Scotgold Resources* (SGZ LN) 35p, Mkt Cap £17m – First production in sight as GBP gold price hits all-time high BUY – TP 84p (up from 57p) Scotgold Resources is an AIM listed gold development company with the wholly owned flagship high grade Cononish gold project in Scotland. The deposit hosts 198koz gold at 11.1g/t in mineral reserves and 266koz gold at 13.4g/t in total mineral resources, based on the latest BFS (Feb/17). Located in an environmentally sensitive region of the Loch Lomond and Trossachs National Park, the team has established a good working relationship with the Park Board, adjusting project parameters to the status of the area including no use of cyanide in the on-site processing of mined ores, opting instead to use gravity separation and flotation, as well as dry stack tailings storage designed to replicate the glacial landscape of the area. The Park Board unanimously voted in favour of granting the mining permit with development works launched in Dec/18 with first gold targeted by Q1/20. The team is implementing a phased development strategy starting off at 36ktpa processing rate (14kozpa) before ramping up to 72ktpa (22kozpa) in ~30m post first production according to the BFS. The project is fully funded with £4m in cash as of Dec/18 as well as £7.5m in a standby loan facility. Doubling of the capacity of the plant as part of Phase II is expected to be funded through internal cash flows. Cononish TCC are estimated to average c.$550/oz (c.£390/oz at 1.4$/£ exchange rate) allowing it to earn above industry average EBITDA margins over the course of its current 9y life of mine. At full capacity the project is estimated to generate £14m in EBITDA per annum and £12m in FCF (£11m including corporate admin costs) assuming 22kozpa at $1,455/oz gold price and 1.4$/£ exchange rate. • The Company has recently released a project update touching on the progress of construction works at the high grade Cononish project as well as updating capital cost estimates and first production guidance. • The Company has recently released a project update touching on the progress of construction works at the high grade Cononish project as well as updating capital cost estimates and first production guidance. • First production target slipped slightly and is now expected in the end of Feb/20 versus originally guided Dec/19 on the back of civil engineering design delays. • Earthworks are due to commence in September, four months behind the targeted May start, as the characteristics of the area (elevation, environmental conditions, geotechnical factors) required more design work. • Mine development is continuing with ore access to be completed by end of 2019 as scheduled. • Major processing plant parts sourced from South Africa and China are currently in transit and should be arriving on site in due course. • Life of mine capital cost has been revised from £20m estimated in the Mar/17 BFS to £27m. • Operating costs have come up only slightly to £398/oz v £373/oz estimated previously as higher power costs assumed have been partly compensated by lower operating expenses related to tailings management; also, we suspect higher cash costs reflect higher royalty expense due to stronger gold prices assumed (Company used £1,200/oz gold price in update project economics study v £920/oz in the Mar/17 BFS). • Updated costs called for an additional £2.5m capital injection that is being funded through a combination of equity and debt. • Nat le Roux agreed to extend the existing loan facility by £1.5m taking the total to £7.5m; additionally, the Company is issuing 3.3m new shares at 35p for £1.15m of gross proceeds (more than 80% of the equity raise is being provided by three Company Directors and a member of the management team • The term of the loan has also been extended to 36 months (from 24 months) from each drawdown. • On the positive note, the Company updated BFS economic study reflecting the latest strong run in gold prices. This more than compensated for higher costs with life of mine EBITDA up ~45% at £146.7m at £1,200/oz gold price ($1,500/oz) compared to previously assumed £920/oz ($1,150/oz at 1.25 exchange rate used in the BFS). This brings a ~46% increase in NPV10% (pre-tax) to £63.3m. Conclusion: As much as an increase in capital costs and a delay to first production that led to a debt and equity capital injection by investors is an unwelcome setback, the Scotgold investment case remains strong with the high grade Cononish project continuing to offer strong cash margins (SPA TCC estimate of £386/oz v current ~£1,270/oz spot gold price). Furthermore, as previously highlighted, the team has brought forward a fair share of the Phase 2 capex which in turn helps to de-risk and potentially accelerate the future switch to Phase 2. We assumed