TIDMSGZ
RNS Number : 5366S
Scotgold Resources Ltd
13 September 2010
13 September 2010
Scotgold Resources Limited ("Scotgold" or the "Company")
Preliminary Financial Report
for the Year Ended 30 June 2010
Scotgold is a gold exploration and development company with projects located in
the Grampian region of central Scotland. The Cononish gold and silver deposit
forms the core economic basis of the Company's Grampian Project.
Highlights:
· Snowden update: new drilling and review of data lead to an increased
resource estimate for the Cononish gold and silver project. Total metal
inventory now stands at 163,000oz Au and 596,000 oz Ag
· Infill and extension drilling (at the eastern extension) at Cononish
continues to return encouraging values
· Breccia hosted gold and silver mineralisation discovered at Beinn Udlaidh
and exploration target defined
· Encouraging results from vein systems at Beinn Udlaidh and Auch
Post balance sheet event:
· On 18 August 2010 the Company advised that the Loch Lomond and The
Trossachs National Parks Board had voted to refuse the Company's application for
planning permission for the establishment of the proposed gold and silver mine
at Cononish
· The Company is considering its options to advance the project which may
include appeal to the Scottish Ministers.
Chris Sangster, Scotgold's Chief Executive, commented:
"The Company is disappointed at the decision by the Parks Board given the high
degree of interaction throughout the planning process and the very narrow final
majority. Scotgold is currently considering its options in order to further
progress Cononish.
"Exploration continues at our prospects outside the boundaries of the National
Park with highly encouraging results."
For further information:
United Kingdom:
+---------------------+---------------------+-------------------------+
| Scotgold Resources | Westhouse | Bankside Consultants |
| Limited | Securities Limited | |
+---------------------+---------------------+-------------------------+
| Chris Sangster | Richard Baty / | Simon Rothschild / |
| (CEO) | Petre Norton | Oliver Winters |
+---------------------+---------------------+-------------------------+
| Tel: +44 | Tel: +44 | Tel: +44 (0)20 |
| (0)1838 400 306 | (0)20 7601 6100 | 7367 8888 |
+---------------------+---------------------+-------------------------+
Australia:
+---------------------+---------------------+
| Scotgold Resources | Professional Public |
| Limited | Relations |
+---------------------+---------------------+
| Shane Sadleir | Karen Oswald |
| (Non-Executive | |
| Director) | |
+---------------------+---------------------+
| Tel: +61 | Tel: +61 |
| (8) 9428 2950 | (8) 9388 0944 |
| Mobile: +61 (0) 411 | Mobile: +61 (0) |
| 704 498 | 423 602 353 |
+---------------------+---------------------+
Review of Operations
CONONISH GOLD AND SILVER PROJECT PROGRESS
RESOURCES AND EXPLORATION
In May 2008, Scotgold released the first Mineral Resource Statement on the
Cononish gold-silver deposit reported in accordance with the JORC code, prepared
by Snowden Mining Industry Consultants ("Snowden"). The Measured, Indicated and
Inferred Mineral Resource categories totalled 154,000 ounces of gold and 589,000
ounces of silver (using 3.5 g/t gold cut-off).
Snowden subsequently noted "based on our experience of the Cononish vein system,
we believe that there is an Exploration Target around the mine of between 0.5 Mt
to 1.0 Mt at a grade of between 10 g/t Au to 15 g/t Au for up to 320,000 oz Au.
Much of this potential is based on the along strike and down dip extensions of
the Cononish vein, but there are indications that other reefs are present in the
area too. At this stage, such figures are highly conceptual and there is no
guarantee that further exploration will define additional resources."
During 2009, the Company identified extensive additional, high grade gold
mineralisation in and around the Cononish gold and silver project, following a
thorough search of historic data generated by previous exploration companies.
The zones of mineralisation lay outside the envelope of the project's current
JORC Resources and included:
· 30.5 g/t Au and 22.9 g/t Ag (weighted average) in a 1.59 m quartz vein
exposed over 12 metres within existing adit,
· 73.1 g/t Au over 1.77 metres in quartz vein intersected in diamond
drilling,
· 16.1 g/t Au over 2.1 m in trench in quartz vein at surface, and
· 55 g/t Au in grab sample of quartz vein at surface.
As a result of these further investigations and exploration by Scotgold during
2008 - 2009, Snowden was asked in late 2009 to undertake an update on the
Cononish resource.
The revised resource for Cononish is shown below.
Cononish Main Vein Gold Mineral Resources (reported at a 3.5 g/t Au cut-off).
Reported using the 2004 JORC Code (JORC, 2004). Tonnages and contained ounces
rounded to the nearest 1,000 t or 1,000 oz. Grade rounded to the nearest 0.1 g/t
Au. The Inferred Resource grade is reported with a grade range to indicate the
likely upside due to the information effect.
+----------------+----------+----------+----------+
| Classification | Tonnes | Grade | Ounces |
| | (t) | (g/t) | (oz) |
| | | Gold | Gold |
+----------------+----------+----------+----------+
| Measured | 53,000 | 17.9 | 31,000 |
+----------------+----------+----------+----------+
| Indicated | 73,000 | 10.2 | 24,000 |
+----------------+----------+----------+----------+
| Inferred | 311,000 | 10.8 | 108,000 |
| | | (10-16) | |
+----------------+----------+----------+----------+
Scotgold Note:Incorporating the grade range, the Inferred Mineral Resource
is estimated to lie between 100,000 oz Au and 160,000 oz Au. It should be noted
that any upside may not exist or it may only be present in a portion of the
resource.
Cononish Main Vein Silver Mineral Resources (reported at a 3.5 g/t Au cut-off).
Reported using the 2004 JORC Code (JORC, 2004). Tonnages and contained ounces
rounded to the nearest 1,000 t or 1,000 oz.
+----------------+----------+----------+----------+
| Classification | Tonnes | Grade | Ounces |
| | (t) | (g/t) | (oz) |
| | | Silver | Silver |
+----------------+----------+----------+----------+
| Measured | 53,000 | 75.0 | 128,000 |
+----------------+----------+----------+----------+
| Indicated | 73,000 | 43.1 | 101,000 |
+----------------+----------+----------+----------+
| Inferred | 285,000 | 40.1 | 367,000 |
+----------------+----------+----------+----------+
This update gives a total metal inventory of 163,000 oz Au and 596,000 oz Ag.
Snowden notes that there is resource potential in the eastern adit zone and that
the estimation of additional Mineral Resources are likely once further drilling
is complete.
Scotgold resumed drilling at the Cononish gold and silver project in Scotland in
October 2009. The objectives of the program were to:
· infill a portion of the existing Inferred Mineral Resource at Cononish as
a part of the Company's ongoing program to advance the project to production;
and
· test high grade gold targets which lie within the recently identified
eastern extension of the Cononish mineralisation and outside the envelope of
the previously existing Mineral Resource.
The drilling program also targeted mineralisation outside the previously defined
resource envelope, specifically the potential down dip continuation of the
mineralisation encountered in trenches (up to 16.12 g/t Au over 2.10 metres)
surface drill holes (up to 73.10 g/t Au over 1.77 metres) and underground holes
(up to 12.35 g/t Au over 1.49 metres).
A program of short AQ size diamond drill holes was also planned from within the
Cononish adit to test for possible extensions to the identified mineralisation
in the eastern part of the adit outside the existing resource, in particular a
1.6 metre-wide quartz vein where high grades (up to 119.9 g/t gold and 97.2g/t
silver) have been reported from historic assays and also possible 'off adit'
intersections on the Cononish vein.
