Tyndrum gold mine firm raises £900,000 to fund plans

SCOTGOLD Resources, the company looking to open Scotland’s only commercial gold mine, has raised some £900,000 through a rights issue to help fund its plans.

The cash raised will help pay for planned development of the old Cononish mine near Tyndrum in the Loch Lomond and the Trossachs National Park where a planning decision is expected within weeks. Shareholders took up 87 per cent of the rights under the share issue by the Aim-quoted company which yesterday said it was “pleased with the level of support” shown by investors.

Last month, Scotgold re-submitted its planning application to start extracting ore at the Cononish site with a decision expected on 25 October.

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The company said the new application, following detailed talks with planners, included changes designed to reduce waste from the mining process and to lessen the impact work at the mine will have on the surrounding landscape.

Scottish Natural Heritage said it had objected to the planning application but added that it believed the issues raised “can be overcome”.

It added that it had asked for further information to demonstrate how wildlife and habitat in the area can be protected and said it expected that impact on the environment could be avoided through conditions or modifications to any planning permission.

Scotgold’s first application to mine at Cononish was refused last year on the grounds that the potential economic benefits could not be balanced against conservation concerns.

Chief executive Chris Sangster believes the mine could produce 20,000 ounces of gold and 80,000 ounces of silver per year.

The firm – which is also involved in exploring for gold in the north west Highlands – says that as much as £80 million in economic activity will be generated on the back of the development of the Cononish mine. The price of gold has doubled since Scotgold’s 2009 study into the viability of the mine.

Shares in the firm closed unchanged at 3.62p.