first gold from Phase 2 in H1/22 v H2/22 as per BFS timing. The Company benefits from weak British pound amid fears over no-deal Brexit and strong gold prices driven by a revision to investors’ expectations of future growth prospects as well as geopolitical risks including rising tensions in Hong Kong and the dissolution of the Italian government. We have included expanded capex and increased number of shares reflecting the latest equity raise (48.9m) as well as increased our gold price assumptions ($1,455/oz v $1,350/oz) and slightly adjusted USD/GBP rate down for 2020 (1.3 v 1.4 previously; although, kept it at conservative 1.4 from 2021 onwards, offering further upside to the valuation should the pound underperform our assumptions). All in all, we have revised our target price to 84p (up from 57p) and reiterated our buy recommendation highlighting the attractive investment case of the Company that is coming into production at the time when GBP denominated gold prices trade at record high *SP Angel acts as Nomad and Broker to Scotgold Resources
Scotgold Resources* (SGZ LN) 35p, Mkt Cap £16m – Fundraising, Cononish project and exploration update BUY – TP under review • The Company updated Cononish cost estimates and first production target on the back of civil engineering design delays. • First production is now expected end Feb/20 versus originally guided Dec/19. • Capital cost has been revised from £20.1m estimated in the Mar/17 BFS to £26.8m. • Operating costs have come up only slightly to 398/oz v £373/oz estimated previously as higher power costs assumed have been partly compensated by lower operating expenses related to tailings management; also, we suspect higher cash costs reflect higher royalty expense due to stronger gold prices assumed. • Updated costs called for an additional £2.5m capital injection that is being funded through a combination of equity and debt. • Nathaniel le Roux agreed to extend the existing loan facility by £1.5m taking the total to £7.5m; additionally, the Company is issuing 3.3m new shares at 35p for £1.15m of gross proceeds. • The term of the loan has also been extended to 36m (from 24m) from each drawdown. • More than 80% of the equity raise is being provided by three Company Directors and a member of the management team. • On the positive note, the Company estimates that the latest strong run in gold prices more than compensates for higher costs with life of mine EBITDA up ~45% at £146.7m when £1,200/oz gold price is used compared to previously assumed £920/oz (equivalent to $1,500/oz and $1,150/oz at 1.25 exchange rate used in the BFS). This brings a ~46% increase in NPV10% (pre-tax) to £63.3m. • Regarding operations update, mine development is continuing with ore access to be completed by ed of 2019 as scheduled. • Earthworks are due to commence in September, four months behind the targeted May start, as the characteristics of the area (elevation, environmental conditions, geotechnical factors) required more design work. • Major processing plant parts sourced from South Africa and China are currently in transit and should be arriving on site in due course. • On exploration side, the Company has successfully identified surface anomalies within the Company’s license areas including strong anomaly 1km NE of the Cononish orebody and high gold (125ppb) and silver (420ppb) in soil assays at the Inverchorachan area. Conclusion: As much as an increase in capital costs and a delay to first production that led to a debt and equity capital injection by investors is an unwelcome setback, the Scotgold investment case remains strong with the high grade Cononish project continuing to offer strong cash margins (TCC of £398/oz v current £1,270/oz spot gold price). Furthermore, as previously highlighted, the team has brought forward a fair share of the Phase 2 capex (plant expanded to 6ktpm, up from Phase I 3ktpm) which in turn helps to de-risk and potentially accelerate the future switch to Phase 2. The Company benefits from weak British pound amid fears over no-deal Brexit and strong gold prices driven by a revision to investors’ expectations of future growth prospects as well as geopolitical risks including rising tensions in Hong Kong and the dissolution of the Italian government. We remain buyers of Scotgold Resources and will release updated target price and earnings estimates shortly. *SP Angel acts as Nomad and Broker to Scotgold Resources
Scotgold Resources Limited provides an update to the development of the Cononish Gold and Silver Mine with an associated equity and debt fundraising of £2.65 m, revised Life of Mine key financial metrics based on a gold price of £1,200/ oz and an update to exploration activities on the Grampian Project.. ·The detailed Cononish design, capital and operational...
