Scottish gold project divides then unites rural community (Part 1)

Tyndrum, a tiny village of around 160 people in Scotland’s Grampian Highlands, sits at the northern edge of the Loch Lomond and Trossachs National Park on the side of a highway.

There is nothing particularly special about the town. Like many rural communities in Scotland, and indeed many rural communities throughout the world, it lacks any substantial industry and has fallen on hard times. Aside from a few seldom-used walking trails in the area and some sheep farming, Tyndrum now mostly serves as a rest stop for travelers from Glasgow, 90 km southeast, on their way to someplace better.

Over the past year, however, the village has found itself at the centre of a long-established argument between environmental conservationists and a mining company, and has emerged as a welcome symbol for the way forward.

Tyndrum Gold

Since 2007, Australia-based junior gold explorer ScotGold (SGZ-L, SGZ-A) has been advancing a small underground gold project in the hills surrounding Tyndrum. Named Cononish, the high-grade gold-silver deposit was first discovered nearly 30 years ago after local farmer John Burton, who runs a small flock of about 200 sheep, found gold there while panning in a nearby stream. Ennex International and Caledonia Mining subsequently advanced the project nearly to production in the 1980s and 1990s, developing an underground adit roughly 1,280 metres before low metals prices made the project uneconomic.

According to a recent BBC documentary on the town filmed and directed by Richard Macer, Burton is still waiting for the project to bring prosperity to the town, like most of the other residents. This time, they hope things will turn out differently. Should the project go ahead, the town council has grand plans to build a state-of-the-art mining interpretation centre, attracting visitors interested in seeing Scotland’s only gold mine. Hoping to cash in on the coming action, one member has even crafted a limited edition whiskey from the area, a 15-year-old speyside single malt called Tyndrum Gold.

Standing in the way of the proposed mine, however, is the Loch Lomond and Trossachs National Park Authority, which in October 2010 refused to approve an initial application from ScotGold to reopen the mine. Created along with the national park seven years ago, the park authority cited the visual impact of the 830,000-tonne tailings facility as the “main showstopper” behind its refusal.

“Will the mine rejuvenate a poor rural community,” asks the BBC’s Macer, “or will it devastate a beautiful tranquil glen?”

A question of stakeholders

The Tyndrum conundrum is in many ways conventional. While the vast majority of townsfolk support the mine, various groups of people from outside the community are fervently against it, such as the environmental conservation group Friends of Loch Lomond.

They say ScotGold’s proposed five-storey-high tailings wall will blight the pristine landscape in an area that has already been designated for protection. While the mine reclamation plan notes there will eventually be vegetation covering it, the environmentalists argue the structure will remain unnatural, retaining a linear, engineered shape in an area of gently rolling hills. 

ScotGold contends opening the mine will bring many economic benefits to people of Tyndrum, creating around 52 full-time jobs, increasing tax revenues and dramatically upping spending on local businesses and supplies, as well as other indirect benefits. With a preliminary initial capital cost of around £12.5 million, the company hopes to produce 21,000 oz. gold and 80,000 oz. silver annually from the mine for at least 8 years, at operating costs of approximately £229 per oz. gold after byproduct credits (US$350 per oz.).

ScotGold’s plan is to extract ore from the Cononish gold-silver vein, a steeply-dipping quartz vein up to 8.3 metres wide but with an average width of about 2 metres. The vein already has a known vertical dimension of about 500 metres and has been traced along strike for over 1 km, with about 590 metres of the existing underground adit driven on the vein.

To the dismay of Tyndrum’s villagers, however, the Loch Lomond Park Authority agreed with the environmentalists, rejecting ScotGold’s application last year by 12 votes to 10. It said it had to give the park’s long-term conservation greater weight than the potential short-term economic benefits of a mine.

Tomorrow, Part 2 of the Tyndrum story looks at how the company and community came together to reapply for park authority approval.