SAN JOSE, Costa Rica Toronto-based GLENCAIRN GOLD will start construction of its Bellavista gold project in Costa Rica as soon as it closes a US$7.8-million private placement with a syndicate of underwriters led by Orion Securities.
"Initial work will involve putting in the heap leach plastic liner and doing earthworks before the rainy season starts in May, with a price tag of about US$7.5 million," said Glencairn CEO (and former editor of CMJ) Kerry Knoll. