The struggle to wrest pure gold from Scotland’s rugged rocks
A tiny nugget of precious metal from a new mine is only the start of a modest goldrush. But this is not easy money...
‘This pilot will allow us to prove the gold is there’
AT the end of an exhausting walk up a steep hill track high above the Perthshire village of Tyndrum stands the entrance to a long, dark tunnel. Metal gates prevent unauthorised visitors from entering, although on the face of it there seems little incentive to try. This, though, is Cononish – Scotland’s only working gold mine and the country’s first for more than 500 years. It is the spot where, we are led to believe, the starting pistol is about to fire on the country’s very own modern-day gold rush.
It may not look much like it, but beyond these rusting barriers lie untold riches – a veritable Aladdin’s cave of gold and silver and all there for the taking. The only slight snag is that these precious metals are not stashed neatly in treasure chests or stacked in convenient piles of ingots. They are embedded within the ancient rocks, scattered in microscopic particles through a thick vein in the granite like barely detectible space dust.
Nevertheless, after years of setbacks and delays, an ambitious trial to separate billions of invisibly tiny pieces of gold from thousands of tons of metalliferous ore has finally begun at the Cononish mine. This week, the laborious process of crunching and bashing, sifting and smashing the pale rock using portable equipment based inside two unprepossessing corrugated metal huts yielded Cononish’s very first piece of pure gold.
About the size of a marrowfat pea and scarcely enough to produce a thin wedding band, such a piffling amount would doubtless be scoffed at by any self-respecting metal detectorist as little more than a morning’s work in a Saxon field.
For the mine’s owners, Scotgold Resources, it is just a start. After much drilling and surveying and modelling, the Australia-based firm estimates that by the time the mine is stripped bare in eight years, Scotgold will have extracted more than 200,000 ounces – over six tons – of gold. With a recent upturn in gold prices and an ounce trading this week at just over £1,000, the value of Cononish’s total output will exceed £200million.
‘That’s no chicken feed,’ said Richard Gray, Scotgold’s chief executive. ‘But the even more exciting thing is that within a 15km radius of Cononish, we’ve got 11 other prospects so there’s other hills and other veins which are yet to be tested and explored.’
The company, which is listed in Australia but set up purely to explore for silver and gold in Scotland, has the rights to explore 4,100 sq km of land in the central Highlands.
‘Our early indications are that some of them look as good as Cononish. We could end up with three or four more mines on a Cononish scale, each worth around £200million. That would be really something.’
Mr Gray, 56, has worked as a mining engineer in the vast mines of South Africa and West Africa, whose output of hundreds, sometimes even thousands of tons of gold, dwarves the production at Cononish, in the shadow of Ben Lui.
Of his latest project, which must prove itself within six months or close, he said: ‘In terms of gold rushes, this is not about thousands of people swarming down the glen with their pickaxes and Klondike Pete trying to strike it lucky. This is a small, neat, underground operation, with low operating costs and low risks compared with other parts of the world.
‘At the moment we are processing the ore that has been extracted previously but this pilot will allow us to prove the gold is there and give us the capital to move on to the next phase of making the mine fully operational. Once the mine is operating, it’s very hard to see why it will close early. The question will be how quickly can we find more.’
Other corporate Klondikers are following suit, convinced a recent hike in the price of precious metals, coupled with advances in exploration technology and concerns about the security of supply have turned what was once just the pipedream of prospectors into a viable mining proposition.
The Crown Estates, which controls all of Scotland’s mineral rights, has in the past decade granted lease agreements for exploration for gold and silver in Argyllshire, Ayrshire, Dumfriesshire, Perthshire, Aberdeenshire and the Bor- ders. Cononish has stolen a march on its competitors, although it has been a hard slog.
First excavated in the 1990s, it was bought by Scotgold in 2007 before boundary changes landed the mine inside the Loch Lomond and The Trossachs National Park.
It sparked huge opposition, and it was years before the company secured mining permissions from the park authority after agreeing to a raft of restrictions and a multimillion pound package to restore the site to its natural state once the gold is extracted. It only received the financial green light late last year after boosting its coffers with a new share issue.
At present, just two staff operate the plant, but when the mine fully reopens that number will shoot up to more than 60, including specialist metallurgists. Around 50 posts will be non-skilled locals, badly needed work in a rural economy starved of opportunity.
‘If gold-mining develops into a significant industry, as we hope, then you will see the development of a home-grown skilled workforce just like when the oil and gas industry started,’ said Mr Gray.
Plans are afoot for a gold mining visitor centre and trips to view gold bars being poured. Andrew Riley, the owner of the Tyndrum Inn, said: ‘Something like this would create some well-paid year-round jobs here. We might see an increase in the number of people who come up here to pan gold from the river, which would also benefit the area. There is no downside to this news.’
Local residents are not the only ones expecting a windfall from Cononish, as the mine could transform the fortunes of the Scottish jewellery industry, turning Scottish gold into a must-have fashion item.
Its rarity value, Mr Gray believes, could command a particular premium as customers would know exactly where it came from and that it was sourced ethically.
