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A small gold miner operating in a remote part of Northern Ireland has secured a cash injection of almost £45m to help develop what it claims is one of the world’s best gold deposits.
Dalradian Resources, which is listed in London and Toronto, said it had applied for permission to develop a mine in the Sperrin Mountains, County Tyrone, leading to the payment from two investment groups.
“This is a big vote of confidence by international investors in Northern Ireland,” said Dalradian’s chief executive Patrick Anderson.
If the project — known as Curraghinalt — gets the go-ahead it could be transformational for one of the poorest regions in the UK, boosting investment and creating hundreds of jobs for the local economy.
Shares in Dalradian fell nearly 2 per cent on Monday but they have risen 17 per cent this year to 82p, valuing the company at £250m. It has about $95m in the bank.
Previous attempts to unlock an estimated 1.4m ounces of gold reserves at Curraghinalt — worth $1.8bn at today’s prices — have failed, in part because of difficulties getting an explosives licence during the Troubles in the 1980s.
Now resistance comes from a different quarter: some politicians oppose plans to use cyanide to extract gold from the mine’s ore and there are wider environmental concerns. Curraghinalt sits in an area of outstanding natural beauty.
Mr Anderson said he expected approval to take about two years because a project of this “size and scale” would also need a public inquiry “which we endorse”.
“We want to be as open and transparent as possible,” he said. “This is the start of a new industry.”
Obtaining planning for resource projects in the UK can be a tricky process. But Cuadrilla, the shale gas explorer, recently received permission to frack in Lancashire and Sirius Minerals won approval to build a potash mine in Yorkshire.
“Sirius got permission to mine under a national park from two local councils,” said Matt Hasson of Numis Securities. He said Dalradian could overcome opposition to its use of cyanide by producing concentrate instead of partly refined doré bars and shipping the material to customers.
Since Dalradian bought Curraghinalt in 2009 it has raised hundreds of millions of dollars, which has been spent on developing more than 2km of underground tunnels and more than 100,000 metres of drilling.
There are 100 people working on the site, a figure that will rise to 350 once mining begins. Mr Anderson said the deposit was expected to produce 100,000 ounces of gold in its first year, rising to 150,000 to 170,000 ounces over 20 years if a drilling programme to identify more reserves was successful.
Mr Anderson sold gold explorer, Aurelian Resources, for about $1bn to Kinross Gold, making tens of millions of dollars for himself and other senior managers.
The company is chaired by Jim Rutherford, a former mining analyst and now a senior non-executive director at Anglo American.