Mining firm Scotgold Resources finally plummets into administration

Scotgold Resources has finally gone into administration jeopardising more than 80 jobs, following months of uncertainty over the future of the firm behind Scotland's first commercial gold mine.

The firm, responsible for the Cononish mine near Tyndrum on the West Highland Way, announced in a stock exchange filing that its board on Friday November 24 appointed Daniel Bredenkamp and Christopher Pattinson of Australia-based Pitcher Partners Accountants and Advisors (WA) Pty as joint and several administrators. They say they have assumed control of the company and will work with the board during the administration period to “maximise the outcome for all stakeholders”.

The move comes after Scotgold said in early November that it expected to appoint administrators “over the coming days” after proposed funding from a strategic investor failed to bear fruit. It then said on November 22 that it was continuing to work with advisors, and expected to proceed with an administration process for SGZ Cononish “soon”. It added at the time: “In addition, Bridge Barn, who are the secured creditor over the assets of SGZ Cononish Limited have notified the company that they enforced their rights under the loan agreement signed on 17 May 2018. These include rights over the shares held by the company in SGZ Grampian Limited.

“SGZ Cononish Limited and SGZ Grampian Limited represent the only substantive assets of the Company and as such the board are also exploring the appointment of administrators in Australia over Scotgold Resources Limited.”

The firm, responsible for the Cononish mine near Tyndrum on the West Highland Way, has appointed administrators. Picture: contributed.

Scotgold had also in October raised the possibility of appointing administrators, coming after it did so in September when it issued its most stark warning yet regarding its future after suspending its shares from the stock market.

The firm in July and August of this year saw gold concentrate shipments total 235 tonnes with a sales value of £1.9 million. Scottish gold doré sales made to Scottish jewellery companies during those months totalled £46,160. Also in July, it said it had kicked off a third-party review of its operations after recent “disappointing” production results, while Phil Day had in June resigned as chief executive, citing a “desire to spend more time with his family members in Australia”.

In May, it said it had raised £2m, but stressed yet again that its ability to continue as a going concern was “entirely dependent” on the quantity of ore that produced henceforth, and in January 2022 had cheered record-breaking production figures.

Scotgold was founded as an Australian company in 2007, delisted from the Australian Securities Exchange in 2016, and listed on London’s Alternative Investment Market in 2010. Cononish’s gold deposits were discovered in the 1980s, pre-dating the 2002 launch of the Loch Lomond & The Trossachs National Park in which they are located, and Scotgold’s mine there went into initial production in May 2016.

Scotgold’s then-boss Richard Gray in 2018 said the firm was even eyeing more sites: “Now we’re getting one off the ground we’re very excited about the opportunities [to] start investing more and doing some more exploration and finding where the next projects going to come from.”