The stunningly beautiful Loch Lomond & The Trossachs National Park in Scotland is a must-see. It is located at the base of the Highlands in the southwest.
Under this serene, mysterious landscape is a high-tech industrial complex worth multimillions of pounds. Here, men and women work all night to find gold.
Yes, they have gold in them thar hills. Scotgold Resources, which holds the mining rights to the area, believes that there is a lot in the Cononish mine beneath the national park.
Phil Day, Scotgold’s chief executive, claims Cononish is the most valuable gold mine he’s ever seen in his 25-year career.
Day was living a happy life as a peripatetic mining engineer when two years ago he received a call from Nathaniel Le Roux (City stalwart) and Peter Hetherington.
Hetherington and Le Roux were both once bosses at the trading platform IG Group. After he took over the recapitalisation of Scotgold in 2014, Le Roux, a Scotgold shareholder, was born in Edinburgh.
Scotgold’s non-executive chairman Le Roux has resigned last year. Hetherington will replace him, but Le Roux remains as a non-executive director.
Day said: “I was actually working as a mechanic in Nevada when Nat asked me to visit a mine in Scotland. I went underground, and I was amazed at the richest mine I had ever seen. A few months later, I signed up.
Although the mine was established in the 1700s, it has only been used intermittently throughout the years. It was used primarily for lead mining during the 1920s and for a short time in the 1960s.
Day states that it was surprising that gold was found in this region. However, the industry knew that the area has a history of metal geology.
Day explained that the Dog Bay geological faultline is the reason the national park is located on it. The Dog Bay line runs from Nova Scotia to Northern Ireland and Scotland and ends in Scandinavia. It has a history rich with gold mineralization.
It is estimated that the mine contains 550,000 tonnes of gold. The company announced last week that it produced 2,004 ounces of gold in the third quarter. This is consistent with previous downwardly revised figures due to delayed mechanical upgrades at the mine. The company claims that fourth-quarter production will rise to between 3,000 and 3,900 ounces and that the mine is on pace to produce 23,500 ounces per year. This amounts to approximately $37.5 million annually (PS33 million) based on current prices.
Since it briefly broke the $ 2,000-an-ounce barrier in January, gold has fallen almost 25%. Day claims that the business is not affected by the market’s price.
He said, “The price fall must be seen in the context of sterling’s strength against the dollar.” Another way to put it, since the currency is strong right now, we are paid in US dollars for our gold. This makes it a natural hedge for us, as most of our costs are in sterling.
This effect will be countered if the dollar begins to fall and gold rises. But, if both are up simultaneously it’s a win-win situation for us.
Scotgold makes gold concentrate and dore bars. It sells concentrate for copper production and markets single-mine “Scottish Gold” to the jewellery trade. It is also looking to make its own Scottish gold coins.
It is obvious that the mine’s location presents many technical challenges. The mine is located halfway up a mountain and has many restrictions due to its location in a national park.
Day says that the park authorities hold us to a higher standard than any other mines I have worked in. It works and anyone can see the impact of our actions on the site. We don’t have to use any chemicals that cause soil damage like other operations. In fact, we are the only cyanide-free producer of gold in the world. We have invested a lot to ensure that our operations are environmentally responsible.
Scotgold’s 90-strong workforce is a result of Scotgold’s lack of hard-rock mining experience, despite Scotland’s long history.
“About 50% of our workforce are from Scotland and the rest (and most of our management) are foreign nationals with experience in hard-rock mining. Although UK mining has been traditionally soft-rock, we do have some miners from Yorkshire and Devon. We also have a great training program that allows us to hire local people and train them as miners.
Are we in the early stages of a Scottish gold rush?
Day says, “The resource is amazing.” The downside to the resource is its size. However, we have plenty of time and the right geology to find more in the region.
“The quality of our ore has been exceptional and it is possible that the size of the mine could increase over the next few years.” We are looking to grow our workforce and become the preferred employer in the area — to create something here for future generations.