The first phase of the program was completed recently and results are shown in
Tables 1 and 2 below:
Table 1 Infill Drilling Results
+-----------+---------+--------+--------------+-----------+-------+------+--------------------+
| Hole | From(m) | To | Downhole | Est. | Au | Ag | Comment |
| | | (m) | intersection | true | g/t | g/t | |
| | | | (m) | thickness | | | |
| | | | | (m) | | | |
+-----------+---------+--------+--------------+-----------+-------+------+--------------------+
| Con 09 | 103.95 | 106.00 | 2.05 | 1.98 | 9.84 | 41.6 | Main vein |
| 01 | | | | | | | intersection |
+-----------+---------+--------+--------------+-----------+-------+------+--------------------+
| Con 10 | 103.00 | 104.50 | 1.50 | 1.41 | 15.82 | 52.5 | Main vein |
| 02 | | | | | | | intersection |
+-----------+---------+--------+--------------+-----------+-------+------+--------------------+
| Con 10 | 126.90 | 127.25 | 0.35 | 0.31 | 0.39 | 42.4 | Main vein Sheared, |
| 02a | | | | | | | dyke |
+-----------+---------+--------+--------------+-----------+-------+------+--------------------+
| Con 10 | 67.24 | 83.75 | 11.04 | 6.16 | 5.09 | 22.8 | Mineralised |
| 05 | | | | | | | intersection |
+-----------+---------+--------+--------------+-----------+-------+------+--------------------+
| Including | 66.24 | 70.46 | 4.22 | 2.35 | 2.55 | 7.2 | Upper vein |
+-----------+---------+--------+--------------+-----------+-------+------+--------------------+
| And | 79.15 | 83.00 | 3.85 | 2.15 | 14.82 | 55.5 | Main vein |
| | | | | | | | intersection |
+-----------+---------+--------+--------------+-----------+-------+------+--------------------+
The drilling into the main vein within the Inferred Resource zone above the 400
level continues to encounter high grades and excellent widths of gold and silver
mineralisation in most cases.
Table 2 Eastern Extension Results
+--------+-------+--------+--------------+-----------+-------+------+--------------------+
| Hole | From | To | Downhole | Est. | Au | Ag | Comment |
| | (m) | (m) | intersection | true | g/t | g/t | |
| | | | (m) | thickness | | | |
| | | | | (m) | | | |
+--------+-------+--------+--------------+-----------+-------+------+--------------------+
| EA 01 | 49.30 | 51.60 | 2.30 | 1.99 | 2.68 | 1.8 | Main vein |
| | | | | | | | intersection |
+--------+-------+--------+--------------+-----------+-------+------+--------------------+
| | 60.40 | 64.00 | 3.60 | 2.25 | 7.84 | 12.2 | |
+--------+-------+--------+--------------+-----------+-------+------+--------------------+
| EA 03 | 60.40 | 60.65 | 0.25 | 0.18 | 28.35 | 16.6 | Main vein |
| inc. | | | | | | | intersection |
+--------+-------+--------+--------------+-----------+-------+------+--------------------+
| | 63.00 | 64.00 | 1.00 | 0.72 | 15.67 | 33.8 | |
+--------+-------+--------+--------------+-----------+-------+------+--------------------+
| EA 03 | 46.73 | 47.30 | 0.57 | 0.52 | 3.67 | 4.8 | Main vein |
| | | | | | | | intersection |
+--------+-------+--------+--------------+-----------+-------+------+--------------------+
| EA 04 | 62.80 | 65.00 | 2.20 | 1.58 | 0.94 | 1.4 | Out of payshoot? |
+--------+-------+--------+--------------+-----------+-------+------+--------------------+
| EA 05 | 112.6 | 113.15 | 0.55 | 0.25 | 0.54 | 0.5 | Out of payshoot? |
+--------+-------+--------+--------------+-----------+-------+------+--------------------+
| EA 06 | 74.92 | 76.00 | 1.08 | 0.68 | 1.24 | <0.5 | Out of payshoot? |
+--------+-------+--------+--------------+-----------+-------+------+--------------------+
| EA UG | 2.50 | 3.00 | 0.50 | | 5.16 | 3.4 | 'Adit' vein |
| 03 | | | | | | | |
+--------+-------+--------+--------------+-----------+-------+------+--------------------+
| EA UG | 0.50 | 1.00 | 0.50 | | 7.50 | 5.4 | 'Adit' vein |
| 02 | | | | | | | |
+--------+-------+--------+--------------+-----------+-------+------+--------------------+
Results from the eastern extension indicate a westerly plunging payshoot
extending over 300 metres beyond the eastern boundary of the previously defined
JORC resource, delineated by surface holes EA 01, 02 and 03, underneath the
recently announced extension of the resource to the east. Further drilling to
define this area is hampered by extreme topography and will be followed up by
underground drilling during mine development.
Underground holes EA UG 03 and 02 were drilled to test the possible extension of
the high grade vein ( the 'adit' vein) encountered in the adit. The results
indicate vein continuity with encouraging values and warrants further
investigation at a later stage.
Scotgold believes that there is potential to define further resources close to
the Cononish mine, subject to appropriate studies. The extensive gold-in-soil
anomalies, mineralisation associated with outcrops and trenching and the large,
unexplained geophysical anomaly clearly warrants further follow-up.
PLANNING
The Cononish gold and silver project was granted planning permission in 1996 for
the establishment of an underground mine, processing facility, tailings
management facility and associated infrastructure. The permission was valid for
ten years from the commencement of the development (deemed to have started in
April 1997).
In April 2007, prior to expiry of the permission, Scotgold submitted an
application for extension. Since April 2007, the Company has been engaged in
work to update the technical aspects of the proposed development and assess
their impacts in relation to new legislation and land designation relating to
the site.
Since April 2007, Scotgold held a number of meetings with the Planning Authority
(Loch Lomond and The Trossachs National Park Authority) and in July 2009
submitted a 'scoping document' to the Planning Authority as commencement of the
Planning Application process.
As part of the 'pre-application consultation' process under Scottish planning
law, the Company subsequently held three 'public' meetings. A presentation was
made to the local Community Council and Strathfillan Community Development Trust
and two public 'open days' were held in Tyndrum, which is the nearest town to
the proposed mine.
A substantial proportion of the community attended the open days and public
support for the project has been most encouraging. This support has been
reflected in reporting on the Cononish project by the mainstream UK news media
over recent months.
Scotgold lodged their application for revision and extension to their existing
planning permission on 25 January 2010. The application was subsequently
validated and the parties signed a non-legally binding processing agreement
which indicated a decision date of 7 June 2010, with final notices due to be
issued shortly thereafter.
The application was prepared with the assistance of Scotgold's planning and
environmental consultants, Dalgleish Associates. Dalgleish Associates is a well
established consultancy based in Scotland, specialising in resource (minerals
and renewable energy) projects in the United Kingdom with considerable expertise
in the Scottish system.
Specialised technical input regarding the application was provided by Scotgold's
tailings consultants AMEC Earth and Environmental (UK), Cantab Consulting (as
competent person for 'sign off' of the tailings management facility), Vibrock
Ltd (ground vibration and noise consultants) and Rathmell (archaeological
studies).
The application envisages a development along the same scales as previously
proposed, including the establishment of an underground mine with associated
processing and tailings management facilities and infrastructure associated with
the project and concurrent restoration of the site.
Scotgold believes the application contains many improvements to the previously
permitted development and is in line with currently accepted 'best practice'.
