ANALYSIS: a history of gold mining in Scotland

GOLD mining in Scotland is set to resume in Scotland for the first time in decades.

Scotgold Resources, the company seeking to open a mine at Cononish in Argyll, has secured a £2.65m funding boost and is now hopeful of forging ahead with the project early next year.

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The money has come from a new share issue which has been underwritten by the Company’s Chairman, investor Nat le Roux.

This will allow the firm to prepare the ground ahead of opening the mine, widen access for vehicles, buy equipment and pay staff.

The company still requires the granting of planning permission from the Loch Lomond and Trossachs National Park Authority, but talks are said to be progressing “constructively” towards a conclusion.

HeraldScotland:

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Scotgold chief executive Richard Gray said: “We’ve taken a big step forward, but we’re not quite there yet.

“The next step is to get the planning permission through, but things have been progressing very constructively with the park authorities on that front.

“The other thing is to arrange a second tranche of funding”

He added: “What the money [raised from the current share issue] does is allow us to progress things at the site before we get the permit to start mining.

“There’s some work we can do at the mine without the planning permission throughout December, and then we can get the ball rolling as soon as it is granted.

"The final tranche of funding can then be concluded in parallel with this work, early in the new year, at a more appropriate stage of the project's development. "This exciting shift in operational focus means we will be progressing the Cononish Project to production in a timely manner."

Scotgold acquired the Cononish site in 2007 and has embarked on a long journey to bring the mine up to a workable state and start producing gold.

Experts think there could be as much as five tonnes of gold to be found in the hills near Tyndrum, encased in quartz which must be dug out and crushed.

HeraldScotland: The mine is quite remote

Up until now, the viability of the mine has depended on whether it would be economic to begin operations as the price of gold has fluctuated since the mine was first explored in the 1980s.

Up to 29,000 ounces of precious metals could be mined per year, and the project has an estimated life of eight years. Around 60 jobs could be created for local people.

Villagers in nearby Tyndrum, a popular stop on the route north to Glencoe and Fort William, hope to open a visitors’ centre and to market Cononish gold to tourists.

The mine recorded its first major success last year when it began processing ore which was dug out of an exploratory tunnel during the 1990s by previous company Ennex.

The trial produced enough gold to make ten one-ounce “rounds”, which were sold on to collectors.

Just under £46,000 was raised by the auction - a mark-up of nearly 400 per cent on the current market price of £974per ounce.

Scotgold Resources believes its gold will attract a premium price as a niche product for tourists, jewellers and couples keen on Scottish gold wedding or engagement rings.

The first round, embossed, like all the coins, with a stag’s head, was snapped up by Graham Donaldson, a Scotgold shareholder who lives in Christchurch, Dorset. His bid of £21,003.3p was the highest. “As to what I would do with it now, I would probably look at it and stroke it, and put it in a safe,” he said.

Donaldson said he and his wife planned in time to get new engagement and wedding rings made from Cononish gold, to replace the budget rings they could afford when they originally married. “Those are worn thin,” he added.

HeraldScotland: The first Scottish gold from the mine

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Scotgold also announced a deal had been struck with a prominent jeweller to manufacture the first items made from Scottish gold last June.

A spokesman for Loch Lomond & The Trossachs National Park said: “A Planning Application was received from Scotgold on the 10 August 2017 for their revised mine proposal at Cononish Gold Mine in Tyndrum.

"This will be considered according to the National Park Authority’s standard planning procedures.”