Gold occurs in some of the least likely expected regions and equally shocking is when it occurs in abundance. One miner is leaving no rock unturned, pushing the barrels of Scotlands backyard hills to gleen off the precious metal in a place of many tales , a country which to date has been known mostly for its coal fields. Gold can be found in many areas of Scotland, particularly in the Lowther Hills around Wanlockhead, Dumfries and Galloway and Leadhills, South Lanarkshire. Scotgold Resources (LON: SGZ), the company aiming to open Scotland’s first commercial gold and silver mine, has earmaked the beginning of commercial production to February 2020 at its Grampian Project located in the Grampian Highlands of mid-western Scotland about 90km northwest of Glasgow.
The company believes there is up to five tonnes of the lucrative metal in the area’s hills and is seeking to resuscitate the previously abandoned old Cononish Mine. According to the company, mine development is currently on schedule and access to ore expected by end 2019. The process plant building and associated civil earthworks are behind schedule, principally due to civil engineering design delay, situations which have forced the company to push its commissioning to February 2020.
Access to ore is still expected by the end of this year, the company said, adding it plans to stockpile gold and silver in the period leading to the official opening. As a result of the delay and other cost re-estimates, the London-listed miner said it had revised its funding requirements to an additional £2.5 million (about $3m).
Richard Gray, the company’s chief executive, told investors, “The combination of the gold price being in excess of £1,200 per ounce, and the pipeline of projects that we anticipate will result from our Grampian exploration work, bode well for the company’s long term outlook.” Scotgold envisions an underground mine with an initial production capacity of 23,500 ounces of gold annually, for up to 17 years with potential to see investors accounts burgeoning with earnings over the lifetime of the Cononish mine. The firm said it had re-estimated its financial model for the mine using a higher gold price, resulting in the expected EBITDA for the project jumping to £147million.
The company, which received initial approval for Cononish in 2018, has been working to reopen an abandoned gold mine near Tyndrum for 12 years. The asset produced its first gold in August 2016 following the launch of an ore processing trial. After the local authorities gave the project their blessing, the company began building a large-scale operation.
The company expects to process around 3,000 tonnes of ore per month in the first phase, which it says will double in phase two. As many as 52 jobs could be created during production, and the firm has offered nearly £500,000 (about $612K) in payments to support the local community of Tyndrum.
The small village is currently a local tourist destination, known mostly for being at a junction of major transport routes.
Scotgold Resources Company Profile (LON:SGZ)
Scotgold Resources Limited engages in the exploration and development of mineral properties in Australia, Scotland, France, and Portugal. The company explores for gold and silver deposits. It primarily focuses on the development of Cononish project located in the Grampian Highlands of Scotland. The company was founded in 2007 and is based in Nedlands, Australia