Gold mine appeal pulled as Scotgold gears up for fresh bid

Australian mining group Scotgold Resources is withdrawing its appeal against planning refusal for its gold mine in the Loch Lomond and Trossachs National Park and will resubmit a fresh application within two months.

The move, announced yesterday, follows detailed talks between the company and park planning officials. It comes just a couple of months ahead of a full-scale planning appeal process and paves the way for a modified application for the Cononish gold mine near Tyndrum at the northern end of the National Park - one that should stand a better chance of getting the go-ahead.

Chris Sangster, managing director of Scotgold, told The Scotsman: "It was a difficult decision to withdraw our appeal but we feel we have made progress with the Park.

"The progress indicates to us that the environmental impact can be mitigated. We have drawn greater confidence from the process."

The company, whose shares dipped almost 5 per cent to 5p, now plans to resubmit a fresh application and a final decision from the park is expected in the autumn. The latest development will be seen as a positive step forward for the company in its battle to secure planning permission.

This was narrowly defeated in a heated debate at the park headquarters, with the authority's directly elected members thought to have voted overwhelmingly in favour of granting permission.

The news coincided with a fresh surge in the price of gold yesterday, which jumped 1.1 per cent to a record high of just below $1,500.

Cononish is expected to produce 20,000 ounces of gold and 80,000 ounces of silver.

Since plans were first mooted to re-open the mine 15 years ago, the price of gold has soared. Back in 1996 when the first application was made, the price stood at close to $375 an ounce. When Scotgold acquired the mine in 2007, the gold price had climbed to $640. When it submitted its planning application last autumn, the price had shot to more than $1,300.

"One of the park directors questioned the basis of the project", Sangster said yesterday. "But the price of gold has seen to that."

Scotgold's planning application submitted last August was narrowly refused by the National Park authority. It lodged an appeal with the department of planning and environmental appeals last November.

At the time the park authority indicated it would encourage the company to enter discussions about a modified application as an alternative to a lengthy appeals process.

The key issues relating to the refusal were the potential landscape and visual impact of the proposed tailings management facility.ScotGold brought in two independent analysts to advise on modification of its original proposals.

A spokesman for the Loch Lomond and Trossachs National Park said yesterday: "There has been a lot of work put into a revised scheme and the company arranged a public exhibition in Tyndrum last week. It is planning to put a lot of material back down the mine and it has made possible more public discussion about landscape restoration techniques."