Troubled Scottish gold miner Scotgold Resources is inching ever closer to putting its operations at Cononish, Argyll, into administration.
In an announcement to the London Stock Exchange today, Scotgold said it expected to proceed with an administration process “soon”.
Trading of Scotgold’s shares on London’s Alternative Investment Market was suspended in September after it said it needed “significant” funding to continue as a going concern.
Scotgold’s November woes
On November 7 the company announced it was considering the appointment of administrators “over the coming days“.
Advanced financing discussions with a strategic investor “have not resulted in an investment at this time”, it added.
Just a day later Scotgold revealed its largest secured creditor and biggest shareholder, former chairman Nat le Roux, had quit the board.
Workers on unpaid leave
Most of the firm’s employees – it is thought there are about 85 – have been on unpaid leave “until further notice” since late September.
Those who have worked for the business for at least two years continuously can now, under employment law, request statutory redundancy.
But Scotgold has warned it may not be able to afford their redundancy packages.
In a communication to staff seen by The Press and Journal, the firm said: “As you are aware, we… are in a current state of uncertainty after attempts to gain the much-needed financial injection to continue operating did not eventuate.
“This has left us in a state of limbo and, until we have anything certain to share, you remain on lay-off.
“You have now been on temporary lay-off for a period greater than six weeks and, as such, you have the right to request statutory redundancy.”
Employees urged to contact Acas
Scotgold added: “We cannot guarantee that the payment will be fulfilled due to the current financial circumstances, therefore, you should contact Acas (the Advisory, Conciliation and Arbitration Service) for independent advice.”
In today’s market update, the company said directors were continuing to work with advisors.
Meanwhile, Bridge Barn (controlled by Mr le Roux) has notified Scotgold it has enforced ownership rights granted under a loan agreement signed in May 2018.
Scotgold’s sorry saga
Efforts to ramp up production at Cononish, near Tyndrum, hit challenges earlier this year.
Bosses were forced to shore up the firm’s finances after production levels fell “below plan”.
And in late March shares in the company slumped more than 65% after it highlighted the potential for a “material uncertainty” over its “very immediate” future.
It also revealed it had called in the police after the email accounts of executive directors were accessed by “unauthorised persons” and “specious emails” sent in their names to numerous people.
The company holds 13 lease option agreements covering an area of nearly 1,120 square miles of the central Highlands, mostly in rural Perthshire.