Scotgold Resources Limited’s shares (AIM: SGZ) surged by 18% as it secured the much-needed financial support of US$500,000 and announced a cost-effective ore extraction method at its mine near Loch Lomond.
The funding is an advance on an offtake deal, and the company’s main debt provider has deferred interest payments until the year-end. Despite the positive news, the shares have lost 75% of their value this year and closed at 14.62p, up 2.12p.
Scotgold Resources Limited (AIM: SGZ), Scotland’s first commercial gold producer, is pleased to announce that, further to the previous announcements made on 27 and 30 March, it has secured a US$500,000 advance to assist with short-term working capital from its gold offtake partner which will be received on 5 April 2023. The primary repayment mechanism will be executed by offsetting US$100,000 against monthly deliveries from July to November 2023 inclusive. The interest rate being charged is SOFR + 4.5% per annum.
Additionally, Bridge Barn Limited (“Bridge Barn”), a company owned and controlled by Mr Nathaniel le Roux, non-executive Director, and provider of debt funding to the Company, has agreed to postpone all interest payments that are currently due and payable by the Company to Bridge Barn up to and including 1 December 2023. The total of the interest payments being deferred is £450,000.
The deferral of interest payments constitutes a related party transaction pursuant to AIM Rule 13 (the “Related Party Transaction”). The independent Directors consider, having consulted with Shore Capital, the Company’s nominated adviser, that the terms of the Related Party Transaction are fair and reasonable insofar as Shareholders are concerned.
