Bellavista Aside,
Glencairn Refocuses on
Nicaragua
With the future of its
Bellavista mine in
doubt, Glencairn Gold
Corp. will refocus
its vision to Nicaragua,
President and CEO Peter
Tagliamonte told the
Denver Gold Forum.
Share prices have
plummeted more than 70%
since the company
announced July 25 that
its Bellavista mine in
Costa Rica was suspended
indefinitely due to the
risk of a cyanide spill
after heavy rains caused
ground movement at the
mine.
Ground creep was first
noticed in May, and the
firm suspended
operations in July when
it noticed hairline
cracks in the mine�s
southeast corner, which
compromised its heap
leaching system,
Tagliamonte said.
"The biggest concern
that Glencairn had when
we discovered that there
was some ground creep
occurring was that it
could possibly comprise
the (heap leach) liner,"
he said. "The creep
itself was not a big
issue. Creep occurs in
Costa Rica all the time
with the heavy rains."
But if the liner was
ripped, there was the
potential for an
"environmental
incident," according to
Tagliamonte.
The liner has been
rinsed and the cyanide
spill risk has since
been eliminated, but
�restarting Bellavista
as a heap leach is
uncertain," he said. "I
don't expect that you
would return to that
operation as a heap
leach."
Tagliamonte said clean
up at the site would
cost in the $2-million
range. The company
currently has $8 million
to $10 million in
salvage value of
equipment. About 35,000
ounces of gold reserves
remain in the ground at
Bellavista.
With that operation in
doubt, Glencairn is
turning to Nicaragua.
Along with its two
producing mines and two
projects in Nicaragua,
the country has
"tremendous exploration
potential," according to
Tagliamonte.
"In light of the
situation that happened
at Bellavista, what
Glencairn is doing is
refocusing its
strategy," he said.
Tagliamonte is
particularly optimistic
about the outlook for
Glencairn's La Libertad
mine in Nicaragua. The
mine is converting from
a heap leach system to a
conventional milling
circuit, which should
boost its output.
"What is exciting about
this is the Libertad was
a 40,000-ounce producing
mine at 38% recovery
(when using the heap
leach)," he said. With
the conventional milling
circuit, production will
jump to 80,000 to 90,000
ounces at 90%-plus
recovery within two
years of operation.
The mill - formerly
owned by Barrick - will
be dismantled from its
current location at the
Getchall mine in Nevada
by the end of 2007. It
will be shipped to
Nicaragua, and
production is expected
to begin in a year and a
half.
"However, there are
tremendous opportunities
to shorten that time
frame," Tagliamonte
said.
A brand-new mill would
cost $50 million and
take three years to
deliver, but the company
considered the "quality
and condition" of the
existing mill and
decided it was a better
buy, he said. The total
cost will be $4 million
for the mill, $4 million
to $5 million for
dismantling and $7
million to $11 million
for reassembly, for a
total of $15 million to
$20 million.
Trading in Glencairn
closed at 16 cents today
on the Toronto Stock
exchange, down 1 cent or
3.03%. The company's
shares have been
declining since it hit a
52-week high of 73 cents
in May.
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