Shares in Scotgold Resources plummeted by more than a quarter after it confirmed it had raised £2.5 million from shareholders.
The placing of 6,250,000 new ordinary shares was a bargain at 40p per share, lower than the 58p price level before last close of trading.
The Scottish miner said its placing included fresh funding from seven directors worth £574,000.
It also plans to tap retail investors for a further £500,000 in a second capital-raising effort next week.
Despite difficulties, Scotgold aiming high
Last month the gold exploration and production firm, which operates the Cononish mine in the Loch Lomond and Trossachs National Park, said its working capital had been “adversely affected” by production difficulties.
The company confirmed it was “working on additional funding” to support the delivery of its 2023 plan for mining gold and silver at Cononish, near Tyndrum.
It set out it had a cash balance around £350,000 and net debt of £12.6m.
However it has ambitious targets for 2023.
The firm aims to ramp production up to 2,000 ounces of gold per month.
Full-year production guidance for 2023 has been set between 11,500 and 13,500oz.
The company’s gold production last year totalled 8,564oz.
First commercial producer of Scottish gold
Scotgold is the first commercial producer of Scottish gold. Some of its produce is used by two Scottish jewellers, Edinburgh-based Hamilton and Inches, and Sheila Fleet in Orkney.
Today it announced it had raised £2.5m gross proceeds through a placing of 6,250,000 new ordinary shares at 40p per share.
It added a separate announcement on the result of the retail offer will be released on 16 February.
Meanwhile, lender Nathaniel le Roux, through his firm Bridge Barn, also agreed to delay repayment of £2.5m owned to him by Scotgold this year by up to 9 months. Deferral would however increase the rate interest on the loan from 9% to 13%.
The Alternative Investment Market-listed firm’s shares closed down by nearly 26% in to 43p, nearer the discounted capital raising price.