(Alliance News) - Scotgold Resources Ltd on Tuesday posted a narrowed first half loss but warned it may not have enough funding to complete the development of its Cononish gold mine in Scotland.
For 2019, Scotgold's pretax loss narrowed to AUD1.3 million, about GBP619,919, from AUD2.1 million.
The absence of AUD1.3 million in pre-development costs incurred in 2018, contributed to the profit swing.
Scotgold said: "The principal activities of the consolidated entity during the year were the development of the Cononish gold and silver mine and mineral exploration."
The company on Friday said it will suspend production at Cononish, following government advice. First gold production at the site will be delayed beyond May 2020 as a result.
Development at the mine was already hurt by wet weather in the UK earlier in 2020.
Scotgold added: "This was further compounded by the impact of Covid-19. Acting upon advice from the Scottish government and in the interests of all its stakeholders, the company suspended all mining operations and placed the Cononish Mine on temporary care and maintenance.
"As the company does not know when it will be advised that full development activities can resume, it is not possible to be certain that the funding the company currently has available will be sufficient to complete the development and achieve positive operational cashflow."
Shares in the company were 8.8% lower at 41.50 pence each in London on Wednesday morning.
By Eric Cunha; ericcunha@alliancenews.com
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