Fox Williams advised AIM-listed Scotgold Resources Limited (“Scotgold”) on its £9 million placing, subscription and secured debt funding in relation to its investment in the Cononish gold mine in Tyndrum, Scotland. This follows Scotgold’s rights issue which completed in December 2017 raising gross proceeds of approximately £2.66 million on which Fox Williams also advised.
As part of transaction, which was announced on 18 May 2018, Scotgold raised approximately £4,000,000 before expenses through an oversubscribed placing and subscription of 14,545,455 new ordinary shares of no par value at a price of 27.5 pence per share, which was the closing mid-market price on 17 May 2018.
A secured loan facility of £5,000,000 was also agreed with Nathaniel (“Nat”) le Roux, Scotgold’s Non-Executive Chairman and substantial shareholder.
The placing and loan facility were related party transactions under the AIM Rules and the directors (other than Nat le Roux), having consulted with Scotgold’s nominated adviser SP Angel, considered that they were fair insofar as Scotgold shareholders were concerned.
Together with existing cash reserves, Scotgold believes it has sufficient funds to build the Cononish gold mine, execute a planned exploration programme and meet ongoing working capital needs. At full capacity, the Cononish mine is expected to produce on average approximately 23,500 equivalent ounces of gold per annum.
Head of Corporate Richie Clark led the Fox Williams team on the transaction, which comprised partner Paul Taylor, associate Bethany Silkin and paralegal Anjali Aravindhan.
David Swan, Scotgold CFO, said “We had been waiting for final Planning approval before we could raise our final tranche of mine development funding, which came in the combined form of secured debt and equity. Loan and security documents, somewhat complicated by the Scottish law on real property, were adapted, revised and turned around in double quick time. The placing was available only within a short timeframe window and required urgent action which Fox Williams provided. Whether we were talking with Paul, Bethany, Richie or Anjali, everyone was up to date on the stage of the transaction. Fox Williams were on top of all the complications, whether it was an issue related to debt security, related party transactions, subscription vs. placing letter, certificated vs. CREST, and finally the streamlining of an otherwise cumbersome announcement. Efficient and collaborative, a big thank you to each of you.”
Richie Clark said “It was a pleasure for the Fox Williams team to help Scotgold achieve the exciting milestone of securing the funding necessary to bring the Cononish gold mine into production. The deal highlighted our leading expertise in capital markets transactions in the natural resources sector.”