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Scotgold Resources expects mining licence for Cononish project in May 2012

Last updated: 23:04 31 Jan 2012 AEDT, First published: 00:04 01 Feb 2012 AEDT

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Scotgold Resources (LON:SGZ) expects to receive a mining lease for the Cononish gold and silver project in May this year.

Prior to that, by mid-March, mining consultants AMC should have completed the project development study, the group said in a quarterly update.

The Cononish project lies at the northern edge of the Loch Lomond and Trossachs National Park north of Glasgow.  It has a JORC resource of 154,000 ounces of gold and 589,000 ounces of sil­ver across the mea­sured, indi­cated and inferred cat­e­gories using 3.5 grammes per tonne gold cut-off.

Following three years of detailed work towards planning a mining development which meets the exacting environmental standards required by the National Park Authority, Scotgold was given planning permission from the body for Cononish at the end of October 2011.

Since the approval, Scotgold has engaged with the Park Authority to finalise conditions and legal agreements, and negotiations are nearing completion. Once concluded, the authority is expected to issue a decision notice in mid February, which will set off a three months judicial review period after which the Crown Estate can issue the mining lease.

The company continues to conduct exploration activities on its substantial land position outside the National Park.

At the Grampian gold project, regional fieldwork including ongoing stream sediment sampling continued over the three months to end-December 2011 over the Inverliever, Cononish-Glen Orchy and Glen Lyon licence areas. A total of 573 sample results have now been received and interpretation is on-going.

Reprocessing of British Geological Survey aeromagnetic and gravity data over areas of the Grampian project area is nearing completion and results are pending.

The civil aviation authorities still have not approved the planned airborne magnetic survey, and Scotgold is considering alternative arrangements for an airborne survey.

Only last week, the company reported encouraging results from the first two deep drill holes at the River Vein prospect near Loch Lomond. The prospect is located outside the National Park around 5 kilometres from the Cononish Vein.  Scotgold is still waiting to receive assay for two more holes that were drilled on the River Vein.

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