Scotgold plan to use the Edinburgh Assay Office, which has been testing and hallmarking gold since 1457, to verify Cononish gold before it is refined and sold to jewellers. ‘You would end up with gold of proven Scottish provenance,’ said Mr Gray.
Scott Walters, CEO of Edinburgh Assay Office, said: ‘We need to find out what sort of premium retailers believe that customers will pay for that provenance but we might expect to see 10-15 per cent above the value of standard gold.’
He added that the same would apply to Cononish silver – although much less valuable, there is twice as much in the ore compared with the gold.
Scotgold has been in advanced discussions with upmarket Edinburgh jewellers Hamilton & Inches, holders of the Queen’s Royal Warrant, and Orkney-based jewellery designer Sheila Fleet and hopes to deliver around 100 ounces of refined gold in time for Christmas.
Miss Fleet said yesterday: ‘I know from speaking to my customers that they would be willing to pay extra for Scottish gold.
‘I know American tourists and expats will love it and I hope that Cononish sets the pattern for a series of boutique-type Scottish gold mines who can supply a ready market with enough gold to meet its needs. This
is history in the making and I can’t wait to get my hands on it.’
The gold at Cononish, which is more than 400 million years old, certainly has history. What is now the Highlands once formed part of a mountain belt – the Dalradian supergroup – stretching from modern-day Canada to Scandinavia, sweeping up from Northern Ireland north-eastwards across Scotland.
This mountain belt was destroyed by the collision of tectonic plates half a billion years ago, which joined Scotland and England together.
The gold was concentrated deep underground as granite magma heated surrounding water and forced it to circulate through large faults in the rock.
That superheated water, at temperatures of up to 752f (400c), carried gold, silver and other metals, and deposited them, with quartz, into veins.
The process, repeated time and again for many centuries, eventually created sizeable gold deposits.
Traces of gold are scattered throughout the Highlands, but the difficulty has always been locating it in sufficient concentrations and extracting it cheaply enough without destroying the environment.
Geologist Dr Nyree Hill, of Leicester University, who has been mapping Scottish gold deposits, doubts Cononish will trigger gold fever. She said: ‘Scotland is hugely challenging for gold prospecting. It is hard to find under the deep layers of glacial sediment filling valley bottoms and widespread cover by forestry plantation and peat bog.
‘The mountainous terrain presents severe access problems, with many areas only reachable by walking all day from the nearest road.’
She added that the Highlands’ often extreme weather, varying from torrential rain in summer to gales, snow and sub-zero temperatures in winter would prove a major hindrance to exploration in many areas.
Despite the difficulties, striking gold has been a dream of pioneers for centuries and Scotland has an extensive history of mining valuable metals. Alluvial gold – washed down from the hills in rivers, rather than being mined – was first reported in Scotland in 1245 in Durness by Gilbert, Bishop of Caithness.
In 1540, James V ordered gold should be found to refurbish the Scottish Crown. Soon more than 5,000 panners were hard at work between Dumfriesshire and Edinburgh, their efforts combined with pearls from Scottish rivers.
More recently, Scottish gold – again panned from rivers – was incorporated into the mace of the Scottish parliament.
Scotland has experienced minigold rushes before, in Fife in 1852 and, most notably in 1868, when an army of prospectors descended on Kildonan in Sutherland.
It was sparked by Robert Gilchrist, a local man who had recently returned from a 17-year gold hunt in Australia. He knew that 50 years earlier a large nugget of gold had been found nearby and he quickly struck gold in a tributary of the River Helmsdale.
Word spread like wildfire and 600 prospectors headed for Kildonan. The railway only went as far as Golspie, 30 miles away, but gold fever drove the prospectors on. Two shanty towns grew up, Baile an Or (Town of Gold) on the Kildonan Burn and Carn na Buth (Hill of Tents) on the Suisgill Burn.
The gold rush lasted almost exactly a year, before it was brought to an end by the Duke of Sutherland who, having made a tidy sum from the sale of licences, abruptly banned the practice.
In the Tyndrum area, mining can be traced back as far as the 15th century, when silver was extracted for King James I. More recently, lead and zinc were extracted from the early 1700s into the 19th century at Tyndrum.
But over the last century, metalliferous mining across the UK has dwindled almost to extinction. The Duchess of Cambridge’s wedding ring was made from a batch of Welsh gold gifted to the Queen on her 60th birthday, but the Clogau gold mine in Wales closed in 1998 and nearby Gwynfynydd closed a year later.
Recently, Scottish gold has only been found by amateur panners, including a 0.6oz nugget found in the Lowther Hills by a Canadian on a panning course in June 2015 was said to have been the biggest discovery for 70 years.
Mr Gray said it would be a ‘fabulous’ endorsement if the first new Scottish gold jewellery was bought by an A-list celebrity: ‘Or someone royal perhaps. They have a habit of using Welsh gold, but the trouble is the Welsh aren’t producing any gold at the moment. Maybe we could step in there. We just need Prince Harry not to propose too soon!’
‘We just need Prince Harry not to propose yet’