'Significant milestone' for new gold mine in Scottish highlands
Scotgold Resources (ASX:SGZ ) said on Monday it has reached a "significant milestone" in its quest to restart mining at its high-grade Cononish gold and silver project at Tyndrum in Scotland.
Scotgold, which is listed in Australia and on London's venture market, will soon start processing a portion of a stockpile of approximately 7,000 tonnes of ore at the site near Loch Lomond inside the borders of the Trossachs National Park to pave the way for full-scale mining. The processing equipment is being shipped from South Africa this week to be installed at the project.
The fully permitted project is around 1 kilometre inside the park boundary and was first tunnelled in the 1990s. Scotgold bought the Cononish site in 2007. It boasts reserves of 198,000 oz Au and 851,000 oz Ag. Grade 11.1 g/t Au and 48 g/t Ag according to a May 2015 updated study.
“100 per cent Scottish gold” could command a “significant premium”
Scotgold is targeting production of around 20,000oz of gold and 80,000 oz of silver annually for eight years with total production of 175,000 oz gold and 639,000 oz silver. Capital outlays for the Cononish project including life of mine capital development is a modest US$34 million and according to Scotgold average life of mine operating costs a mere $523 per ounce.
Chief executive Richard Gray told the Financial Times the company would "capitalize on the market for jewellery and souvenirs among visitors to the Highlands" adding that “100 per cent Scottish gold” could command a “significant premium”:
“This will get people holding the gold bars and saying ‘This came out of the mine last week’,” Mr Gray says. “It will have an impact.”
Scotgold, worth US$12 million in Sydney, is also undertaking exploration activities on its land position outside the park at the River Vein prospect and at its Grampian gold project with more than 4,000 square kilometres under option.
The closing of the last coal operation notwithstanding, mine development in the UK has undergone something of a revival recently.
Last week a Vancouver-based junior announced the acquisition of 26 past producing tin mines in Cornwall. Wolf Minerals’ Drakelands tungsten and tin mine located in the county of Devon recently started operations while the development of Dalradian Resources’ Curraghinalt gold project in Northern Ireland is also advancing. Then there's Sirius Minerals’ York project in North Yorkshire which is up to the definitive feasibility stage for a large-scale 20 million tonnes per annum potash mine.