TORONTO - Glencairn Gold Corp. (TSX:GGG) is pinning its hopes on two mines in Nicaragua by reopening one while improving operations at another in a bid to turn around its fortunes after its stock suffered in recent months due to problems at a gold mine in Costa Rica.
The Toronto-based mining company also said during an investors' update Wednesday it plans to hold monthly updates under its new name, Central Sun Mining Inc.
"What this simple strategy does for Central Sun is it creates a foundation based on two strong operational areas, and that's around the Limon mine and the Libertad mine," said CEO Peter Tagliamonte.
The company's strategic focus will shift to explorations, operations and the reopening of the Libertad mine, Tagliamonte said. Libertad's operations have been suspended for the last eight months.
He also said the company will "continually improve" operations at the Limon mine in Nicaragua. Sales from the Limon mine fell marginally in the last quarter following production delays resulting from mechanical problems.
Glencairn also holds an option to acquire a 100 per cent interest in the Mestiza gold property, 70 kilometres from the Limon mine, from a consortium of "10 to 12" shareholders, Tagliamonte said.
Earlier this month, the Toronto-based mining company, whose mining and exploration activities are focused in Central America, reported its third-quarter profit plummeted after a nearly US$54-million writedown on its Bellavista mine in Costa Rica.
Glencairn Gold, which reports in U.S. dollars, said it lost US$60.2 million or 25 cents per share in the July-September period compared with a loss $3.2 million or a penny per share loss last year.
The company also recorded revenues of $9 million on the sale of 13,268 ounces pf gold at an average realized price of $684 per ounce in the third quarter, compared to revenues of $14 million on the sale of 22,787 ounces at an average realized price of $622 per ounce in the 2006 quarter.
Glencairn Gold fingered the suspension of mining operations at Bellavista and Libertad as the reason for lower third-quarter production. It shut down operations at Bellavista in July after ground movements blamed on heavy rain raised fears of a cyanide spill.
While the company repeatedly denied any leaks and said all the cyanide had been removed from the site without a spill, shares in Glencairn have been under pressure since the ground movements.
The company acknowledged the perception of a possible environmental impact significantly affected its stock price in recent months.
Just before announcing the closure of Bellavista, Glencairn shares traded at 47.5 cents. The stock then fell to a six-year low in August. Before that, the shares hadn't been below 19 cents since April 2001.
Glencairn shares rose by a half a penny to 25.5 cents during mid-morning trading Wednesday on the Toronto Stock Exchange.
Last month, the company announced the sale of its Cerro Quema property for $6 million, and a private placement financing for gross proceeds of C$26 million.
Stan Bharti was appointed as chairman and other changes were made to the board lineup.
The company is also seeking shareholder approval for a capital restructuring through a share consolidation on a seven-for-one basis. The shareholder vote takes place Nov. 29.
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