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Gold miner backed to raise £20m for Loch Lomond project

Richard GrayThe company behind the proposed gold mine in the Loch Lomond & Trossachs National Park has moved closer to raising more than £20 million to begin production following the latest independent analysis of its prospects.

A Bankable Feasibility Study (BFS) on the Cononish mine conducted by Bara Consulting confirms the reserves and expected returns over its expected eight-year lifespan.

The report will help Scotgold Resources in its discussions with banks and other institutions to raise up to £24m to begin production in 2017.

This latest data follows earlier assessments on its viability which led the banks to offer indicative terms on debt finance for most of the company’s funding requirements.

In a statement today it says completion of the BFS “facilitates the selection of the preferred finance route and the signing of a mandate with the selected institutions in near future”. It is likely to raise the finance before the end of this year.

Average annual gold production is estimated at 23,370 ounces of gold with peak production in the second year of 28,540 ounces, says the BFS.

Richard Gray, chief executive of Scotgold, said: “The BFS illustrates the robustness of the Cononish Project with the mine profitable down to US$700 per ounce and provides a very solid base for our ongoing discussions with potential project finance providers.

“Once concluded, we look forward to putting this fully permitted project into development and pursuing its strong upside potential, which includes a possible mineral resource extension and the likely price premium for gold with proven Scottish provenance.

Mr Gray told Daily Business in March here that the company had applied to the Scottish Assay office for a Scottish hallmark.

“We would market the gold with a Scottish provenance. People will pay a huge premium for that,” he said at the time.  “The jewellers are biting our hands off.”

Daily Business also revealed that Scottish gold mining veteran Willie McLucas is an investor in Scotgold.

Photo: Richard Gray (by Terry Murden)

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