scotgold is now just a short financing hop awa

http://minesite.com/news/scotgold-is-now-just-a-short-financing-hop-away-from-construction-at-cononish

Scotgold Is Now Just A Short Financing Hop Away From Construction At Cononish
By Alastair Ford

There are no bats in the Cononish adit. This can be stated with a fair degree of certainty, because a bat detector is the first bit of kit that visitors encounter when they walk through the gates and into the lamp-lit darkness. That and some small scale railway kit that former owners Ennex put in when the adit was first blasted out of the rock in the 1980s. Back in those days Ennex had permission to mine, but the gold price was against it. This time round, until very recently, that situation was inverted. The gold price has been running very much in favour of Cononish’s new owner Scotgold, but for much of the last year a new layer of government denied it permission to proceed.

But after a lengthy appeals process the authorities relented, bowing as much to pressure from the local community, which is very much in favour of the mine development, as to Scotgold’s re-jigging of its plans for the Cononish tailings. Permission to proceed has at last been granted. And Chris Sangster, Scotgold’s modest, determined, cigarette-smoking chief executive, has been the subject of much media attention as a result. But perhaps surprisingly, given the left-liberal bias of much of the mainstream media, neither Chris nor Scotgold have been cast as the villains of the piece.



No, this is not a story in which the unremitting forces of industrialism are let loose on an innocent and unsuspecting community. Not here the avaricious mining industry depicted in the recent sci-fi blockbuster Avatar, or, perhaps closer to home for the Scots, in John Buchan’s Courts of the Morning.



Very much the opposite, in fact. Up in the hills around Cononish an eccentric Canadian dons a wetsuit to keep him warm as he scans the pebbly beds of the clear-watered burns for nuggets. Other artisanal workers pan for alluvial gold. Some find it, and some scratch a living. But is it enough to keep the local community of Tyndrum alive? No. Tyndrum needs more. And at one stage Tyndrum was considering leaving the national park to get it.



The BBC recently made a documentary about the planning process for Cononish, in which the community’s advocacy for the project came over very strongly. And if anyone was the villain of the piece it was the redheaded former Greenpeace activist in charge of the agency that originally vetoed the mining application. The official objection was to the size of the tailings facility, but neutral observers couldn’t help but wonder if the Parks Authority had somehow acquired the idea that its remit was to safeguard some 18th century idea of the sublime, rather than to ensure a vibrant and prosperous park in the 21st century.



As Chris runs through a short summary of the exploration potential in the wider area, there’s a timid knock on the door, and a teenaged girl politely asks if there’s any work going. Chris takes her number and says he’ll get back to her. But it must be said, that if permission to mine had been granted a year ago, she might already have a job.



Still, that’s all water under the bridge now. The planning approval was granted in October, and preparations are now well advanced for Scotgold to put together a funding package to build a mine. It won’t be much. Access to the Cononish vein will be attained through the existing adit, and the mining should be fairly straightforward. For anyone who cares to make the trip and turn their headlamp upwards, the vein is there for all to see on show, several hundred yards into the adit, past the turn and the dead end where the Ennex engineers accidentally mined in the wrong direction.



At the moment Cononish boasts a JORC-compliant resource of nearly 180,000 ounces of gold and nearly 500,000 ounces of silver. Those numbers were generated by Snowden in a report compiled back in 2008, in which the consultant noted that the sustained increase in gold and silver prices had taken the gold price to over US$800, and the silver price to over US$15.00. A lot has happened in the world in the short time that’s elapsed since, not much of it good, but most of which has been priced into the current gold price. The company is planning to release an update to market in due course about the precise nature of its plans for Cononish, but Chris is hopeful that construction will get underway early next year, and that before too long he’ll be in pole position to double the UK’s (admittedly modest) gold ouput.



In the meantime, the company’s extensive exploration work on the Dalradian rocks between the Great Glen fault and the Highland Boundary Fault continues. It’s not entirely virgin territory, since RTZ, Goldfields, Caledonia Mining and Ennex have all given the ground a once over. The trouble then was that metals prices didn’t justify the further work, given the difficulty of the terrain – boggy, and often snowbound and icy.



So the hunt is on for the next Cononish. The drillers are progressing from glen to valley, and Chris is upbeat - although he readily concedes that a better geological understanding of the entire area is required before really confident predictions can be made.



But there’s one thing he can now be pretty confident about, aside from the absence of bats – that the Cononish mine will soon be producing gold. The exact timescale has yet to be laid out, but the question now surely arises - will the gold medals for the 2014 Commonwealth Games, to be held in Glasgow, come from a Scottish mine? It’s an intriguing thought.