The company behind Scotland’s first commercial gold mine is on track to start selling its precious metal before the end of this year.
Scotgold Resources, which is developing its £24 million Cononish mine in the Loch Lomond and the Trossachs National Park, also said the results from a processing trial at the project had “positive implications” for future developments in the area.
The company is now in talks with the jewellery trade with a view to selling its gold “at a premium”, with the first sales – expected to be commemorative medallions – expected to go on sale before Christmas.
Richard Gray, chief executive of the Aim-quoted firm, told The Scotsman: “Everything is working and it’s all looking good.”
He added: “The company is pleased with the preliminary results of the bulk processing trial and in particular the potentially positive implications for the future development of Cononish.
It’s not just about getting the highest premium – we want quality control from day oneRichard Gray
“We look forward to completing the technical work streams underway to incorporate the opportunities identified into a revised development plan and assessing their economic impact. We also look forward to achieving our first sales of Scottish gold at a premium to spot price before the end of this year.”
Gray said that Scotgold is also seeking to secure a hallmark for its precious metal, adding: “It’s not just about getting the highest premium – we want quality control from day one.”
The firm has drafted in a consultancy, The Dragonfly Initiative, to help demonstrate the “marketability and profitability of hallmarked Scottish gold”.
“If we want to sell at a premium, the jewellery trade needs the supply to produce their ranges, so we’re accumulating a stockpile,” Gray said.
Although gold prices have fallen below $1,270 an ounce to hit their lowest levels since the UK voted to leave the European Union, as investors anticipate a rise in US interest rates, Gray insisted that Scotgold was a “good Brexit hedge” as the fall in the value of sterling has give the price of its gold a lift.
The mine can break even at a gold price of about £330, but the strength of the US dollar against the pound has seen the precious metal’s price jump towards £1,000 when converted to sterling – potentially doubling the operation’s profits.
Gray said: “The economics are looking better, stacking up in our favour. From concept to pouring our first gold has taken just six months. That’s testament to the team and the national park, which understands that this is important.”
Scotgold has a six-month permit to operate its bulk processing trial, and is planning to approach the park with a view to expanding the size of its operation, while recognising the need to limits its impact on the landscape.
“We want to be good corporate citizens, building trust and a working relationship,” Gray said.
Along with a further exploration licence in Portugal, Scotgold is looking at expanding its operations into France. While Gray said the firm does not want to “dilute” its focus on Cononish, he added: “You need to keep your eye on the ball”.