The proposed gold and silver mine at Tyndrum in Argyll has a potential life of eight years, double early estimates, its developer has said.

Scotgold Resources has published a new estimate of ore reserves at the Cononish mine, and says the project is viable at a gold price of $1100, some $100 below its current level.

The company's shares doubled briefly in January to 1.32p when it unveiled a new 'Mineral Resource Estimate' which put the total reserve at 248,000 ounces of gold, a trebling of previous estimates, and 851,000 ounces of silver. The latest official 'Ore Reserve' puts the gold estimate at a more conservative 198,000 ounces, said to be a rise of 179per cent on the April 2013 estimate. The shares rose 0.08p to 0.68p, up 13 per cent.

Scotgold Resources was floated on the Alternative Investment Market at 6.6p in 2010 and hit 6.9p when the national parks authority said controlled small-scale mining could boost the local economy. This year the authority has given permission for 24-hour mining, cutting the cost of the machinery needed to extract the metals at a viable pace.

The estimate gives the mine's first 'proven reserve' of 24,000 ounces of gold and 108,000 of silver, and it says that at a processing rate of 72,000 tonnes a year for the estimated 555,000 tonnes required, the life of the mine increases to eight years.

The company said its new mine design and schedule had also been completed, enabling earlier access to the mine's higher grade ore. The mine will be able to yield the equivalent of around 30,000 ounces of gold a year in its second and third years - above the average annual output of 23,000 ounces - to boost cashflow.

The exploration team has been enhanced with the recruitment of a project geologist, Scotgold said, a structural prospectivity exercise is under way, and the added capacity will enable the company to focus on its extensive Grampian project.

The AIM-listed company said in March it had renewed option agreements with the Crown over five parcels of land in the south-western Grampians for a period of up to six years.

It said the 'bankable feasibility study', incorporating revised estimates for capital and operating costs, would not be complete until July.

Richard Gray, chief executive, said: "We continue on track to deliver the Cononish Project into production. I believe this Ore Reserve statement highlights the robustness of the project, even using a gold price of $1,100 an ounce, some $100 below the current market price. This improved confidence is a material factor in our early stage discussions with potential financiers and will assist us secure the best possible financial arrangements in the coming months."

In March, Mr Gray said that with an 18-month construction phase "we will be pouring gold at the end of the first quarter 2017".

Scotgold Resources originally hoped to start production in the national park in 2011 but was hit by a slump in the gold price which impacted its financing. It was rescued last year by IG Metals tycoon Nat Le Roux who now holds a 40 per cent stake.

Last month the group raised £450,000 following the appointment of Vicarage Capital as the its joint broker, and Mr Gray said the level of support demonstrated by a fundraising from new shareholders was "extremely encouraging".