Scotgold Resources* (SGZ LN) 36.5p, Mkt Cap £16.7m – Appointment of director • Scotgold report the immediate appointment of Mr. Ian Proctor as Non-Executive Director, who is a Chartered Accountant and currently Chief Executive Office of Sky Betting and Gaming (“SBG”) and had previously held the position of Chief Financial Officer of SBG for over 10 years. During this period, he played a key role in SBG's buy out from BskyB, the preparation of the listing of the Company and its ultimate sale prior to listing. • Chairman Nat Le Roux adds, “His wealth of experience as a finance professional not only enhances the breadth of experience available to the board, but being Stirling, Scotland based, his proximity to the operations means that our executive accounting function can also benefit." *SP Angel acts as Nomad and Broker to Scotgold Resources
RNS Number: 0964 J Scotgold Resources Ltd 15 August 2019 15 August 2019. Scotgold is pleased to announce the appointment of Mr Ian Proctor as a Non-Executive Director of the Company with immediate effect.. His wealth of experience as a finance professional not only enhances the breadth of experience available to the board, but being Stirling, Scotland based, his...
Scotgold Resources (SGZ) 35.50p £16.20m Scotgold announces that it has decided not to extend the Pomar Exploration Licence in Portugal and has applied to the Director General of Energy and Geology ("DGEG") to terminate the License. As announced on 26 Feb 2019, Scotgold's 'earn in' agreement on Pomar was terminated. Scotgold continues to believe in the potential of the Pomar licence and has enjoyed a constructive working relationship with the DGEG, however the exploration results to date, including the most recent soils sampling, suggest a significant further work program would be required to realise this potential. As the Company's short term focus is on the successful development of the Cononish Gold and Silver Mine, (the "Cononish Project") and advancement of the encouraging exploration results in the vicinity of the Cononish Project, the Company has taken the decision to terminate the License and minimise further expenditure at this time.
RNS Number: 9016 F Scotgold Resources Ltd 18 July 2019 18 July 2019 Scotgold Resources Limited. Scotgold announces that it has decided not to extend the Pomar Exploration Licence in Portugal and has applied to the Director General of Energy and Geology to terminate the License.. As announced on 26 Feb 2019, Scotgold's' earn in' agreement on Pomar was terminated.
RNS Number: 8903 Y Scotgold Resources Ltd 14 May 2019 14 May 2019. Related to the December 2017 Rights Issue, a total of 2,125,149 "non-transferable" options to acquire new ordinary shares of the Company at an exercise price of £0.40 per share, expiring on 31 December 2019 were issued. It is believed Rhodora would be a strategic investor who would be supportive of...
Scotgold Resources* (SGZ LN) 34.0p, Mkt Cap £15.5m – Exploration update BUY – Target Price 57p Soil geochemistry identified new zones of potential mineralisation extensions to the Cononish deposit that may expand the available JORC mineral resource. Additionally, the survey carried over the drainage area around the Beinn Udlaidh anomaly, located next to Cononish, confirmed that it is a prospective gold target that will be followed up with further geochemistry and geophysics data collection. The Company used a so-called ‘ionic leach gechemistry’ survey for soil and stream sediment samples that proved to be faster, simpler and more cost effecting that conventional methods. The results follow on successful initial calibration of the technique over the known Cononish gold orebody The team is planning to use the method combined with Induced Polarisation and Very Low Frequency Magnetics in the future exploration to identify drilling targets. *SP Angel acts as Nomad and Broker to Scotgold Resources
RNS Number: 5545 U Scotgold Resources Ltd 01 April 2019 1 April 2019. Scotgold is pleased to update the market with regards to its exploration activities on the Cononish Project, and Grampian Project, in Scotland.. ·New zones of interest identified for possible extensions to Cononish orebody.
