25 Oct 2011 15:20
25 October
Scotgold Resources Limited
("Scotgold" or the "Company")
Planning approved at Cononish
The Directors of Scotgold Resources Limited are pleased to announce that the National Park Authority Board (the "Parks Board") has voted in favour of granting planning permission for the Cononish Gold and Silver project. The decision follows the recommendation of the Executive Director of Planning and Rural Development of the Loch Lomond and Trossachs National Park (the 'Executive Director').
The recommendation to grant is subject to concluding a number of legal agreements and outstanding issues with the Executive Director which the Company expects to be finalised satisfactorily.
Scotgold's Chief Executive Officer, Chris Sangster commented:
"We are delighted with the decision from the Parks Board in approving the Executive Director's recommendation. This represents the culmination of three years' detailed work towards planning a mining development which meets the exacting environmental standards required by the National Park Authority. The Cononish Project provides a significant commercial opportunity in the interests of all stakeholders, in particular the local community which has been a keen supporter for a development that promises increased local employment and economic activity.
"The Company and its agents have enjoyed a close working relationship with the National Park Authority, particularly over the past year following the negative planning decision in August 2010. The Scotgold Board would like to acknowledge the significant assistance and contribution from the National Parks Authority, their advisors and other consultees, whose constructive collaborative approach has served to guide a number of key aspects of the application."
The Company will make a more detailed release regarding the project in due course.
For further information:
United Kingdom:
Scotgold Resources Limited | Westhouse Securities Limited | Bankside Consultants |
Chris Sangster (CEO) | Richard Baty / Petre Norton | Simon Rothschild |
Tel: +44 (0)1838 400 306 Mobile: +44 (0)77 2562 9509 | Tel: +44 (0)20 7601 6100 | Tel +44 (0)20 7367 8888 |
Australia:
Scotgold Resources Limited | Professional Public Relations |
Shane Sadleir (Non-Executive Director) | Karen Oswald |
Tel: +61 (8) 9428 2950 Mobile: +61 (0) 411 704 498 | Tel: +61 (8) 9388 0944 Mobile: +61 (0) 423 602 353 |
Forward Looking Statements:
This release includes certain "forward looking statements." All statements, other than statements of historical fact, are forward looking statements that involve various risks and uncertainties.
There can be no assurances that such statements will prove accurate and actual results and future events could differ materially from those anticipated in such statements.
Background
1 Scotgold Resources
·; Scotgold Resources is a mining exploration and development company listed on the Australian Securities Exchange in January 2008 and the AIM market of the London Stock Exchange in the UK in February 2010.
·; The Company was formed with its sole focus on exploring for gold and silver in Scotland, with the already identified Cononish Gold and Silver Project as its core asset. Once in production, the Project will be Scotland's first commercial gold mine.
·; Scotgold acquired the Cononish Gold and Silver Project in 2007 and has been working towards bringing the project to production in conjunction with its ongoing exploration efforts at Cononish and in the south west Grampians.
·; In January 2010 Scotgold lodged a planning application to revise and extend planning permission for the mine as the extant permission had lapsed. The application was narrowly refused by the Loch Lomond and the Trossachs Board in August 2010, despite overwhelming community support, and the Company lodged an appeal with Scottish Ministers in November 2010.
·; Following positive discussions with the Park's Authority regarding the main issues and concerns raised in the refusal (landscape and visual impact), Scotgold submitted a Proposal of Application Notice in December 2010 indicating their intention to reapply. Following further discussions with the Park's Authority in early 2011, the Company decided to withdraw its appeal in April 2011 and focus its efforts on the revised proposals in the new application.
·; In April 2011 Scotgold announced that it had accepted an offer of a Regional Selective Assistance (RSA) grant from economic development agency, Scottish Enterprise, of up to £600,000 for the establishment of mine facilities and job creation, conditional on the firm obtaining planning permission.
·; In July 2011 Scotgold submitted its reapplication for planning permission, which was granted in October 2011
2. Cononish Gold and Silver Project
·; The Cononish Gold and Silver project consists of the establishment of a small underground mining operation with associated processing facilities and infrastructure. In production, it is estimated the mine would produce around 20,000ozs of gold and 80,000 ozs of silver annually.
·; A scoping study on the Cononish Project completed by Australian Mining Consultants Ltd (AMC) in mid 2009 indicated positive returns using a gold price of US$ 720 / oz (GBP£450 /oz). At the current gold price of around US$ 1800 / oz (GBP £1100 / oz), the Project has the potential to generate significant cashflows for the Company. Based on this 2009 study, at a gold price of US$ 1270 / oz (GBP£800 / oz), the Project would generate around US$ 87 million (GBP £55 million) free cashflow over its lifetime. Scotgold is in the process of updating this study prior to a production decision, subject to the finalization of planning permission.