In response to EU Directive 2006/21/EC regarding the management of waste from
extractive industries (and subsequent to Scotgold's application), the Scottish
Government adopted the Management of Extractive Waste (Scotland) Regulations
2010 and issued draft guidance documents on the application of these
regulations. The guidelines require the submission of a 'Waste Management Plan'
and for it to be notified publicly by the Planning Authority.
In addition, responses to the application were received from statutory
consultees including Scottish Natural Heritage and Scottish Environmental
Protection Agency, who indicated 'holding' objections pending provision of
further information and clarification on a number of issues. The Planning
Authority also requested clarification and further information regarding certain
aspects of the application, notably in relation to the socio-economic impacts of
the development.
A number of meetings were held with the relevant bodies in order to provide such
information and clarification. The Company submitted the further requisite
documentation relating to all requests for further information and clarification
to the Planning Authority on 7th June.
Under the Town and Country Planning Act (Scotland) 1997 and the Environmental
Impact Assessment (Scotland) Regulations 1999, it was deemed that this further
documentation, in addition to the Waste Management Plan, was required to be
re-advertised for a period of 28 days.
On 18 August 2010 the Company advised that the Loch Lomond and The Trossachs
National Parks Board had voted to refuse the Company's application for planning
permission for the establishment of the proposed gold and silver mine at
Cononish.
At the date of this report the company is considering its options in relation to
this refusal but is likely to appeal to the Scottish Ministers. Any appeal would
need to be lodged within three months and Scotgold will make a further release
to advise its intentions.
Scotgold is extremely disappointed at the decision, given the ongoing
interaction with the Parks Board over a substantial time frame though are
encouraged that the decision was by a very narrow majority. It is considered
that the proposal has significant merit in the local, regional and national
context and the proposed development would have minimal environmental impact.
Scotgold remains committed to exploration at its other prospects located outside
the National Park's boundaries (85% of our current license areas are outside the
National Park) at Beinn Udlaidh and other areas.
A copy of Scotgold's representation, which was made to the Loch Lomond and The
Trossachs National Parks Board prior to the vote, is available at the Company's
website.
STUDY UPDATE
In June 2010, Scotgold commissioned Australian Mining Consultants (AMC) to
update critical components of the Cononish Scoping study.
The study will enable the Company to finalise development options for the
project leading to a production decision. Subject to certain project milestones
including planning permission and financing for the project, Scotgold
anticipates first gold production in late 2011.
AMC will review and update the mining development and production schedule and
capital and operating costs (with a target +/-15% accuracy) based on recent
additions to the resource at Cononish (see ASX Release 5th February 2010 -
Cononish Drilling and JORC Update).
A summary from the 2009 AMC scoping study can be found on the companys
website
www.scotgoldresources.com/assets/pdf/asx/Scoping_Study_feb09.pdf -
Cononish Scoping Study confirms economic viability - 17th February 2009). The
study estimated annualised production of 21,000 ozs of gold and 80,000 ozs of
silver for a six and a half year production life. Returns using the then spot
price of gold (GBP662 / oz) gave an NPV of GBP25.6M and an IRR of 74%. Operating
costs were estimated to be GBP229 /oz.
In conjunction with the study update, following a detailed metallurgical
testwork programme conducted at AMMTEC Laboratories in Perth (Australia),
Scotgold commissioned Gekko Systems Pty Ltd (Gekko) to complete a Definitive
Costing Study (+/- 10% accuracy) for the Cononish project processing plant.
Scotgold recently completed a further phase of metallurgical testwork to
optimize and finalise the plant flowsheet. The testwork examined various
combinations of flotation and gravity / flotation circuits to maximise gold
recovery to 'free gold' (recovered on site) and overall recovery. All testwork
indicated a high amenability to the proposed flowsheet arrangements with
recoveries from all testwork in excess of 90% for gold.
Discussions with Gekko and Scotgold's metallurgical consultant finalised the
flowsheet for the purposes of the study.
The flowsheet encompasses two stage crushing, milling followed by a gravity
recovery section and subsequent flotation. Concentrates from both the gravity
and flotation process will be combined and reground to maximize recovery of
'free gold' and to reduce the mass of concentrate required to be transported for
further processing.
A final sample is being processed to confirm recoveries to be used in the AMC
study.
As part of the planning application, AMEC Earth and Environmental (AMEC)
completed a feasibility level design for the Tailings Management Facility for
the Cononish project. The design provides for a facility to retain 0.8Mt of
tailings to cater for possible future extensions to resources at Cononish and is
designed in accordance with all applicable EU and UK legislation.
GRAMPIAN GOLD PROJECT PROGRESS
REGIONAL EXPLORATION
When Scotgold acquired the Cononish Gold and Silver Project and the greater
Grampian Gold Project area in 2007, the Company also obtained a large volume of
paper-based historic exploration data generated by previous exploration
companies and this data has now been captured electronically into a Geographic
Information System (GIS) database.
The Scotgold GIS database includes a broad range of exploration data consisting
of rock and soil sample geochemistry, induced polarization (IP), very low
frequency (VLF), magnetic and gravity geophysical data, digital geology, mineral
occurrences and other data which can be viewed in conjunction with topographic
and cartographic information (contours, towns, roads, property boundaries etc).
Specific historical data captured for the Grampian Gold Project GIS includes:
· 3,189 rock chip samples (boulder and outcrop)
· 11,459 soil samples (surface and deep overburden)
· 1,923 stream sediment samples
· 2,184 geophysical data points
Most of the historic data is centred around the town of Tyndrum and it extends
over an area of 7 km by 37 km, along the Tyndrum Glen Fyne Fault.
A distinction is made between rock chips derived from outcrop and those from
boulders which may be some distance from their source. Glacial deposits are
known to occur in the area, which have the potential to transport boulders over
large distances.
Scotgold's preliminary analysis of the historic data indicates that there are
many high grade outcrop and boulder samples within the Company's licence areas,
as shown in the table below:
+--------------------+------------+------------+
| Grade category | Number of | Number of |
| | outcrop | boulder |
| | samples | samples |
+--------------------+------------+------------+
| Samples greater | 3 | 10 |
| than 100 g/t gold | | |
+--------------------+------------+------------+
| Samples greater | 35 | 79 |
| than 10 g/t gold | | |
+--------------------+------------+------------+
| Samples greater | 95 | 166 |
| than 1 g/t gold | | |
+--------------------+------------+------------+
Scotgold subsequently embarked on a comprehensive follow up program to validate
this data and to further extend the coverage over other parts of the Grampian
Gold Project, including an extensive rock chip and mapping program in the field.
Amongst the highlights of the verification program were high grade outcrops
identified at Halladay's Vein (217.2 and 196.8 g/t gold and > 200 g/t silver)
and Coire nan Sionnach (51.2 g/t gold and 14.4 g/t silver).
The results of the program show little difference between the gold and silver
assays of the 367 new outcrop samples recently collected when compared to their
equivalent datasets within the historic database, thus confirming its
reliability for use in regional exploration by Scotgold.
The frequency of high grade outcrops in the new and historic datasets, and their
alignment with regional structural features, are similar to that at the Cononish
Project. This pattern supports Scotgold's contention that its Grampian Gold
Project has the potential to host a number of other 'Cononish style' gold
deposits, in addition to other styles of mineralization such as the breccia
pipes at Beinn Udlaidh.
Table 3 shows an overall comparison of the 2009 outcrop rock chip sampling
results with the equivalent historic database data. The data indicates that
there is no overall difference between the new and old datasets.
