Scotgold Resources Limited, the Australia-based gold exploration firm focused on Scotland, said on Friday that some of its directors have undertaken to provide a short term loan of up to £2 million “to ensure the company has adequate funds available for working capital” through a production ramp up period.

Scotgold said it is continuing to review the mine plan for Cononish, Scotland’s first commercial gold mine, “the results of which will be announced as soon as it has been completed, which will in turn provide greater certainty about any potential working capital requirement beyond that provided by the director loan.”

The company also published results for the half year ended December 31, 2020, showing it made a loss before income tax of 2.3 million Australian dollars.

Scotgold shares trade on the London AIM market, where they have fallen almost 50% so far this year.

In a stock exchange statement, Scotgold said: “The company is pleased to note that the Cononish processing plant has continued to operate throughout April.

“As previously announced, reaching the point of commercial production has taken longer than planned, however the company is on track to make its first shipment of concentrate product expected to be made in the second week of May 2021 …

“As previously announced by the company on 27 April 2021, the recent delays to the production ramp-up have had and are expected to have a negative impact on the company’s cash position.

“To ensure the company has adequate funds available for working capital through this production ramp up period certain directors of the company, being Nathaniel le Roux,  William ‘Bill’ Styslinger, Peter Hetherington and Ian Proctor, together with an unrelated third party, have undertaken to provide a short term loan of up to £2m.

“The director loan has not yet been formally executed however, it is expected that this will be executed by end May 2021 at which point a further announcement will be made by the company.

“The company is continuing to review the mine plan for Cononish, the results of which will be announced as soon as it has been completed, which will in turn provide greater certainty about any potential working capital requirement beyond that provided by the director loan.”