The decision has comes as the company, as a precautionary measure, is engaged in dialogue with an administration specialist to prepare for a possible scenario where it fails to secure the needed financing and has to resort to appointing an administrator.

The firm’s strategy is to conserve funds and sustain key trained personnel pivotal for maintaining assets and ensuring compliance with necessary statutory, regulatory, and environmental obligations with the intention to resume full operations once its financial woes have been overcome.

Trading of Scotgold’s shares on London’s Alternative Investment Market was suspended earlier due to significant funding requirements. Although financing discussions are actively ongoing, a concrete agreement is yet to be reached.

In an update from the firm a spokesperson revealed that discussions are currently “at an advanced stage, with confirmatory diligence being undertaken”, however, “these have not yet reached final agreement”.

Meanwhile, a creditor has initiated legal proceedings against Scotgold, a move that could possibly hasten the need for administration if a funding solution isn’t achieved swiftly. The company is keen on addressing its accumulated debts and is hoping to resolve creditor concerns through negotiation and a structured repayment proposal.

Scotgold’s previously ambitious growth plans are now overshadowed by its struggle to remain afloat.