+--------------------+------------+------------+
| Grade category | Historic | Scotgold |
| | Data | Data |
| | No. of | No. of |
| | outcrop | outcrop |
| | samples | samples |
| | (%) | (%) |
+--------------------+------------+------------+
| Total samples | 728 | 367 |
+--------------------+------------+------------+
| Samples greater | 3 (0.4%) | 2 (0.5%) |
| than 100 g/t gold | | |
+--------------------+------------+------------+
| Samples greater | 55 (7.5%) | 17 (6.1%) |
| than 5 g/t gold | | |
+--------------------+------------+------------+
| Samples greater | 72 (9.9%) | 47 (10.3%) |
| than 1 g/t gold | | |
+--------------------+------------+------------+
The results provide confirmation of the significant number of high grade outcrop
gold values and the prospectivity of the 250 km² "principal zone of interest"
which surrounds the Cononish Gold and Silver deposit.
From the historical database, follow up verification sampling and ongoing
exploration initiatives, Scotgold identified a number of priority targets for
follow up including
· Beinn Udlaidh breccia hosted mineralistion
· Beinn Udlaidh Au Vein
· Auch vein systems
· 'Near Cononish' targets - Kilbridge, Coire nan Sionnach and Halladays
vein
BEINN UDLAIDH PROSPECT
BRECCIA HOSTED GOLD SILVER MINERALSIATION
In September 2009, Scotgold identified significant breccia-hosted gold-silver
mineralization at the Beinn Udlaidh prospect in association with a lamprophyre
field. The prospect is located five kilometers north northwest of the high grade
Cononish Gold and Silver Deposit, highlighting the potential of Beinn Udlaidh
prospect to host a large additional gold/silver resource.
Multiple breccia bodies have been mapped in the Beinn Udlaidh prospect area.
Previous exploration at Beinn Udlaidh had recorded high grade gold and silver
values (up to 359 g/t Au and 2,520 g/t Ag) from float samples.
Initially, Scotgold has drilled a single, short, 12 metre-deep drill hole
(BEBULB1) into one of the breccia bodies (BU1) to test its potential to host
economic gold-silver mineralization.
The entire length of BEBULB1 was mineralized (>0.1 g/t gold) averaging 12 metres
@ 1.45 g/t gold and 8.9 g/t silver. Higher grade results (>0.5 g/t gold) from
the drill hole include:
BEBULB1 1.5 metres @ 2.90g/t gold and 20.2g/t silver from 1.5
metres
2.0 metres @ 2.65g/t gold and 13.6g/t silver from 4 metres
0.5 metres @ 12.3g/t gold and 78.7g/t silver from 9.5 metres
Scotgold considered the initial results are extremely encouraging, given the
limited drilling and the number of other breccia bodies which have had no drill
testing. BEBULB1 was drilled by Scotgold's man-portable AQ diamond core drill
rig which has a limited penetration depth.
Breccia-hosted, precious metal deposits occur throughout the world and are known
to host very large resources. Examples in Australia are Kidston (4.5 M oz gold),
Mt Leyshon (3.5 M oz gold) and Mt Wright (1 M oz gold) all of which are located
in North Queensland. Examples in North America are Golden Sunlight in Wyoming
(3.8 M oz gold) and Cripple Creek in Colorado (21 M oz gold) which are
associated with lamprophyre fields.
The breccia bodies at Beinn Udlaidh are spatially associated with lamprophyre
intrusions which are also commonly observed in many world class goldfields e.g.
Yilgarn Block, W.A.; Carlin Trend, Nevada; Superior Province, Canada.
Scotgold undertook a further drilling programme during the last quarter of 2009
to test a number of the identified breccia pipes, a further seven short AQ holes
into six of the nineteen breccia pipes identified to date. Assay results are
shown in Table 4. The initial 'discovery hole' BEBULB1 into pipe BU1 is also
included for reference.
+--------------+------+------+------+-------+------+------+------+-------+------+-------+------+------+-------+------+-------+-------+
| Au g/t | Pipe | Pipe | Pipe | Pipe | Pipe | Pipe | Pipe | Pipe |
| | BU | BU | BU | BU | BU | BU | BU | BU |
| | 01 | 20 | 15 | 05 | 16 | 11 | 11 | 01 |
+--------------+-------------+--------------+-------------+--------------+--------------+-------------+--------------+---------------+
| | BU | BU | BU | BU | BU | BU | BU | Ben |
| | AQ | AQ | AQ | AQ | AQ | AQ | AQ | UL |
| | 10 | 11 | 15 | 05 | 13 | 11-2 | 11-1 | B |
+--------------+-------------+--------------+-------------+--------------+--------------+-------------+--------------+---------------+
| Whole | 0.21 | 1.31 | 0.28 | 1.30 | 0.12 | 0.34 | 0.13 | 0.221 | 0.09 | 3.47 | 0.07 | 0.08 | 0.02 | 0.05 | 1.45 | 8.91 |
| intersection | | | | | | | | | | | | | | | | |
+--------------+------+------+------+-------+------+------+------+-------+------+-------+------+------+-------+------+-------+-------+
| Over (m) | 17 | 16 | 16.5 | 16 | 16 | 15.5 | 15.5 | 12 |
+--------------+-------------+--------------+-------------+--------------+--------------+-------------+--------------+---------------+
| Selected | 0.26 | 1.59 | 0.52 | 2.60 | 0.20 | 0.64 | 0.21 | 0.45 | 0.20 | 10.49 | 0.28 | 0.32 | 0.07 | 0.25 | 1.45 | 8.91 |
+--------------+------+------+------+-------+------+------+------+-------+------+-------+------+------+-------+------+-------+-------+
| Over (m) | 14 | 8 | 7.5 | 8 | 5 | 3 | 3 | 12 |
+--------------+-------------+--------------+-------------+--------------+--------------+-------------+--------------+---------------+
| Best | 1.50 | 8.38 | 6.99 | 40.24 | 0.55 | 1.24 | 1.03 | <0.5 | 1.28 | 49.75 | 1.06 | 1.90 | 0.15 | 0.50 | 12.31 | 78.66 |
+--------------+------+------+------+-------+------+------+------+-------+------+-------+------+------+-------+------+-------+-------+
| Over (m) | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 |
+--------------+-------------+--------------+-------------+--------------+--------------+-------------+--------------+---------------+
| Samples | 34 | 32 | 33 | 32 | 32 | 31 | 31 | 24 |
+--------------+-------------+--------------+-------------+--------------+--------------+-------------+--------------+---------------+
| No | 23 | 5 | 11 | 13 | 5 | 4 | 2 | 20 |
| samples | | | | | | | | |
| >0.1g/t | | | | | | | | |
| Au | | | | | | | | |
+--------------+-------------+--------------+-------------+--------------+--------------+-------------+--------------+---------------+
| % age | 68% | 16% | 33% | 41% | 16% | 13% | 6% | 83% |
| anomalous | | | | | | | | |
| (+0.1g/t | | | | | | | | |
| Au) | | | | | | | | |
+--------------+-------------+--------------+-------------+--------------+--------------+-------------+--------------+---------------+
| No | 1 | 1 | 0 | 1 | 1 | 1 | 0 | 7 |
| samples | | | | | | | | |
| >1.0g/t | | | | | | | | |
| Au | | | | | | | | |
+--------------+-------------+--------------+-------------+--------------+--------------+-------------+--------------+---------------+
| Comment | Last | | | | Hole | | Predom. | 'Discovery |
| | 3m | | | | collared | | lamprophyre | Hole' |
| | in | | | | in | | | |
| |lamprophyre | | | | psammite | | | |
+--------------+------+------+------+-------+------+------+------+-------+------+-------+------+------+-------+------+-------+-------+
Table 4: Summary and analysis of recent AQ drilling results at Beinn Udlaidh
Scotgold considered the high number of anomalous values (>0.1g/t Au) in five of
the subsequent holes within the short (in relation to pipe size) interval
sampled to be highly encouraging especially given the high grade rock and
boulders samples discovered nearby (up to 359 g/t gold and 2,520 g/t silver),
the limited drilling and the number of other breccia bodies in the area which
have had no drill testing or sampling,.
