Gold mine boss sees his pay fall as wait goes on for approval

The boss of Scotgold Resources, the company seeking to open Scotland’s only commercial gold mine, took a 9 per cent pay cut this year as the firm awaits the outcome of a second planning application.

Chief executive Chris Sangster’s salary fell to A$206,750 (£128,389) from $228,340 the previous year, the Aim-quoted firm’s annual report yesterday revealed.

Chairman John Bentley also saw his fees fall, from $84,000 to $54,000.

Scotgold, which is hoping to open a mine in the Loch Lomond and the Trossachs National Park, made a pre-tax loss of $1,033,505 during the 12 months to 30 June – slightly narrower than last year’s deficit of $1,138,160. The report showed the company had a cash position of $950,668 at the end of the period.

It reports in Australian dollars because it is listed on both the Australian and London stock markets.

In August, after the company’s financial year end, it raised $1,613,000 from investors through a rights issue.

The firm’s plans to start production at the site near Tyndrum have been beset by delays ever since its first planning application received a surprise knock-back in August of last year amid concerns over the “devastating long-term impacts” of the project. It had been hoped that the mine would be up and running by the end of 2010.

Scotgold has since been working on a revised application – submitted at the start of the summer – following extensive talks with planners. The second application contains several amendments, including designs to reduce waste from the mining process and lessen the impact on the surrounding landscape.

A decision on the second application is expected towards the end of this month but the firm is hopeful that it will succeed. Earlier this year, it decided to drop an appeal against the rejection of the first application amid expectations that it will have more success with the revised submission.

In addition to its flagship mine at Cononish, Scotgold has exploration licences for several other areas of the Highlands.

It said in its annual report that it had continued exploration of its Glen Orchy, Glen Lyon and Inverliever licence area with a total investment for the year of $1.6m.

The report repeated that there is “widespread support” for the Cononish project “both locally and nationally” after Scotgold issued a statement last month saying it had the backing of a number of national and local organisations, including the Scottish Tourism Forum, the Scottish Chambers of Commerce and CBI Scotland.

Several MSPs have also voiced their support, including Scottish Conservative leadership candidate Murdo Fraser.

The mine is expected to produce 20,000 ounces of gold and 80,000 ounces of silver a year. According to a study by David Bell of Stirling University, it will generate £80 million in “additional economic activity” in Scotland.

Scotgold is due to receive £600,000 from Scottish Enterprise in the form of a regional selective assistance grant if planning is approved. It expects it will need more than 50 full-time employees to man the mine.