SCOTGOLD Resources' mining lease for Cononish mine, near Tyndrum in Argyll, has been granted unconditionally by the Crown Estate and it remains on track to produce gold by late 2013, the company said.

The National Parks Authority issued its decision notice to approve the development on February 14.

Expiry of a three-month period means the lease is now unconditionally in effect.

The company, led by chief executive Chris Sangster, said: "Scotgold Resources continues to work closely with the planning authority to set out detailed arrangements for the development in order to satisfy outstanding conditions.

"These include decommissioning and restoration plans, detailed construction method statements, peat handling plans and plans for improvements in the Cononish glen. The company expects to meet these conditions within the next four months."

A recent report commissioned by Scotgold revealed that estimated development costs for the mine have risen from £12.3 million to £22.3m in the last three years.

Scotgold said yesterday: "The company remains in discussion with various parties regarding the financing of the project."

It said that, subject to financing, project development could begin in the final quarter of 2012 leading to the first production of gold in the fourth quarter of 2013.

Scotgold had previously hoped to start work on the site this summer and produce gold by the second quarter of 2013.

Earlier this month Scotgold said investors should not be concerned by queries by Australian regulators as to whether it was able to sustain its current cash burn.

Scotgold has estimated it could recoup the costs of developing its gold project in Cononish in 18 months. It is expected to recover 21,000 ounces of gold and 74,700 ounces of silver annually.

The firm published a projection that the mine would generate £65.9m of cash at current prices.