15/01/2008 - 14:32

Scotgold closes up 20% on debut

15/01/2008 - 14:32

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Perth-based gold exploration company Scotgold Resources Ltd has made a positive debut on the Australian stock exchange today, after sucessfully raising $4.9 million via its November public offer.

Perth-based gold exploration company Scotgold Resources Ltd has made a positive debut on the Australian stock exchange today, after sucessfully raising $4.9 million via its November public offer.

Opening at 25.5 cents per share (or slightly above its 25 cent issue price) the stock traded as high as 45 cents per share - with over 400,000 shares being traded this morning. The stock closed at 30 cents per share, a 20 per cent premium to the issue price.

The company's initial public offer of 16 million shares at 25 cents each closed oversubscribed, raising $4.9 million.

Scotgold has acquired a highly advanced gold project in Scotland and is aiming to become the only significant gold miner in Scotland, following up on the Cononish deposit, 90 kilometres north of Glasgow, which was discovered by an Irish firm in 1984.

The spot gold price was $US909.10 at 1635 AEDT after hitting a 28-year high of $US914 overnight.

Full announcement pasted below:

Australian company Scotgold Resources to list on Tuesday and immediately fast-track plans to become Scotland's first gold producer Key points:
- Scotgold has successfully raised A$4.9M via an IPO launched in November 2007,
- The company will use the funds to pursue a number of advanced gold exploration targets in Scotland,
- Scotgold aims to become the only significant gold mining company in the country, and
- An initial review of historical data has been carried out, with drilling contracts expected to be signed shortly.

Perth-based gold exploration company Scotgold Resources Limited ("Scotgold") will step up plans of becoming Scotland's only significant gold mining company, after raising A$4.9M through its recently closed Initial Public Offer (IPO) and confirming that it will list on the Australian Securities Exchange at 9.30am (WST) this coming Tuesday 15 January 2008.

In November 2007 Scotgold launched a prospectus to raise A$4 million through the issue of 16,000,000 shares at A$0.25 each - with a further A$2 million able to be raised with oversubscriptions.

Montagu Stockbrokers was the Sponsoring Broker and Lead Manager to the issue.

On listing Scotgold will have 63.4M shares on issue and a market capitalisation of A$15.85M (at issue price).

Scotgold Non-Executive Chairman Mr Shane Sadleir said that, following the successful closure of the IPO, the company will now be working towards fast-tracking the establishment of a gold mine at its key project of Cononish in Western Scotland and becoming the only significant gold mining company in Scotland, a country not usually thought of for its mining prospects.

"We have been overwhelmed by the market's reaction to the IPO given it occurred so close to Christmas, but it is clear to us that people see the immense potential in our Scottish gold projects and our aggressive time-frame to get them into production."

"As a priority, Scotgold plans to undertake an assessment of the known gold and silver mineralisation at Cononish, 90km north of Glasgow, with the aim of determining a JORCcompliant resource in the first quarter of 2008," Mr Sadleir said.

"Much of the hard work has already been done for us, with the previous owners carrying out exploration on the project over some 15 years, including diamond drilling and the construction of a 1.2km tunnel along the vein, culminating with Planning Approval for a small mining operation of 25,000 ounces of gold per annum in 1996. A downturn in the gold price shortly after saw the project placed in care and maintenance for the next 10 years".

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