Scotgold hopes it can reach a compromise over mine plans

THE firm behind controversial plans to open a gold mine in the Loch Lomond and the Trossachs National Park is hoping to strike a deal with members of the park authority's board so as to avoid a time-consuming appeal to Scottish ministers.

• The Cononish Goldmine near Tyndrum

The Scotsman has learnt that Scotgold Resources sought a private meeting with board members on Friday after they had earlier in the week been refused planning permission for the mine in Cononish, near Tyndrum.

It is understood that Scotgold is seeking to agree various changes to its planning application after members of the National Park Authority board narrowly voted against granting approval for the project, by 12 votes to ten.

Sources say that by making several concessions - most likely on the environmental front - Scotgold hopes it will persuade enough members to back the mine, which chief executive Chris Sangster argues could harvest as much as 120 million worth of gold.

If the talks prove successful, it will save Scotgold from launching an appeal to Scottish ministers - a bureaucratic and laborious process that could further delay the project by many months.

Sangster said yesterday: "All options are under consideration at the moment but I can't say much more than that.

"There's a large will within the community to take things forward and we'll do our best to accommodate that. With the park, we will also do our best to accommodate their concerns."

Sources close to the board said the firm had approached them about finding a solution that would obviate an appeal.

A spokeswoman for the Loch Lomond and the Trossachs National Park said: "Scotgold approached us for a meeting to help them consider their options moving forward. We hope that the meeting was constructive but it was confidential and therefore we are unable to make any further comment."

Scotgold, which is listed on both Aim and on the Australian stock market, tumbled by more than 20 per cent last Thursday after it was revealed that planning permission for its flagship project had been refused at a dramatic meeting in Tyndrum late on Wednesday night.

Shares recovered almost 13 per cent on Friday after the firm issued a statement strongly suggesting that it was likely to pursue an appeal. Scotgold argues that the mine would bring a 50m economic benefit to Scotland, including the creation of around 50 jobs in an area of high unemployment outside of the tourist season.

The company has the backing of the local community council, which argues that - like many other rural communities in Scotland - the area is too heavily-dependent on tourism and there are few other employment opportunities for young people in particular. It believes the community will benefit to the tune of 1.5m a year.

However, Gordon Watson, director of planning at the Loch Lomond and the Trossachs National Park, advised in a critical report prior to last week's meeting that planning be refused.

He argued that the mine would damage the landscape in one of Scotland's most picturesque areas while the economic benefits would be "highly dependent on gold prices remaining at their current value".

GOLDEN OPPORTUNITY?

GOLD deposits were discovered in the hills around Tyndrum - now within the Loch Lomond and the Trossachs National Park - in 1984, but previous owners of the Cononish mine were unable to exploit it due to low gold prices at the time.

Scotgold bought the mine from Switzerland-based Oak Consortium in 2007 for 800,000 and believes that gold would only need to remain about $350-$400 (225-258) an ounce for the scheme to be profitable. Prices are currently above $1,000.

However, the park's director of planning fears the project would ruin the "special qualities" of the area - including the walk in to Ben Lui, one of Scotland's most popular Munros.