Scotgold Resources* (SGZ LN) 33.5p, Mkt Cap £15.3m – Interims BUY – Target Price 57p The Company released financial interim results for the period ending 31 Dec/18 yesterday. Loss before taxes came in at A$2.1m (H1/17: A$0.8m) reflecting ramp up of expensed Cononish development related costs. Administration costs totalled A$0.3m (H1/17: A$0.2m) while pre-development costs amounted to A$1.3m (H1/17: -). Capital expenditure during the period came in at A$1.7m (H1/17: A$0.2m). The Company raised £750k at 27.5p in October and repaid £1.0m owed to the Company’s Chairman Nat le Roux in September. Closing cash balance stood at A$7.2m with no debt on the balance sheet as of December 2018. Although, the Company has got access to £6.0m loan from Bridge Barn, a wholly owned and controlled entity of Nat le Roux, which together with available cash balances suggests the Cononish project is fully funded to production. First gold remains to be targeted for Q4/19. Conclusion: The Company is ramping up development works ahead of first production due in Q4/19 with the project remaining fully funded given available cash balances and access to the £6.0m loan facility. *SP Angel acts as Nomad and Broker to Scotgold Resources
RNS Number: 5091 T Scotgold Resources Ltd 21 March 2019 Scotgold Resources Limited. The Board of Scotgold Resources Limited is pleased to advise all shareholders and interested investors of the release of the Company's interim results for the half year ended 31 December 2018.. RNS is approved by the Financial Conduct Authority to act as a Primary Information...
Scotgold Resources Limited (SGZ.L) Announced, in an update on progress with development at its Cononish Gold and Silver Mine, near Tyndrum, Scotland that Planning Completion was achieved on 18 December 2018 and a further 4 employees have since been recruited, bringing the mining department strength to 11 staff. Activities have focussed on training and on the establishment of the enlarged adit portal on a day shift basis. Once beyond the portal area, and with sufficient competent operators in place, a second shift will be added and the full scheduled production rate will be achieved.
Scotgold* (SGZ LN) 32p, Mkt Cap �14m – Start of productio at Cononish guided for Q4/CY19 BUY – Target Price 57p Underground mine development commenced with enlarging the existing adit portal to accommodate mining equipment. The Company employed General Manager, Process Manager and Junior Mining Engineer strengthening the operations team to 11 people. On surface infrastructure, upgrading the Dalrigh Junction with the A82 is well advanced with works on the installation of the new steel bridge over the Crom Allt ford are due to start shortly. Access roads are widened and upgraded for materials and equipment deliveries. Surface equipment has been ordered and is on schedule for arrival in the spring. On processing plant, the team decided to optimise sizing of certain process facility units to accelerate the shift from Phase I (3ktpm) to Phase II (6ktpm) as well as cutting total Cononish development capex. In particular, the Company will be ordering larger feed bin, crushing and filtration circuits which would accommodate higher throughput rates once all operations ramp up to 6ktpm. Among major processing plant related items left for phased development schedule are the mill and flotation cells. As such peak funding for Phase I has gone up to �8.7m from �7.4m; items pulled forward in terms of development spend in turn reduced Phase II with a total saving on the development capex of �1.0m (from �20.1m to �19.1m) Plant configuration, procurement and installation is managed by APT Ltd that supplied the Bulk Processing Trial plant in 2016. In light of accelerated development schedule, the Company indicated it may require more funding before becoming cash positive in 2020 which in turn had the Company securing an additional �1m loan facility from Nat le Roux. The facility comes on top of the existing �5m with the terms of the total secured loan including 24 month term from the date of each drawdown, 9%pa interest payable at the end of the 24 months’ term and no penalty early repayment clause. First gold production is scheduled for the end of 2019. On exploration front, the Company reported on positive reconciliation of the newly utilised geochemical sampling technique