As a result, Scotgold confirmed an Exploration Target at Beinn Udlaidh of
between 0.57 and 5.7 Mt at a grade of between 1 and 2 g/t Au.
Limited drilling to date at the Beinn Udlaidh breccia pipefield has confirmed
anomalous gold grades. Economic gold grades encountered in breccia hosted
mineralisation may lie in the range of 1.0g/t to 2.0g/t based on similar style
occurrences elsewhere in the world. Breccia hosted mineralisation may show
zonation and include higher grade zones.
The basis for the tonnage potential is the current mapped area of individual
pipe outcrops to a depth of between 10m (observed / drilled) to 100m, using a
specific gravity of 2.65 and a 'complexity factor' of 70%. It is noted that
breccia pipes can extend to depths greater than 100m.
It should be noted that the potential quantity and grade of the Exploration
Target is conceptual in nature, there has been insufficient exploration to
define a Mineral Resource and it is uncertain if further exploration will result
in the determination of a Mineral Resource.
An extensive program of field mapping, litho-geochemical characterisation
sampling and halnd held geophysics, additional AQ drilling and initial NQ
drilling is planned for the continuing 2010 field season.
BEINN UDLAIDH Au VEIN
Previous explorers had also identified a 900 metre long mineralized vein
structure (i.e. Beinn Udlaidh Gold Vein) which is located one to two kilometres
east and south of the mapped breccias and a number of diamond core holes were
drilled into this structure in 1989 to a vertical depth of approximately 100
metres. The drilling intersected gold and silver mineralization over 500 metres
strike, with better results including:
GO 88-01 2.57 metres @ 3.8 g/t gold and 221 g/t silver from 51.97
metres
GO 88-04 1.02 metres @ 2.9 g/t gold and 109 g/t silver from
104.73 metres
GO 88-05 1.47 metres @ 3.3 g/t gold and 21 g/t silver from 102.54
metres
GO 88-09 1.56 metres @ 1.2 g/t gold and 36 g/t silver from 123.30
metres
GO 88-11 0.53 metres @ 2.2 g/t gold and 95 g/t silver from 60.97
metres
Scotgold drilled three 13 to 20 metre-deep, diamond cores holes into the
structure to check previous results. All 3 holes intersected significant gold
values with better results (>0.5 g/t gold) including:
BUAQ1 1 metre @ 1.98g/t gold and 83.6g/t silver from 1.5
metres
2 metres @ 12.85g/t gold and >200g/t silver from 4 metres
1 metre @ 2.43g/t gold and 31.3g/t silver from 7 metres
(or 6.5 metres @4.75g/t Au and 87.0g/t Ag)
BUAQ2 1.5 metres @ 1.93g/t gold and 69.1g/t silver from 18
metres
BUAQ3 1 metre @ 3.53g/t gold and 135g/t silver from 3.5
metres
0.5 metres @ 1.87g/t gold and 43.4g/t silver from 6 metres
The mineralization has been recorded over 900 metres strike and remains open
laterally and at depth.
Exploration continues with a further rock chip sampling program and AQ drilling
to test for extensions to the known strike to the vein.
AUCH VEIN SYSTEMS
Confirmatory rock chip sampling indicated the presence of high grade gold veins
in the Auch prospect area. Follow up rock chip sampling and AQ drilling is in
progress.
Competent Persons Statement:
The information in this report that relates to Exploration Results is based on
information compiled by Mr David Catterall, SANCASP .(Pr Sci Nat), MIMMM, GSSA..
Mr Catterall is employed by MSA Geosciences Pty Ltd who provide exploration
services to Scotgold Resources Ltd. Mr Catterall has sufficient experience which
is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2004 Edition of the 'Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr
Catterall consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears
The Information in this report that relates to Mineral Resources is based on
resource estimates compiled by EurGeol Dr S C Dominy FAusIMM (CP), FGS (CGeol),
FIMMM (CEng), MAIG, General Manager (UK) and Executive Consultant with Snowden
based in the London, England Office. Dr. Dominy has sufficient experience that
is relevant to the style of deposit under consideration and to the activity
which he is undertaking to qualify as Competent Person as defined in the 2004
Edition of the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore reserves. Dr Dominy consents to the inclusion in the report of
the matters based on this information in the form and context in which it
appears.
This financial report has been reviewed by HLB Mann Judd and a full copy is
available at www.scotgoldresources.com.
All amounts are reported in Australian dollars
STATEMENT OF COMPREHENSIVE INCOME
For The Year Ended 30 June 2010
+----------------------------------------+--+-------------+--+-----------+
| | | CONSOLIDATED |
+----------------------------------------+--+----------------------------+
| | | | | |
+----------------------------------------+--+-------------+--+-----------+
| | | 2010 | | 2009 |
+----------------------------------------+--+-------------+--+-----------+
| | | $ | | $ |
+----------------------------------------+--+-------------+--+-----------+
| | | | | |
+----------------------------------------+--+-------------+--+-----------+
| Revenue | | 46,623 | | 94,378 |
+----------------------------------------+--+-------------+--+-----------+
| | | | | |
+----------------------------------------+--+-------------+--+-----------+
| Administration costs | | (391,415) | | (221,073) |
+----------------------------------------+--+-------------+--+-----------+
| Depreciation | | (46,714) | | (74,165) |
+----------------------------------------+--+-------------+--+-----------+
| Employee and consultant costs | | (376,029) | | (145,374) |
+----------------------------------------+--+-------------+--+-----------+
| Listing and share registry costs | | (116,666) | | (43,895) |
+----------------------------------------+--+-------------+--+-----------+
| Office and communication costs | | (175,746) | | (123,986) |
+----------------------------------------+--+-------------+--+-----------+
| Other expenses | | (78,231) | | (85,184) |
+----------------------------------------+--+-------------+--+-----------+
| | | | | |
+----------------------------------------+--+-------------+--+-----------+
| LOSS BEFORE INCOME TAX EXPENSE | | (1,138,160) | | (599,299) |
+----------------------------------------+--+-------------+--+-----------+
| | | | | |
+----------------------------------------+--+-------------+--+-----------+
| Income tax expense | | - | | - |
+----------------------------------------+--+-------------+--+-----------+
| | | | | |
+----------------------------------------+--+-------------+--+-----------+
| NET LOSS FOR THE YEAR | | (1,138,160) | | (599,299) |
+----------------------------------------+--+-------------+--+-----------+
| | | | | |
+----------------------------------------+--+-------------+--+-----------+
| Other Comprehensive Income | | - | | - |
+----------------------------------------+--+-------------+--+-----------+
| | | | | |
+----------------------------------------+--+-------------+--+-----------+
| | | | | |
+----------------------------------------+--+-------------+--+-----------+
| Comprehensive loss for the year | | (1,138,160) | | (599,299) |
+----------------------------------------+--+-------------+--+-----------+
| | | | | |
+----------------------------------------+--+-------------+--+-----------+
| Basic loss per share (cents per share) | | 1.18 | | 0.95 |
+----------------------------------------+--+-------------+--+-----------+
STATEMENT OF FINANCIAL POSITION
As at 30 June 2010
+----------------------------------------+--+-------------+--+-------------+
| | | CONSOLIDATED |
+----------------------------------------+--+------------------------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| | | 2010 | | 2009 |
+----------------------------------------+--+-------------+--+-------------+
| | | $ | | $ |
+----------------------------------------+--+-------------+--+-------------+
| CURRENT ASSETS | | | | |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| Cash and cash equivalents | | 1,592,997 | | 695,461 |
+----------------------------------------+--+-------------+--+-------------+
| Trade and other receivables | | 122,548 | | 35,026 |
+----------------------------------------+--+-------------+--+-------------+
