Scotgold plans new bid for mine at beauty spot despite rejection

THE company behind plans to open a gold mine in one of Scotland's most revered beauty spots is considering a second planning application only a month after its first was refused.

AIM-listed Scotgold Resources is hoping a revised application for its mine at Cononish in the Loch Lomond and the Trossachs National Park would avoid a lengthy appeals process, which Scottish Government insiders warn could take more than a year.

The company has been holding private discussions with members of the park authority board since its application was voted down by 12 votes to ten at a dramatic meeting in Tyndrum last month.

Investors are hoping that it will be a case of second time lucky for the firm's flagship project if a compromise can be struck over some of the board's environmental concerns.

Scotgold is examining what can be done to minimise the visual and environmental impact of the mine's "tailings management facility" where waste material is disposed. Although the resulting mound would be grassed over at the end of the mine's life, environmental campaigners believe the landscape would be marred by an unnatural land form. There are also fears the facility would ruin the "special qualities" of the area for walkers.

Although Scotgold insists it is still pursuing both possible courses of action - an appeal to Scottish ministers would need to be lodged by mid-November - it is believed a second application is the preferred option as it would likely involve fewer delays.

Despite last month's defeat, Chris Sangster, chief executive of the firm, said he continued to be "encouraged" by the close result of the meeting. With the park's board due to be reshuffled and reduced from 25 members to 17 next month, supporters of the project hope a second application containing several concessions may survive another vote.

However, either option will further delay progress at the mine until early next year at the earliest. It was originally anticipated that the project would be in operation by the end of this year.

Scotgold said in a statement: "Both alternatives will require further work by the company and its professional advisers and a positive resolution is unlikely to be achieved before the second quarter of 2011."

The firm, which made its debut on the London Stock Exchange this year, has seen its losses almost double in the past 12 months. Recent accounts revealed losses widened to A$1.14 million (690,000) from A$600,000 during the year to 30 June.

Ten days ago it revealed it was raising a further A$1m on the markets to support its exploration programme.

Scotgold also holds licences to explore for gold and silver over a 1,800-mile stretch of Central Scotland - vast swathes of which falls outside national park territory. However, it is estimated these other projects could take up to ten years to reach commercialisation. The project has support among the local community amid claims it would deliver a 50m benefit to the Scottish economy and create about 50 jobs.