Planning chief backing Scotgold’s new application for Tyndrum mine

SCOTGOLD Resources, the firm seeking to open Scotland’s only commercial gold mine near Tyndrum, yesterday cleared a major hurdle when the head of planning at the Loch Lomond and the Trossachs National Park gave his approval for the project.

The recommendation is likely to guide the outcome of a vote by the National Park Authority Board, which will take place on 25 October following a two-day meeting.

Yesterday’s decision marks a key moment for Scotgold after its first planning application was rejected by the board in August 2010.

The Aim-quoted company – which is also listed on the Australian Securities Exchange – has had to endure costly delays to its flagship project after the park’s head of planning, Gordon Watson, last year objected to the first application on environmental and economic grounds.

The second submission includes significant changes, in particular to the “tailings management facility”, where waste from the mine is stored.

Watson said in yesterday’s report: “On balance, I have concluded that the temporary adverse impacts are outweighed by the anticipated outcome of a higher quality landscape and recreational experience being delivered in the long term. This benefit is in addition to the considerable economic benefits likely to accrue both to the Park area and wider Scottish economy.”

Scotgold, whose shares jumped 12 per cent, estimates that it will be able to produce 20,000 ounces of gold and 80,000 ounces of silver per year from the mine, which is expected to have a life span of eight to ten years.

About 5,000 ounces will be extracted as unrefined gold bars to be stamped as “Scottish gold”, potentially attracting a premium for goldsmiths and jewellers – similar to Welsh gold, which is popular with the Royal Family.

Chris Sangster, chief executive of Scotgold, said he was “confident” that the board will rubber-stamp the project at this month’s vote.

“This would represent the culmination of three years’ detailed work towards planning a mining development which meets the exacting environmental standards required by the National Park Authority whilst providing a significant commercial opportunity in the interests of all stakeholders, in particular the local community,” he said.

“The company and its agents have enjoyed a close working relationship with the National Park Authority, particularly over the past year,” he added.

Earlier this year, Scotgold published an independent report into the potential economic benefits of the mine, which placed the financial contribution at £30 million more than previously estimated.

Professor David Bell of Stirling University believes that the potential value to the Scottish economy would be around £80m. The company expects to create 52 full-time jobs.

The delays have, however, cost the firm and Sangster earlier this year sent a contrite letter to investors, acknowledging that “their patience has been tested”.

In August, the business launched its second rights issue in less than 12 months, raising A$1.6m (£1.04m).