Rights Issue

RNS Number : 8921T

Scotgold Resources Ltd

26 November 2013

 

26 November 2013

SCOTGOLD RESOURCES LIMITED

("SCOTGOLD" OR "THE COMPANY")

NON-RENOUNCEABLE RIGHTS ISSUE

Scotgold Resources Limited (ASX: SGZ) is pleased to announce a pro-rata non-renounceable rights issue of fully paid ordinary shares in the capital of the Company ("New Shares") on the basis of three (3) New Shares for every four (4) existing shares held at the record date of 5 December 2013 ("Record Date").

Shares under the Rights Issue will be offered at 0.50 cents per New Share. The maximum number of New Shares which may be issued under the Rights Issue is 166,174,304 to raise approximately AUS$830,871 (based on the current capital structure of the Company).

New Shares issued under the Rights Issue will rank equally with existing shares and the Company will apply for the New Shares to be admitted to both the ASX and AIM.

Optionholders are not entitled to participate in the Rights Issue without first exercising their options to be registered as a Shareholder on the Record Date, in accordance with the terms and conditions of their options.

An Appendix 3B, a notice under section 708AA(2)(f) of the Corporations Act  and an offer document ("Offer Document") in respect of the Rights Issue can be found at the Company's website at www.scotgoldresources.com.au.  The Company confirms it is in compliance with its continuous disclosure obligations.

The proposed timetable for the Rights Issue is as follows;

Event	Date
Announcement of Rights Issue, Appendix 3B, First Cleansing Notice and Offer Document	26 November 2013
Notice Sent to Security Holders	28 November 2013
Ex Date (date from which securities commence trading without the entitlement to participate in the Rights Issue)	29 November 2013
Record Date (date for determining entitlements of eligible shareholders to participate in the Rights Issue)	5 December 2013
Offer Document Dispatched to Shareholders (expected date of dispatch of offer document, entitlement and acceptance forms)	6 December 2013
Rights Issue Opens	6 December 2013
Closing Date* 5pm (WST)	23 December 2013
New Shares quoted on a deferred settlement basis	24 December 2013
ASX Notified of Undersubscriptions	30 December 2013
Issue Date**	30 December 2013
Second Cleansing Statement lodged with ASX (under section 708A (5))	30 December 2013
Dispatch Holding Statements**	31 December 2013

*Subject to the Australian Listing Rules, the Directors reserve the right to extend the Closing Date for the Offer at their discretion.  Should this occur, the extension will have a consequential effect on the anticipated date of issue for the Securities

** Dates are indicative only

The Company intends to apply the funds raised from the Rights Issue as follows;

a)                     meet costs on the Rights Issue,

b)                     progress on the Company's projects and review the Company's mining plant and capital requirements (as described below), and

c)                     general working capital.

As separately announced today the Company has identified a number of possible 're-engineering' opportunities to advance Cononish whilst reducing the capital required to bring the project to production. The board believe that these opportunities have considerable merit under current market conditions and it is intended that part of the proceeds from the rights issue will be used to undertake initial evaluations.

Since publishing the results of the Cononish Gold and Silver project Development Study in April 2013 (see release Cononish Development Study Results 30/04/2013), the Company has sought a number of alternatives to finance the proposed development and bring it into production within a reasonable time frame. However, access for the Company to the requisite funding described under the Development Study remains difficult.

Accordingly, the Company is considering a smaller initial project, treating higher grade material  within the resource through a smaller processing facility.. Examination of the Cononish resource indicates an overall 'higher' grade zone above the current adit suitable to be mined separately from other lower grade material above and below this. Internal, 'pre - scoping' estimates indicate that the capital expenditure could be reduced significantly. Mining of the higher grade initial portion of the resource would not preclude mining the balance of lower grade material should gold prices and cost profiles be suitable at that stage but this would have to be decided under a separate mine plan.  Any alteration to the project will necessarily require discussion with the Loch Lomond and the Trossachs National Park Planning Authority.

For further information please contact:

United Kingdom:

Scotgold Resources Limited	Westhouse Securities Limited	Bankside Consultants
John Bentley (Chairman) Tel: + 44 (0)7785 921505 Chris Sangster (CEO)	Richard Baty / Martin Davison	Simon Rothschild
Tel: [phone]	Tel: [phone]	Tel [phone]

Australia:

Scotgold Resources Limited	Professional Public Relations
Peter Newcomb (Company Secretary)	Belinda Newman
Tel:          [phone]	Tel:          [phone] Mobile:   [phone]

Background

Scotgold Resources

•              Scotgold Resources is a mining exploration and development company listed on the Australian Securities Exchange in January 2008 and the AIM market of the London Stock Exchange in the UK in February 2010.

•              The Company was formed with its sole focus on exploring for gold and silver in Scotland, with the already identified Cononish Gold and Silver Project as its core asset. Once in production, the Project will be Scotland's first commercial gold mine.

•              The Company holds Crown options of some 4200km2 covering the highly prospective Dalradian terrain in the SW Grampians of Scotland

•              Scotgold acquired the Cononish Gold and Silver Project in 2007 and has been working towards bringing the project to production in conjunction with its ongoing exploration efforts at Cononish and in the south west Grampians.

•              In July 2011 Scotgold submitted its reapplication for planning permission, which was recommended for approval in October 2011 subject to finalizing conditions and various legal agreements

•              In February 2012, the Decision Notice granting planning permission was issued by the Planning Authority and the Crown lease granted in May 2012

 

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