| Other current assets | | 6,527 | | 8,308 |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| Total Current Assets | | 1,722,072 | | 738,795 |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| NON CURRENT ASSETS | | | | |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| Trade and other receivables | | 87,719 | | 102,564 |
+----------------------------------------+--+-------------+--+-------------+
| Plant and equipment | | 199,573 | | 221,341 |
+----------------------------------------+--+-------------+--+-------------+
| Mineral exploration and evaluation | | 8,917,502 | | 6,331,773 |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| Total Non Current assets | | 9,204,794 | | 6,655,678 |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| TOTAL ASSETS | | 10,926,866 | | 7,394,473 |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| CURRENT LIABILITIES | | | | |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| Trade and other payables | | 298,948 | | 202,085 |
+----------------------------------------+--+-------------+--+-------------+
| Other current liabilities | | 36,189 | | 41,082 |
+----------------------------------------+--+-------------+--+-------------+
| Interest bearing liabilities | | 7,478 | | 13,551 |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| Total Current Liabilities | | 342,615 | | 256,718 |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| NON CURRENT LIABILITIES | | | | |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| Interest bearing liabilities | | - | | 7,478 |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| Total Non Current Liabilities | | - | | 7,478 |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| TOTAL LIABILITIES | | 342,615 | | 264,196 |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| NET ASSETS | | 10,584,251 | | 7,130,277 |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| EQUITY | | | | |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| Issued capital | | 12,324,019 | | 7,731,885 |
+----------------------------------------+--+-------------+--+-------------+
| Reserves | | - | | 602,304 |
+----------------------------------------+--+-------------+--+-------------+
| Accumulated losses | | (1,739,768) | | (1,203,912) |
+----------------------------------------+--+-------------+--+-------------+
| | | | | |
+----------------------------------------+--+-------------+--+-------------+
| TOTAL EQUITY | | 10,584,251 | | 7,130,277 |
+----------------------------------------+--+-------------+--+-------------+
STATEMENT OF CHANGES IN EQUITY
For The Year Ended 30 June 2010
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| | CONSOLIDATED |
+------------------------+--------------------------------------------------------------+
| |Contributed | |Accumulated | | Option | | Total |
| | Equity | | Losses | | Reserve | | Equity |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| Year Ended 30 June | $ | | $ | | $ | | $ |
| 2009 | | | | | | | |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| | | | | | | | |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| Balance 1 July 2008 | 7,731,885 | | (604,613) | | 331,000 | | 7,458,272 |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| Share Placement | - | | - | | 297,992 | | 297,992 |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| Option issue expenses | - | | - | | (26,688) | | (26,688) |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| Loss for the year | - | | (599,299) | | - | | (599,299) |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| As at 30 June 2009 | 7,731,885 | | (1,203,912) | | 602,304 | | 7,130,277 |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| | | | | | | | |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| Year Ended 30 June | | | | | | | |
| 2010 | | | | | | | |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| | | | | | | | |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| Balance 1 July 2009 | 7,731,885 | | (1,203,912) | | 602,304 | | 7,130,277 |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| Share Placements | 5,197,500 | | - | | - | | 5,197,500 |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| Transfer of option | - | | 602,304 | | (602,304) | | - |
| reserve on option | | | | | | | |
| expiry | | | | | | | |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| Share issue expenses | (605,366) | | - | | - | | (605,366) |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| Loss for the year | - | | (1,138,160) | | - | | (1,138,160) |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
| As at 30 June 2010 | 12,324,019 | | (1,739,768) | | - | | 10,584,251 |
+------------------------+-------------+--+-------------+--+-----------+--+-------------+
STATEMENT OF CASH FLOWS
For The Year Ended 30 June 2010
+-----------------------------------------+--+-------------+--+-------------+
| | | CONSOLIDATED |
+-----------------------------------------+--+------------------------------+
| | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| | | 2010 | | 2009 |
+-----------------------------------------+--+-------------+--+-------------+
| | | $ | | $ |
+-----------------------------------------+--+-------------+--+-------------+
| | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| Payment to suppliers | | (1,250,511) | | (531,323) |
+-----------------------------------------+--+-------------+--+-------------+
| Interest income received | | 46,623 | | 94,378 |
+-----------------------------------------+--+-------------+--+-------------+
| | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| Net Cash Outflow From Operating | | (1,203,888) | | (436,945) |
| Activities | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| Payments for exploration expenditure | | (2,446,502) | | (2,492,012) |
+-----------------------------------------+--+-------------+--+-------------+
| Payment for other fixed assets | | (24,946) | | (125,949) |
+-----------------------------------------+--+-------------+--+-------------+
| | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| Net Cash Outflow From Investing | | (2,471,448) | | (2,617,961) |
| Activities | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| Proceeds from issue of shares and | | 5,197,500 | | 297,992 |
| options | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| Share and option issue transaction | | (605,366) | | (26,688) |
| costs | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| Hire purchase repayments | | (11,948) | | (14,429) |
+-----------------------------------------+--+-------------+--+-------------+
| | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| Net Cash Inflow From Financing | | 4,580,186 | | 256,875 |
| Activities | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| Net increase / (decrease) in cash held | | 904,850 | | (2,798,031) |
+-----------------------------------------+--+-------------+--+-------------+
| | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| Effect of exchange rate fluctuations on | | (7,314) | | (17,282) |
| cash and | | | | |
| cash equivalents | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| Cash and cash equivalents at the | | 695,461 | | 3,510,774 |
| beginning of this | | | | |
| financial year | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| | | | | |
+-----------------------------------------+--+-------------+--+-------------+
| Cash and cash equivalents at the end of | | 1,592,997 | | 695,461 |
| this financial year | | | | |
+-----------------------------------------+--+-------------+--+-------------+
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
These accompanying notes form part of the financial statement
NOTE 1 - MINERAL EXPLORATION AND EVALUATION
+------------------------+-----------+-----------+
| Opening balance | 6,331,773 | 3,850,163 |
+------------------------+-----------+-----------+
| Expenditure during the | 2,585,729 | 2,481,610 |
| year | | |
+------------------------+-----------+-----------+
| Closing balance | 8,917,502 | 6,331,773 |
+------------------------+-----------+-----------+
The ultimate recoupment of exploration expenditure carried forward is dependent
upon successful development and commercial exploitation, or sale of the
respective areas.
