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Scotgold pushes for 24-hour mine operation

SCOTGOLD Resources has revealed it is looking at round-the-clock processing of gold from its Cononish mine, which has not yet entered production.

DEVELOPMENT: Scotgold chief executive Chris Sangster has revised plans for the Cononish Valley gold mine at Tyndrum. Picture: Mark Mainz
DEVELOPMENT: Scotgold chief executive Chris Sangster has revised plans for the Cononish Valley gold mine at Tyndrum. Picture: Mark Mainz

The move, which is intended to improve the economics of the development, comes as the firm has struggled to raise finance for the proposed mine in Argyll, despite attracting prominent investors such as Nat le Roux, the former chief executive of spread betting firm IG Group.

In November, Scotgold said it was exploring a scaled-back development of the mine, focusing on higher grade deposits.

Scotgold said yesterday it is preparing to open talks with the Loch Lomond and the Trossachs National Park Authority about lifting the current restriction of 16 hours of production a day.

The company, headed by chief executive Chris Sangster, said: "The initial mine designs, schedules and estimates for the Cononish Gold and Silver Project 'High Grade' option have been completed based on a substantially lower processing rate.

"Evaluation of these is ongoing, and the company is examining further scenarios to optimise the mining and processing rates including the possibility of continuous (24/6) processing.

"Current limitations on surface working hours permit processing for 16 hours a day [Monday to Saturday, excluding public holidays] and the company will hold initial discussions with the planning authority shortly regarding this and other matters relating to the possible smaller option."

It is just the latest twist for the project. Scotgold's initial application was rejected by the park authority in 2010 due to concerns about its economic viability and the impact of the associated waste dump. But approval was granted a year later.

However, gold prices last year retreated from their previous record highs, forcing Scotgold to reconsider its financing plans.

Gordon Watson, director of operations at Loch Lomond and the Trossachs National Park Authority, said: "Changes of this nature are likely to have to go through a formal planning process to amend the current consent, so we can't comment on any detail at this stage."

He added: "We have been giving constructive informal planning advice to Scotgold on what changes to the proposed operation might be acceptable, but these will then have to be subject to a planning application for formal consideration."

Scotgold said yesterday it is also in discussions about asset financing of mining equipment and processing facilities.

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