Happy New Year everyone, hope you all had a good Christmas and enjoyed the break.
We will all know before long how we are to be funded.
Funding Our chairman "John Bentley who also chairs Scottish oil explorer Faroe Petroleum, is confident the funding – some £12m of debt and up to £15m of equity – will be raised". What's Faroe Petroleum got to do with it ? Different industry, completely different companies in many many ways , John Bentley is the chairman of SGZ & FPM ( Faroe ) FPM has a £110 Million Finance Facility . John Bentley stepped up to Executive chairman in January 18th 2012 to deal with planning and financing, he certainly has a good track record and has over 40 years experience. RMB finance was announced on 2nd July 2012 for up to 50% of funding. Our recent drilling programme at Cononish was a huge success moving 27,600 ounces of Gold from inferred to indicated,increasing the tonnage and the grade and the resource, much more than SGZ & RMB had envisaged, see chairmans letter to shareholders on 30/08/12. From chairmans letter; "Since receiving planning approval we have been concentrating on increasing the confidence level in the gold and silver resource through infill drilling of the Cononish ore body. Specifically, the intention is to convert a further 10,000 ounces from inferred to measured and indicated resources in order to provide greater debt capacity thereby limiting the level of equity financing which must be undertaken to provide development funding."
The big question is how much will come from RMB ? Given the success of the Cononish infill drilling with results as high as 27.43g/t Au over 2.6m , 27.21g/t Au over 3.3m , 22.47g/t Au over 2.4m true widths. Given that the hope was for 10,000 ounces to be moved to provide up to 50% of the required funding. How much will the funding be increased to with the 27,600 ounce increase ? How much of our funding will be from Mezzanine finance? How much dilution will we have if any ? Questions that we all wish we new the answers to. Could we have a better men in charge ? Not in my opinion. Will we get more than 50% from RMB , in my opinion yes , will we have mezzanine finance , in my opinion yes . How much will we get ? Best guess and hope ; RMB £ 12-15M , mezzanine £ 8-12M , dilution will be kept to a minimum and thats the hope part.
My views on Scotgolds management and staff and prospects are no secret and I have every confidence in all of them. We where refused planning permission in 2010, which was only indicated to the company by the NP two weeks before the vote, the company re applied and came through as predicted in October 2011, with the vote being 17 - 0 in favour . Our resource at Cononish was mainly inferred and the company continually said there was scope for upgrade, look what happened with that, as predicted. I might be pushing the boat out and blowing out my rear end again but I do hope for all our sakes that it will be 3 out of 3 predictions with funding and then on to 4 from 4 with the additional resource in and around Cononish and then 5 from 5 with other finds close to Cononish.
Our Geologists have a regional model of our prospects which I have viewed on visits to the office and the mine on several occasions over the years. They where correct about the resource at Cononish and will probably be correct about the possible additional resource in and around Cononish, the River vein prospect has high grade Gold and Moly as thought and Sron Garbh could be that Elephant in the room.
Update The infill drilling at Cononish is now complete and the results from the last 5 holes could be with us by late February , early March. The drill rig has spent the year on Cononish and will probably undergo a good service before being moved to its next location. We should have results soon from the Aq drilling at our other prospects. Lots to look forward to in the coming months with , updated study results , funding news, drill results and back to exploring our highly prospective projects.
Hopefully we will all be proved to be clever this year, and in the coming years to be even more so.
[email protected] for any newbies wanting to view pictures of our mine and our prospects, drill rigs etc. GLA , DYOR.
SGZ Price at posting:
3.7¢ Sentiment: LT Buy Disclosure: Held
