Plans for gold mine in Scotland

The gold market has been thriving in recent years

An Australian company has announced plans to begin mining for gold in Scotland.

Scotgold said it intended to fast-track plans to become the country's most significant gold producer after listing on the Australian Securities Exchange.

The company, which bought Cononish mine in Tyndrum in May last year, has raised millions of Australian dollars to begin operations.

The site is known as a gold deposit but has never been commercially mined.

Scotgold bought the mine, 90km north of Glasgow, and other exploration licences from Fynegold Exploration.

Their exploration rights cover 2,200 sq km of Central Scotland, making the firm eager to start operations on a number of gold prospects, including ready-to-drill targets along the Tyndrum Fault Zone in Glen Fyne.

Scotgold's non-executive chairman Shane Sadleir said the time was right to begin operations in Scotland.

'Jewellery manufacturers'

He said: "Much of the hard work has already been done for us, with the previous owners carrying out exploration on the project over some 15 years.

"Exploration work was also done on diamond drilling and the construction of a 1.2km tunnel along the vein, culminating with planning approval for a small mining operation of 25,000 ounces of gold per annum in 1996.

"A downturn in the gold price shortly after saw the project placed in care and maintenance for the next 10 years."

The gold market has been thriving in recent years making exploration of the Cononish mine viable again.

Scottish gold is amongst the most expensive in the world because of its rarity.

Just a gram of it can cost more than five times the price of normal gold.

Mr Sadleir added: "The successful implementation of gold mining operations would represent only stage one of an ambitious project for Scotgold.

"Unlike most other gold mining companies in the world, we hope to add value to the uniquely Scottish nature of the gold produced and intend to have early discussions with a number of local jewellery manufacturers."