It is a business proposition perhaps more befitting early 19th century America than modern day Scotland.

But gold-mining is about to become a reality for a firm in Tyndrum, Argyll, after it received the necessary funding to buy the excavation equipment needed to start work at the site.

Scotgold Resources has been working to reopen an abandoned gold mine in Cononish for 12 years and claims it will now be able to begin commercial gold production later this year.

If successful, this will be the first time in decades that the precious metal has been mined in Scotland.

Richard Gray, managing director and CEO at Scotgold, said he believes the the project will “provide a significant boost to the local economy around Tyndrum”.

In the latest raft of funding for the firm, finance provider Simply has loaned the project £323,000, which has been used to purchase equipment including an excavator, a loading shovel and a dumper.

It is hoped that this will give the firm the last push it needs to be fully operational by the end of the year.

Ross Pickburn, regional sales manager at Simply, said: “This was an incredibly interesting deal to work on, not least because it was the first gold mine I’d ever helped fund.

“It’s great working with a company that produces Scottish gold and a team that is creating jobs in the area.

“We got to know about the needs of the company and were able to structure a deal that worked for all parties.”

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.

Planning permission for the project has been agreed, subject to certain conditions, by Loch Lomond and Trossachs National Park Authority, while the business also recently renegotiated and extended a secured loan deal with Nat le Roux, its chairman and “major” shareholder.

The loan facility from Mr le Roux, who is a former chief executive of the IG Group, is said to have increased by up to £1m to £6m.

At one point Scotgold predicted that gold and silver production at the site could reach as much as £17 million per year over a seven-year lifespan.

However, this has changed over time due to fluctuations in the price of 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.

Up to 29,000 ounces of precious metals could be mined per year, and the project could create around 60 jobs 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 market Cononish gold to tourists.

Scotgold produced its first gold from Cononish several years ago during a bulk ore processing trial at the site.

It was later sold for an average of £4,557 per ounce, a more than three-fold premium on the average gold price of the day.

The mineral was sold in the form of “rounds” minted by Baird and Co Bullion Merchants.

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.

At the time of the sale, he said: “As to what I would do with it now, I would probably look at it and stroke it, and put it in a safe.”

Mr 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 bought when they married.

“Those are worn thin,” he added.

Scotgold, which also has offices in West Perth, Australia, 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 firm also previously announced it had struck a deal with a prominent jeweller to manufacture the first items made from Scottish gold.

Exploration work in another area - the Grampian gold project - is also continuing, with a view to potentially developing sites in the Ochils, Glen Orchy, Glen Lyon, Inverliever and Knapdale under Crown Estate “option agreements”.