NOTE 2 - ISSUED CAPITAL
(a) Issued capital
+------------------------+------------+-----------+
| $ | 2010 | 2009 |
+------------------------+------------+-----------+
| 117,306,762 ordinary | 12,324,019 | 7,731,885 |
| shares fully paid | | |
+------------------------+------------+-----------+
(b) Movements in ordinary share capital of the Company were as follows:
+------------------------+-----------+-------------+-----------+------------+
| Date | Details | No of | Value (c) | $ |
| | | Shares | | |
+------------------------+-----------+-------------+-----------+------------+
| Balance at 30 June | | 63,415,852 | | 7,731,885 |
| 2008 | | | | |
+------------------------+-----------+-------------+-----------+------------+
| Balance at 30 June | | 63,415,852 | | 7,731,885 |
| 2009 | | | | |
+------------------------+-----------+-------------+-----------+------------+
| 03/07/2009 | Placement | 9,500,000 | 8.50 | 807,500 |
+------------------------+-----------+-------------+-----------+------------+
| 20/10/2009 | Placement | 10,900,000 | 11.00 | 1,199,000 |
+------------------------+-----------+-------------+-----------+------------+
| 27/11/2009 | Placement | 18,190,910 | 11.00 | 2,001,000 |
+------------------------+-----------+-------------+-----------+------------+
| 24/02/2010 | Placement | 15,300,000 | 7.78 | 1,190,000 |
+------------------------+-----------+-------------+-----------+------------+
| Transaction costs | | | | (605,366) |
| arising on share | | | | |
| issues | | | | |
+------------------------+-----------+-------------+-----------+------------+
| Balance at 30 June | | 117,306,762 | | 12,324,019 |
| 2010 | | | | |
+------------------------+-----------+-------------+-----------+------------+
(c) Movements in options were as follows:
+------------------------+--------------+--------------+-----------+-----------+
| Date | Details | No of | Issue | Value $ |
| | | Options | Price (c) | |
+------------------------+--------------+--------------+-----------+-----------+
| Balance at 30 June | | 9,000,000 | | 331,000 |
| 2008 | | | | |
+------------------------+--------------+--------------+-----------+-----------+
| 14/07/2008 | Entitlements | 28,484,204 | 1.00 | 284,842 |
| | Issue | | | |
+------------------------+--------------+--------------+-----------+-----------+
| 11/09/2008 | Shortfall | 1,315,000 | 1.00 | 13,150 |
| | allocation | | | |
+------------------------+--------------+--------------+-----------+-----------+
| Transaction costs | | | | (26,688) |
| arising on options | | | | |
| issue | | | | |
+------------------------+--------------+--------------+-----------+-----------+
| Balance at 30 June | | 38,799,204 | | 602,304 |
| 2009 | | | | |
+------------------------+--------------+--------------+-----------+-----------+
| Balance at 30 June | | 38,799,204 | | 602,304 |
| 2009 | | | | |
+------------------------+--------------+--------------+-----------+-----------+
| 30/04/2010 | Expiry of | (38,799,204) | | (602,304) |
| | options | | | |
+------------------------+--------------+--------------+-----------+-----------+
| Balance at 30 June | | - | | - |
| 2010 | | | | |
+------------------------+--------------+--------------+-----------+-----------+
(d) Voting and dividend rights
Ordinary shares participate in dividends and the proceeds on winding up of the
parent entity in proportion to the number of shares held.
At shareholders meetings each ordinary share is entitled to one vote when a poll
is called, otherwise each shareholder has one vote on a show of hands.
NOTE 3 - NOTES TO THE CASH FLOW STATEMENT
+------------------------+-------------+-----------+
| | 2010 $ | 2009 $ |
+------------------------+-------------+-----------+
| Reconciliation of loss | | |
| after income tax to | | |
| net operating cash | | |
| flows | | |
+------------------------+-------------+-----------+
| | | |
+------------------------+-------------+-----------+
| Loss from ordinary | (1,138,160) | (599,299) |
| activities | | |
+------------------------+-------------+-----------+
| Depreciation | 46,714 | 74,165 |
+------------------------+-------------+-----------+
| Exchange loss on | (9,286) | 22,721 |
| revaluation of loans | | |
+------------------------+-------------+-----------+
| | (1,100,732) | (502,413) |
+------------------------+-------------+-----------+
| | | |
+------------------------+-------------+-----------+
| Movement in assets and | | |
| liabilities | | |
+------------------------+-------------+-----------+
| Receivables | 5,851 | 37,944 |
+------------------------+-------------+-----------+
| Other current assets | (97,819) | 5,766 |
+------------------------+-------------+-----------+
| Payables | (11,188) | 21,758 |
+------------------------+-------------+-----------+
| Net cash used in | (1,203,888) | (436,945) |
| operating activities | | |
+------------------------+-------------+-----------+
NOTE 4 - LOSS PER SHARE
+------------------------+------------+------------+
| Number | 2010 | 2009 |
+------------------------+------------+------------+
| Weighted average | 96,539,464 | 63,415,852 |
| number of ordinary | | |
| shares outstanding | | |
| during the year used | | |
| in the calculation of | | |
| basic loss per share | | |
+------------------------+------------+------------+
There are no potential ordinary shares on issue at the date of this report.
NOTE 5 - MATTERS SUBSEQUENT TO THE END OF FINANCIAL YEAR
On 18 August 2010 the Company advised that the Loch Lomond and The Trossachs
National Parks Board had voted to refuse the Company's application for planning
permission for the establishment of the proposed gold and silver mine at
Cononish.
At the date of this report the company is considering its options in relation to
this refusal but is likely to appeal to the Scottish Ministers. Any appeal would
need to be lodged within three months and Scotgold will make a further release
to advise its intentions.
Scotgold is extremely disappointed at the decision, given the ongoing
interaction with the Parks Board over a substantial time frame though are
encouraged that the decision was by a very narrow majority. It is considered
that the proposal has significant merit in the local, regional and national
context and the proposed development would have minimal environmental impact.
Scotgold remains committed to exploration at its other prospects located outside
the National Park's boundaries (85% of our current license areas are outside the
National Park) at Beinn Udlaidh and other areas.
A copy of Scotgold's representation, which was made to the Loch Lomond and The
Trossachs National Parks Board prior to the vote, is available at the Company's
website.
It is the opinion of management that the refusal to grant planning approval does
not in itself create an impairment issue.
No other matters or circumstances have arisen after balance date that have
significantly affected, or may significantly affect, the operations of the
consolidated entity, the results of those operations, or the state of affairs of
the consolidated entity in future periods.
NOTE 6 - PUBLICATION OF FINANCIAL REPORT
The report is extracted from the Company's full annual report for the year ended
30 June 2010. A copy of the full report is available on the Company's website:
www.scotgoldresources.com.
