(Updates with closing share price in final paragraph.)
Oct. 26 (Bloomberg) -- Scotgold Resources Ltd. aims to start extracting gold and silver from Scotland’s first commercial gold mine in 2013 after gaining planning permission at the second attempt.
The Australian mining company expects to start developing the mine at Cononish in Scotland’s Loch Lomond and Trossachs National Park in the first quarter of next year, Chief Executive Officer Chris Sangster said in a telephone interview today.
“We will continue to look for more gold north and west of the park,” Sangster said. “Cononish is only about 1 kilometer (0.6 miles) inside the boundary.”
Scotgold Resources is seeking to benefit from soaring precious metals prices. Gold for immediate delivery in London has surged 57 percent to more than $1,700 an ounce in the past two years. Silver prices have almost doubled to $33.76 an ounce over the same period. The mine is expected to yield 21,000 ounces of gold and 83,000 ounces of silver annually from extracting approximately 72,000 tonnes of ore, according to a statement published on the park’s website.
The company got permission yesterday from the park authority to reopen the abandoned mine on a hillside at Cononish, near Tyndrum. The authority rejected an original plan last year because of concerns about the size and shape of the waste management facility and poor restoration proposals.
“We understand that there will be a temporary loss to Glen Cononish’s special character,” Linda McKay, chairman of the National Park, said in the statement. “We have greater confidence that we can secure both long term conservation gain and economic benefits to the local economy and Scotland.”
The mine is expected to create 52 jobs over 10 years and contribute 80 million pounds to the Scottish economy.
It will take about a year before the mine is ready and cost about 15 million pounds ($24 million) to develop, said Sangster.
Scotgold shares, which had risen 90 percent since the beginning of September through yesterday, slumped 20 percent in London trading, the most since August last year, closing down 1.5 pence at 5.88 pence.
--Editors: Tim Farrand, Peter Branton.
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