The first gold mine in Scotland is due to open this year

If the operation is successful, it will be the first time ever that the precious metal has been mined in Scotland. Picture: SWNS
If the operation is successful, it will be the first time ever that the precious metal has been mined in Scotland. Picture: SWNS
Share this article
0
Have your say

The Cononish site, near Tyndrum, Argyll and Bute, is being operated by Scotgold Resources, who believe there is up to five tonnes of the lucrative metal in the area's hills.

Scotgold Resources has been working to reopen the abandoned Cononish mine for 12 years, in an area where mining copper and zinc was a lucrative industry.

Scotgold Resources has been working to reopen the abandoned Cononish mine for 12 years, in an area where mining copper and zinc was a lucrative industry. Picture: SWNS

Scotgold Resources has been working to reopen the abandoned Cononish mine for 12 years, in an area where mining copper and zinc was a lucrative industry. Picture: SWNS

The firm has received the necessary funding to buy the excavation equipment needed to start work at the site and claims it will now be able to begin commercial gold production later this year.

Gold can be found in many areas of Scotland, particularly in the Lowther Hills around Wanlockhead, Dumfries and Galloway and Leadhills, South Lanarkshire.

If the operation is successful, it will be the first time ever that the precious metal has been mined in Scotland - although gold panning has taken place in the country for centuries.

Richard Gray, managing director and CEO at Scotgold, said he believes the project will "provide a significant boost to the local economy around Tyndrum".

In the latest raft of funding for the firm, finance provider Simply has loaned the project £323,000, which has been used to purchase equipment - including an excavator, a loading shovel and a dumper.

READ MORE - 'Venomous' mother and son murdered jogger following footpath vendetta

It is hoped that this will give the firm the last push it needs to be fully operational by the end of the year.

Scotgold acquired the Cononish site in 2007 and has embarked on a long journey to bring the mine up to a workable state and start producing the shiny stuff.

Planning permission for the project has been agreed, subject to certain conditions, by Loch Lomond and Trossachs National Park Authority.

While the business also recently renegotiated and extended a secured loan deal with Nat le Roux, its chairman and "major" shareholder.

The loan facility from Mr le Roux, a former chief executive of the IG Group, is said to have increased by up to £1m to £6m.

At one point Scotgold predicted that gold and silver production at the site could reach as much as £17m per year over a seven-year lifespan.

However, this has changed over time due to fluctuations in the price of gold.

Experts think there could be as much as five tonnes of gold to be found in the hills near Tyndrum, encased in quartz which must be dug out and crushed.

Up to 29,000 ounces of precious metals could be mined per year, and the project could create around 60 jobs for local people.

Villagers in nearby Tyndrum, a popular stop on the route north to Glen Coe and Fort William, Scottish Highland, hope to open a visitors centre and to market Cononish gold to tourists.

Scotgold produced its first gold from Cononish several years ago during a bulk ore processing trial at the site.

It was later sold for an average of £4,557 per ounce, a more than three-fold premium on the average gold price of the day.

The mineral was sold in the form of "rounds" minted by Baird & Co Bullion Merchants.

The first round, embossed, like all the coins, with a stag's head, was snapped up by Graham Donaldson, a Scotgold shareholder who lives in Christchurch, Dorset.

His bid of £21,003 was the highest.

READ MORE - British father dies just weeks after suffering a mosquito bite in Sri Lanka

At the time of the sale, he said: "As to what I would do with it now, I would probably look at it and stroke it, and put it in a safe."

Mr Donaldson said he and his wife planned in time to get new engagement and wedding rings made from Cononish gold, to replace the budget rings they bought when they married, which he said are "worn thin".

Scotgold, which also has offices in West Perth, Australia, believes its gold will attract a premium price as a niche product for tourists, jewellers and couples keen on Scottish gold wedding or engagement rings.

The firm also previously announced it had struck a deal with a prominent jeweller to manufacture the first items made from Scottish gold.

Exploration work in another area - the Grampian gold project - is also continuing, with a view to potentially developing sites in the Ochils, Glen Orchy, Glen Lyon, Inverliever and Knapdale under Crown Estate "option agreements".

Ross Pickburn, regional sales manager at Simply, said: "This was an incredibly interesting deal to work on, not least because it was the first gold mine I'd ever helped fund.

"It's great working with a company that produces Scottish gold and a team that is creating jobs in the area.

"We got to know about the needs of the company and were able to structure a deal that worked for all parties."