Glencairn Gold Corporation

Glencairn Gold Corporation

November 09, 2007 08:03 ET

Glencairn Gold Reports Third Quarter Results

TORONTO, ONTARIO--(Marketwire - Nov. 9, 2007) - Glencairn Gold Corporation (TSX:GGG)(TSX:GGG.WT)(AMEX:GLE) reports its financial and operating results for the three and nine month periods ended September 30, 2007 (currency figures in U.S. dollars). The consolidated financial statements along with management's discussion and analysis will be available for viewing on the Glencairn website at The documents are being filed with SEDAR ( and should be available on SEDAR no later than 24 hours from the dissemination of this release.

Recent Developments:

- Bellavista Mine operations suspended on July 25, 2007 which resulted in a $53,797,000 write- down in the carrying value of the assets;

- Gold sales in the quarter decreased to 13,268 ounces compared to 22,787 ounces in the corresponding period of 2006 due to suspension of operations at Libertad and Bellavista;

- Net loss totalled $60.2 million, or a $0.25 per share loss in the latest period, compared to $3.2 million or $0.01 per share loss in the corresponding period of 2006;

- Financing, restructuring and renewed focus on exploration of the Nicaraguan Gold Belt announced;

- Private placement financing closed for gross proceeds of Cdn$26,050,000, of which Cdn$5,672,000 was received and Cdn$19,269,000 is held in escrow and will be released upon shareholder approval expected on November 29, 2007;

- Messrs. Stan Bharti, George Faught, and Joe Milbourne appointed to the Company's Board of Directors; and

- Mr. Stan Bharti appointed Chairman and Dr. Bill Pearson joined the Company as Executive Vice President, Exploration.

"While the suspension of mining operations at the Bellavista Mine due to ground movements had a devastating impact on the Company and our operating results in the third quarter" commented President and Chief Executive Officer Peter Tagliamonte, "the Company will now be starting a new beginning. We have brought together a strong team with a record of success. The significant changes and additions to the Company's Board of Directors and management combined with the successful closing of our announced financing and completion of the restructuring will enable the Company to focus on core assets, undertake an extensive exploration program on our Nicaraguan properties and look for growth opportunities."

Selected Quarterly Financial Information

Three months ended Nine months ended
September 30 September 30
------------------ -----------------
2007 2006 2007 2006
--------- -------- -------- -------

Gold sales (ounces) 13,268 22,787 65,892 63,670
Pre-production gold ounces sold - 339 482 339
Average spot gold price ($/ounce) $681 $622 $666 $601

Average realized gold price
($/ounce) $684 $618 $663 $597
Cash operating costs ($/ounce) $569 $528 $484 $405
Total cash costs ($/ounce) $600 $555 $513 $428
Gold produced (ounces) 13,295 23,106 65,436 62,615

(in thousands, except per share
Sales $9,072 $14,075 $43,682 $38,027
Cost of sales $7,552 $12,026 $31,891 $25,757
Bellavista Mine write-down $53,797 - $53,797 -
Net income (loss) ($60,238) ($3,182)($58,151) $639
Income (loss) per share - basic and
diluted ($0.25) ($0.01) ($0.24) $0.00

For the three months ended September 30, 2007, Glencairn produced 13,295 ounces, compared with 23,106 ounces during the third quarter of 2006. Cash operating costs per ounce sold were $569 during the quarter, up from $528 during the same quarter of 2006. The lower production in the third quarter of 2007 reflects the suspension of mining operations at Bellavista and Libertad. The Company recorded revenues of $9,072,000, on the sale of 13,268 ounces at an average realized price of $684 per ounce. The Company also recorded a $53,797,000 write-down in the carrying value of the Bellavista Mine assets. The Company's net loss for the quarter was $60,238,000 or $0.25 per share. This compares with a loss of $3,182,000 during the corresponding quarter of 2006. The loss from mining operations was $615,000 in the third quarter of 2007 compared with a loss of $881,000 during the corresponding quarter of 2006.

For the nine months ended September 30, 2007, the net loss totalled $58,151,000, or $0.24 per share, compared with a net income of $639,000, for the comparative period in 2006. Income from mining operations decreased in 2007 to $1,632,000 from $4,955,000 in the corresponding period of 2006. Revenue from gold sales in the nine months of 2007 increased to $43,682,000 compared with $38,027,000 in the corresponding period of 2006 as a result of higher gold sales (65,892 ounces in 2007 compared with 63,670 in 2006) and a higher average realized gold price.

Limon Mine

Sales in the three months ended September 30, 2007 were $5,327,000, essentially unchanged from the same period in 2006. The gold sold decreased by 890 ounces or 10% to 7,678 ounces from the same period in the prior year. The decrease in ounces sold was offset by the $70 or 11% increase in the average realized gold price of $694. Production from the Limon Mine during the quarter was 7,992 ounces compared to 8,968 ounces in 2006.

Cost of sales increased by $1,117,000 or 29% to $4,947,000 and cash operating costs per ounce increased by $197 to $644 in the third quarter of 2007 compared with 2006. Production costs were higher due to the increased cost of electricity, fuel and salaries.


During October 2007, the Company announced a restructuring program which includes the following:

- sale of the Cerro Quema property for $6,000,000. Of this amount, $100,000 was received on acceptance of the offer, $400,000 was received on October 31, 2007, and the remaining $5,500,000 will be received in three payments during 2007 and 2008;

- private placement financing for gross proceeds of Cdn$26,050,000;

- changes to the Company's Board of Directors;

- appointment of Mr. Stan Bharti as Chairman and Dr. Bill Pearson as Executive Vice President, Exploration; and

- upon shareholder approval, expected on November 29, 2007, a capital restructuring through a share consolidation on a seven-for-one basis and a change in the Company's name to Central Sun Mining Inc.

The Company believes that these changes, along with our focus on Nicaragua, represent a new beginning on which to build a platform for the future growth of the Company.

Cautionary Note Regarding Forward-Looking Statements: This press release contains "forward-looking statements", within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the future financial or operating performance of the Company, its subsidiaries and its projects, the future price of gold, completion of the financing and restructuring of the Company, estimated recoveries under the milling plan, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital for the mill project, operating and exploration expenditures, costs and timing of the development of new deposits, costs and timing of future exploration, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".

Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; actual results of reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold; possible variations of ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; political instability, insurrection or war; delays in obtaining governmental approvals or required financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled "General Development of the Business - Risks of the Business" in the Company's annual information form for the year ended December 31, 2006 on file with the securities regulatory authorities in Canada and the Company's Form 40-F on file with the Securities and Exchange Commission in Washington, D.C. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities.

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