in mapping mineralised sections of the Cononish Vein called ionic leach soil drainage sampling approach. The team is planning to expand the survey to evaluate other anomalies identified in the area. On the Pomar gold project in Portugal, PanEx Resources has withdrawn from the March 2018 earn in agreement with Scotgold retaining 100% interest in the asset. The team is currently completing its own soil sampling programme ahead of the decision whether to apply for an extension of the license. Conclusion: The Company is moving towards production at the high grade Cononish gold project with first gold scheduled for the end of 2019. Optimised development schedule allows to bring some of development costs forward installing parts of the processing plant fit for the Phase II 6ktpm run rate translating into marginal cost savings for the project (�1m from �20.1 to �19.1m); in addition, this may potentially accelerate the timing on a switch from Phase I to Phase II. We have revised our capex estimates, delayed Phase I production from H1/19 to H2/19, brought Phase II start forward to H2/21 (from H1/22) and adjusted out NAV estimates for �1m in new debt. We remain buyers of Scotgold Resources with a target price of 57p (from 58p). *SP Angel acts as Nomad and Broker to Scotgold Resources
RNS Number: 0718 R Scotgold Resources Ltd 26 February 2019 26 February 2019. Project Update on Cononish Gold and Silver Mine. Scotgold is pleased to update the market with regards to progress with development at its Cononish Gold and Silver Mine, near Tyndrum, Scotland..
RNS Number: 4357 O Scotgold Resources Ltd 29 January 2019 29 January 2019. The Company announces that it was notified on 29 January 2019 that Nathaniel le Roux, Non-Executive Chairman of the Company, acquired 40,000 ordinary shares of no par value each at a price of 36 pence per share.. RNS is approved by the Financial Conduct Authority to act as a Primary...
RNS Number: 7780 M Scotgold Resources Ltd 10 January 2019 Scotgold Resources Limited. Scotgold Resources Limited announces that 687 fully paid ordinary Scotgold shares have been issued on conversion of options exercisable at �0.40 on or before 31 December 2019.. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in...
Scotgold Resources Ltd (SGZ.L) Announced that it has received confirmation from the Loch Lomond and the Trossachs National Park Planning Authority that all of the 19 pre-start conditions and other obligations, relating the planning application 2017/0254/MIN. The company would like to thank the NPA, the consultees who have responded to the company's submissions and the many other stakeholders for their hard work and constructive input. Whilst the complexity of this process has resulted in an extended timeline, Cononish can now move forward into the development phase with a more thorough understanding of the issues of concern to the various parties.
Scotgold Resources* (SGZ LN) 35.5p, Mkt Cap �16.2m – Development starts today at the Cononish Gold mine in Scotland BUY, Target Price 58p • The company reports that it is starting development of the Cononish mine today. The start of the work follows the confirmation of planning consent by the Loch Lomond and Trossachs National Park Planning Authority which was announced in October and the subsequent satisfying of the conditions attached to the consent. • The company comments that it “can now move forward into the development phase with a more thorough understanding of the issues of concern to the various parties”. • Commenting on the move into development, Chief Executive, Richard Gray said that the company was “looking forward to a very exciting 2019, bringing the Cononish Project into production. We can now put our Implementation plans into action and anticipate the first rock breaking activities at the Cononish mine portal starting early in the New Year.” Conclusion: The move into development at Cononish is a milestone on what has been a long process to obtain consent to bring the mine to development. We look forward to further news as Scotgold advances the project towards production. SP Angel acts as Nomad and Broker to Scotgold Resources
RNS Number: 8708 K Scotgold Resources Ltd 19 December 2018. Cononish Gold and Silver Project. Initiation of Development on 19 th December 2018.
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