GLOSSARY OF GEOLOGICAL TERMS
+----------------+-----------------------------------------------+
| ADIT | a type of entrance to an underground mine |
| | which is horizontal or nearly horizontal. |
| | |
+----------------+-----------------------------------------------+
| APPIN GROUP | the oldest subgroup of the Dalradian |
| | Supergroup, c. 4 km thick, made up of |
| | quartzites, pelitic and limestone units. |
| | |
+----------------+-----------------------------------------------+
| AQ | nominal diamond drill core diameter of 27mm. |
| | |
| | |
+----------------+-----------------------------------------------+
| ARGYLL GROUP | a subgroup of the Dalradian Supergroup, c. |
| | 9km thick, made up of tillites, quartzites, |
| | pelitic and psammitic units. |
| | |
+----------------+-----------------------------------------------+
| ASSAY | a procedure to determine the proportions of |
| | metal in an ore or to test an ore or mineral |
| | for composition, weight, purity etc.. |
| | |
+----------------+-----------------------------------------------+
| AZIMUTH | the angle of horizontal difference, measured |
| | clockwise, of a bearing from a standard |
| | direction, as from north or south. |
| | |
+----------------+-----------------------------------------------+
| BASE METALS | more common chemically active metals, e.g. |
| | copper, lead, tin, zinc etc.. |
| | |
+----------------+-----------------------------------------------+
| BEDROCK | the solid rock lying beneath superficial |
| | material such as gravel or soil. |
| | |
+----------------+-----------------------------------------------+
| BRECCIA | a rock composed of angular fragments of |
| | minerals or rocks in a matrix (cementing |
| | material), that may be similar or different |
| | in composition to the fragments. |
| | |
+----------------+-----------------------------------------------+
| BRECCIA PIPE | a mass of breccia, often in an irregular and |
| | cylindrical shape, that appears as an |
| | iron-stained knob, from several feet to |
| | several hundred feet in diameter. Breccia |
| | pipes may or may not be silicified. They |
| | usually consist of fragments of the host rock |
| | (the rock layer they are contained in) |
| | cemented together by silica. |
| | Breccia-hosted, precious metal deposits occur |
| | throughout the world and are known to host |
| | very large resources. Examples in Australia |
| | are Kidston (4.5 M oz gold), Mt Leyshon (3.5 |
| | M oz gold) and Mt Wright (1 M oz gold) all of |
| | which are located in North Queensland. |
| | Examples in North America are Golden Sunlight |
| | in Wyoming (3.8 M oz gold) and Cripple Creek |
| | in Colorado (21 M oz gold) which are |
| | associated with lamprophyre fields. |
| | |
+----------------+-----------------------------------------------+
| CALCAREOUS | a rock that contains as much as 50% calcium |
| ROCK | carbonate. |
| | |
+----------------+-----------------------------------------------+
| COMPLEXITY | a factor applied to the tonnage to indicate |
| FACTOR | uncertainty in the geometric shape at depth. |
+----------------+-----------------------------------------------+
| | |
+----------------+-----------------------------------------------+
| DALRADIAN | a succession of Late Precambrian and Cambrian |
| SUPERGROUP | marine sedimentary rocks which have been |
| | metamorphosed in parts of Scotland and |
| | Ireland. It is typically developed in the |
| | high grounds which lie southeast of the Great |
| | Glen of Scotland. It is made up of four |
| | subgroups the Grampian, Appin, Argyll and |
| | Southern Highland groups. |
| | |
+----------------+-----------------------------------------------+
| DIAMOND | a diamond-studded rotary-drilling bit, used |
| DRILLING | for coring and drilling in very hard rock. |
| | |
+----------------+-----------------------------------------------+
| DIP | the angle in degrees between a horizontal |
| | plane and an inclined earth feature. |
| | |
+----------------+-----------------------------------------------+
| GEOCHEMICAL | the application of methods and techniques of |
| SURVEYS | geochemistry to the search for mineral or |
| | petroleum deposits. |
| | |
+----------------+-----------------------------------------------+
| GRADE | the relative quantity or percentage of |
| | mineral content in an ore body. |
| | |
+----------------+-----------------------------------------------+
| HIGH GRADE | a high quantity or percentage of mineral |
| | content in an ore body. |
| | |
+----------------+-----------------------------------------------+
| INCLINATION | See DIP |
| | |
+----------------+-----------------------------------------------+
| INDICATED | part of a Mineral Resource for which tonnage, |
| MINERAL | densities, shape, physical characteristics, |
| RESOURCE | grade and mineral content can be estimated |
| | with a reasonable level of confidence. It is |
| | based on exploration, sampling and testing |
| | information gathered through appropriate |
| | techniques from locations such as outcrops, |
| | trenches, pits, workings and drill holes. |
| | |
+----------------+-----------------------------------------------+
| INFERRED | part of a Mineral Resource for which tonnage, |
| MINERAL | grade and mineral content can be estimated |
| RESOURCE | with a low level of confidence. It is |
| | inferred from geological evidence and assumed |
| | but not verified geological and/or grade |
| | continuity. It is based on information |
| | gathered through appropriate techniques from |
| | locations such as outcrops, trenches, pits, |
| | workings and drill holes which may be limited |
| | or of uncertain quality and reliability. |
+----------------+-----------------------------------------------+
| IP ANOMALY | an anomaly in the 'induced potential', where |
| | geophysicists put electrical pulses into the |
| | ground and then measure the decay of voltage. |
| | |
+----------------+-----------------------------------------------+
| JORC | the Australian 'Joint Ore Reserves Committee' |
| | sets out minimum standards, recommendations |
| | and guidelines for Public Reporting in |
| | Australasia of Exploration Results, Mineral |
| | Resources and Ore Reserves. |
| | |
+----------------+-----------------------------------------------+
| LAMPROPHYRE | ultrapotassic, igneous rock primarily |
| | occurring as dykes, lopoliths, laccoliths, |
| | stocks and small intrusions. It is an |
| | alkaline, silica-undersaturated and |
| | ultramafic rock. |
| | |
+----------------+-----------------------------------------------+
| LOW GRADE | a low quantity or percentage of mineral |
| | content in an ore body. |
| | |
+----------------+-----------------------------------------------+
| MEASURED | part of a Mineral Resource for which tonnage, |
| MINERAL | densities, shape, physical characteristics, |
| RESOURCE | grade and mineral content can be estimated |
| | with a high level of confidence. It is based |
| | on detailed and reliable exploration, |
| | sampling and testing information gathered |
| | through appropriate techniques from locations |
| | such as outcrops, trenches, pits, workings |
| | and drill holes. |
| | |
+----------------+-----------------------------------------------+
| METALIFFEROUS | containing, yielding, or producing metal or |
| | ore. |
| | |
+----------------+-----------------------------------------------+
| METASEDIMENT | sediment or sedimentary rock that shows |
| | evidence of having been subjected to |
| | metamorphism. |
| | |
+----------------+-----------------------------------------------+
| MINERALISATION | a process by which valuable minerals are |
| | introduced into a rock, resulting in an ore |
| | deposit, either actual or potential. |
| | |
+----------------+-----------------------------------------------+
| MINERAL | is a concentration or occurrence of material |
| RESOURCE | of intrinsic economic interest in or on the |
| | Earth's crust in such form, quality and |
| | quantity that there are reasonable prospects |
| | for eventual economic extraction. The |
| | location, quantity, grade, geological |
| | characteristics and continuity of a Mineral |
| | Resource are known, estimated or interpreted |
| | from specific geological evidence and |
| | knowledge. Mineral Resources are sub-divided, |
| | in order of increasing geological confidence, |
| | into Inferred, Indicated and Measured |
| | categories |
| | |
+----------------+-----------------------------------------------+
| PELITES | metamorphosed sediment with a dominantly |
| | mudstone/siltstones protolith. |
| | |
+----------------+-----------------------------------------------+
| PRECIOUS | naturally occurring metallic chemical element |
| METALS | of high economic value, which is not |
| | radioactive, commonly part of the platinum |
| | group. |
| | |
+----------------+-----------------------------------------------+
| PSAMMITES | metamorphosed sediment with a dominantly |
| | sandstone protolith. |
| | |
+----------------+-----------------------------------------------+
| QUARTZ | crystalline silica, SiO2. . |
| | |
+----------------+-----------------------------------------------+
| STRIKE | parallel to the direction taken by a |
| | structural surface such as a fault or bedding |
| | plane as it intersects the horizontal. |
| | |
+----------------+-----------------------------------------------+
| VEIN | a tabular or sheet like body of one of more |
| | minerals deposited in openings of fissures, |
| | joints or faults, frequently with associated |
| | replacement of host rock. |
+----------------+-----------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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