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Scotland’s first commercial gold mine launches in the Highlands

03 December 2020

 

The first gold has been poured at Scotland's first commercial gold mine at Cononish near Tyndrum.

 

Scotgold Resources marked the milestone in the commissioning of the processing plant, with production set to ramp up in early 2021.

 

Attempts to get gold out of the ground in the area began in the 1980s, but the fluctuating price of gold and resource intensive setup have led to financing issues and the site changing hands various times.An accelerated expansion plan is now underway to increase production at the mine to 23,500oz per annum. This is small by global standards, but feasibility studies have shown gold deposits at Cononish to be high-grade - and its rarity as “authentic Scottish gold” has attracted a premium from buyers.The current Phase 1 is targeting an annual rate of ore production of 36,000 tonnes and total gold production of 9,910oz in 2021.

 

Phase 2 will focus on doubling the annual rate of ore production to 72,000 tonnes and more than doubling in average annual gold production to 23,500oz. The company stated that it is fully funded to achieve Phase 2 expansion by May 2022.Scotgold is targeting £178m in pre-tax earnings and £156m pre-tax cash flow.The company anticipates that over the expected nine-year life of the mine it will cost about £25m in capital expenditure and a further £81m in operating costs.Chief executive Richard Gray said: “Our first gold pour is not only a significant milestone in the development of our Cononish Gold & Silver Project, but a milestone on the road to a Scottish gold mining industry.

 

All our personnel have worked tirelessly to make this happen in the face of unprecedented challenges caused not least by the ongoing pandemic and associated restrictions."We look forward to continue working closely with all our partners, as we focus on realising the huge potential of gold mining in Scotland, not just for the benefit of our shareholders but also for the country as a whole," he added.Knowledge of gold deposits in the area grew from surface exploration and diamond drilling, eventually culminating in the excavation of a 900m long exploration adit between 1989 and 1991. In 2002, the Loch Lomond and Trossachs National Park was established and the area surrounding the Cononish mine subsequently incorporated into the precincts of the national park.The project passed through various ownerships, until 2007 when it was acquired by the then newly formed Scotgold Resources.

 

Between 2007 and 2012, Scotgold sought to secure planning permission for the development of a mine, on-site processing plant and tailings management facility. A feasibility study in 2011 concluded that a profitable and safe gold mining operation could be established, then in 2015 Bara Consulting completed an ore reserve estimate and bankable feasibility study.The company adopted an approach which required significantly less capital to bring the project into production at half scale, with a subsequent expansion to full scale to be self-funded.A new planning application was submitted and in October 2018 planning approval was received from the Loch Lomond and Trossachs National Park, with work commencing on site in December 2018.

 

Source: https://www.insider.co.uk/news/scotlands-first-com