No fooling as Scottish gold miner strikes sale deal

Scotgold Resources chief executive Richard Gray.  Picture: John Devlin

Scotgold Resources chief executive Richard Gray. Picture: John Devlin

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The firm behind Scotland’s first commercial gold mine has agreed to sell up to 120 tonnes of mineral containing the precious metal.

Scotgold Resources, which is developing its £24 million Cononish mine in the Loch Lomond and the Trossachs National Park, said the first shipment of “gold-rich pyrite” will set sail to metals trader Ocean Partner’s premises in the Netherlands “as soon as the appropriate logistics have been put in place”.

The miner is targeting the Scottish jewellery industry with its precious metal. Picture: John Devlin

The miner is targeting the Scottish jewellery industry with its precious metal. Picture: John Devlin

The company’s bulk processing trial (BPT) at Cononish has so far generated about 13.5 tonnes of pyrite concentrate – a mineral commonly known as fool’s gold due to its superficial resemblance to the precious metal. However, Scotgold said preliminary estimates showed that 1,100 tonnes of treated stockpile material at its site contained about 91 ounces of gold.

READ MORE: Scottish gold to hit shelves in time for Christmas

Plans for the shipment were announced as Scotgold raised almost £46,000 by auctioning off coins made from the first gold mined from Cononish, near Tyndrum. The auction, overseen by accountant Scott-Moncrieff, saw ten one-ounce rounds, minted by Baird & Co Bullion Merchants, sold to collectors who had placed sealed bids.

The highest price paid for a round – stamped with a stag’s head and unique serial number, accompanied by a certificate of authenticity from the Edinburgh Assay Office – was more than £21,000, with the lowest successful bid coming in at £2,300. The average price accepted was £4,557.90 an ounce, a premium of 378 per cent over the current spot price of £953.

Scotgold chief executive Richard Gray said: “This unique and historic event is the first demonstration of our ability to attract a premium for Scottish gold.

“The next opportunity to show the continued support for this precious metal from the Highlands will be the conclusion of agreements with members of the Scottish jewellery trade, who appreciate the value that can be added to their products by the proven provenance of the stag’s head Scottish gold mark. We expect to release news of these sales in the new year.”

In a separate development, the Aim-quoted firm has been working with testing specialist SGS and minerals analyst Wheal Jane Laboratory on the extraction of gold and silver from galena concentrate that has also been generated by its processing trial.

As of 26 October, the trial had generated about 300kg of gold-rich galena concentrate, containing some 77 ounces of gold, and Scotgold is now working with the Edinburgh Assay Office to “establish and certify a chain of custody”.

It added: “As such the company will be able to supply greater volumes of gold of proven provenance to the Scottish jewellery industry in the next phase of our marketing strategy.”

Gray said: “We continue to find opportunities to improve the BPT and, more importantly, the ultimate development plan for the Cononish mine. The technical work to verify these potential opportunities is ongoing and we anticipate an update to the Cononish bankable feasibility study to be completed in the first quarter of 2017.”

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