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The company mining for gold in the central Scotland has announced plans for an ore processing trial.

Scotgold Resources is targeting "first pour" production of 500 ounces of gold by the end of this year.

It wants to crush 2,400 tonnes of ore which has already been extracted at its Cononish site near Tyndrum.

The relatively low-cost bulk processing trial is to help persuade potential investors to back the larger project.

The company, based in Australia, has had lengthy funding problems, and reports that it still has not secured adequate investment on terms it finds acceptable.

It is claimed that the planned method of crushing ore and gravity-based centrifugal sifting, rather than the use of chemicals, means the initial output can be classified as "ethical".

Market research suggests that its Scottish origins may also command a premium price, it is claimed.

Permission sought

Scotgold Resources is seeking planning permission from Loch Lomond and the Trossachs National Park authority for the new phase of work.

If approved, it will start in May and run for six months. It will require £140,000 worth of new equipment installed in a shed which is already in place.

The stockpiled ore is reckoned to contain 7.9 grammes of gold per tonne, and 39 grammes of silver.

The target is to produce a doré, an impure ingot, including 150 ounces of gold. Further processing of 160 tonnes of crushed ore, which would be carried out off-site, is intended to produce a further 350 ounces.

In recent weeks of stock market turmoil, the international price for gold has risen significantly.

However, the project has been delayed by previous falls in the price of gold, lack of finance, and problems with planning permission.

The company had £446,000 in cash at the end of December. Nat le Roux, the chairman and main shareholder, has promised to fund any shortfall in seeing through the bulk processing trial.

Scotgold chief executive Richard Gray said: "This is the most tangible and exciting development undertaken by the company since incorporation.

"In addition to anticipated positive technical results, the trial will produce an historic "first pour" gold output, sufficient to determine whether there are grounds to review the mine development plan and moreover to establish Cononish as a low-cost, low-risk, near-term production, gold project."