MINING company Scotgold Resources, which has permission to dig for gold and silver in the Loch Lomond and The Trossachs National Park, has confirmed the high-grade nature of its mine, which could allow it to raise more debt.
Scotgold, which is listed on the junior Alternative Investment Market in the UK and the Australian Securities Exchange, has reported results from the first three holes of a drilling programme at its Cononish mine near Tyndrum, in Argyll.
It told investors the infill programme, which was launched in January, "continues to encounter high grades and excellent widths of gold and silver mineralisation".
Scotgold chief executive Chris Sangster said: "These results from the initial phase of the infill programme continue to confirm the high-grade nature of the Cononish vein.
"The programme is designed to increase the debt capacity for the project by demonstrating with increased certainty the presence and continuity in the high-grade ore in the section that will be the first to be mined."
Earlier this month, Scotgold secured a £1.18 million financing deal with RMB Resources, an arm of South African financial services company First Rand.
Planning permission for the Cononish project was granted in October 2011 and confirmation of the Crown Lease was received in May. Mr Sangster said: "The company is well placed to progress towards first production."
The holes from which results were reported were the first from an eight-hole programme aimed at improving the confidence of investors in those parts of the mine that will be operated in its earliest years. By doing so, Scotgold hopes to make the company more attractive to debt investors.
It has already started the drilling of another 10 holes in other areas of the site.
Scotgold believes, subject to financing, that project development could begin towards the end of 2012 leading to the first production of gold in late 2013.
The project requires pre-production spending of £22.3m, almost double an estimate three years ago, because the commodities boom has pushed up costs.
Scotgold is expected to recover 21,000 ounces of gold and 74,700 ounces of silver from Cononish annually. The company estimates it can recoup the costs of developing its gold project in just 18 months of production.
The project is expected to bring 52 jobs to the area.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article