Announcement,
including the Appendix:
"Admission" the admission of the Subscription Shares and/or
Open Offer Shares (as the case may be) to trading
on AIM becoming effective pursuant to Rule
6 of the AIM Rules
"AIM" the AIM market operated by the London Stock
Exchange
"AIM Rules" the AIM Rules for Companies published by the
London Stock Exchange, as in force at the date
of the Announcement
"Application Form" the application form in respect of the Open
Offer accompanying the Open Offer Circular
"$" Australian dollars, the lawful currency of
Australia
"Basic Entitlements" the pro rata entitlement for Qualifying Participants
to subscribe for Open Offer Shares, pursuant
to the Open Offer on the terms and conditions
set out in the Open Offer Circular and the
Application Form accompanying the Open Offer
Circular
"Computershare" Computershare Investor Services PLC, receiving
agents to the Company and depositary for the
DIs
"Company" or "Scotgold" Scotgold Resources Limited (ABN 42 127 042
773) and whose registered office address is
Suite 4, 189 Stirling Highway, Nedlands, Western
Australia, 6009
"CREST" the Relevant System for the paperless settlement
of share transfers and the holding of shares
in uncertified form in respect of which Euroclear
is the Operator (as defined by the CREST Regulations)
"CREST Regulations" the Uncertificated Securities Regulations 2001
(as amended) (SI 2001/3755)
"Depositary Interest" the depositary interests issued by Computershare
or "DI" representing Ordinary Shares
"Directors" or the the board of directors of the Company
"Board"
"Enlarged Issued the issued ordinary share capital of the Company
Share Capital" as enlarged following the Fundraising and assuming
the maximum number of Open Offer Shares are
issued
"Euroclear" Euroclear UK & International Limited, the operator
of CREST
"Excess Application the arrangement pursuant to which Qualifying
Facility" Participants may apply for any number of Open
Offer Shares in excess of their Basic Entitlement
"Excess Entitlement(s)" the Open Offer Shares for which Qualifying
Participants may apply under the Excess Application
Facility in addition to their Basic Entitlement
"Existing Ordinary the 67,101,751 existing Ordinary Shares in
Shares" issue at the date of the Announcement, all
of which are admitted to trading on AIM
"FCA" the Financial Conduct Authority
"Financial Promotion the Financial Services and Markets Act 2000
Order" (Financial Promotion) Order 2005, as amended
"FSMA" the Financial Services and Markets Act 2000
(as amended)
"Fundraising" the Subscription and the Open Offer
"Issue Price" 15 pence per New Ordinary Share
"London Stock Exchange" London Stock Exchange plc
"Maximum Allocation" 10,065,262 new Ordinary Shares at the Issue
Price which is equivalent to GBP1.5 million
available to be issued pursuant to the Open
Offer
"New Ordinary Shares" the Open Offer Shares and the Subscription
Shares
"Open Offer" the offer of the Open Offer Shares on the terms
and conditions set out in the Open Offer Circular
and the Application Form accompanying the Open
Offer Circular
"Open Offer Shares" new Ordinary Shares to be issued to Qualifying
Participants under the Open Offer
"Ordinary Shares" ordinary shares of no par value in the Company
or, where the context requires, DIs
"Overseas Shareholders" all Shareholders resident in a Restricted Jurisdiction
"GBP" and "p" respectively pounds and pence sterling, the
lawful currency of the United Kingdom
"Qualifying Participants" Shareholders on the register of members of
the Company or the register of holders of DIs,
as applicable, on the Record Date with a registered
address in the UK, Ireland or the Channel Islands
"Record Date" the record date in relation to the Open Offer,
being 6.00 p.m. on 20 April 2023
"Regulatory Information a service approved by the London Stock Exchange
Service" for the distribution to the public of AIM announcements
"Relevant System" has the meaning given in the CREST Regulations
"Restricted Jurisdictions" means all jurisdictions other than the UK,
Ireland or the Channel Islands
"SCC" Shore Capital and Corporate Limited, the Company's
nominated adviser for the purposes of the AIM
Rules;
"SCS" Shore Capital Stockbrokers Limited, the Company's
broker
"Shareholders" holders of Ordinary Shares or Depositary Interests,
as applicable
"Shore Capital" SCC and/or SCS as the case may be
"Subscription" the subscription for the Subscription Shares
at the Issue Price by Maurice Mason and Nicole
Mason
"Subscribing Nathaniel Le Roux, William Styslinger, Peter
Directors" Hetherington and Ian Proctor
"Subscription Shares" the 3,333,333 new Ordinary Shares to be issued
pursuant to the Subscription
"UK" or "United Kingdom" United Kingdom of Great Britain and Northern
Ireland
"US" or "United States" the United States of America, each state thereof,
its territories and possessions, and all areas
subject to its jurisdiction
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IOENKKBBDBKBDQB
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