Sangster slams bid to block gold mine in national park

SCOTGOLD Resources, the Aim-listed firm seeking to open Scotland's only commercial gold mine, has launched a blistering attack on a report recommending that planning permission be refused at a key meeting this week.

Chris Sangster, chief executive of Scotgold, has criticised the report as "highly subjective" as it threatens to deal a fatal blow to his firm's flagship project at Cononish, in the Loch Lomond and Trossachs National Park.

Gordon Watson, director of planning at the park, has advised members of the National Park Authority Board meeting on Wednesday to turn down Scotgold's application - without which the project cannot go ahead.

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Watson says the mine, which Scotgold bought in 2007, would have a negative impact on the public enjoyment of the area. His report, published last week, also claims the economic benefits of the mine would be "very transitory and highly dependent" on gold prices remaining at their current value.

In an interview with Scotland on Sunday, Sangster insisted the mine would be "very, very profitable" - not only for his own company but for the local community and the Scottish Government.

The price of gold needs to be above $350 (225) to $400 an ounce for the Cononish mine to turn a profit - the current trading price is above $1,100 an ounce.

"With a project of this nature you take appropriate financial safeguards such as hedging. Once the mine is in production, the operating cost per ounce of gold is around $350 to $400 an ounce. I don't think anyone in their wildest predictions would see prices returning to those levels," Sangster said.

Scotgold, which floated on Aim in February, claims the mine would produce as much as 120 million worth of gold over its lifetime. It intends to employ 50 people directly at the site but claims the project would produce many more jobs indirectly.

"We would buy services into the mine. There's a supply chain, there are engineering services we want and there are obviously other services we need which we wouldn't provide by ourselves," Sangster said.

The firm is particularly concerned about the "subjective" environmental arguments put forward in Watson's report.

Sangster said all mining activity would take place underground, while the artificial mound which would be created as a result of excavations would be landscaped.

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"There's also a presumption that anyone who uses the glen would find the operations intrusive. The report speaks about how most people walk in the hills for tranquillity - agreed. But the fact that there would be a mine there - does it disturb them? The actual length of exposure if you are walking up Cononish Glen is relatively short in terms of your whole experience," he said.The firm says the area already plays host to commercial activity, including a forestry plantation and a farm.

Scotgold is supported by the local community council, whose chairman, John Riley, is planning to speak in support of the project at Wednesday's meeting. Riley said the local community felt "totally betrayed" by last week's report.

He also accused the findings of being "environmentally biased" and not giving enough consideration to how it would transform the local economy.

"This mine is an incredible opportunity," Riley said. "We've got young people here with no careers and no opportunity of advancement and here is a chance to employ an awful lot of local people."

A spokeswoman for the Loch Lomond and Trossachs National Park would not comment, saying the organisation could not say anything that would be seen as prejudicing Wednesday's decision.

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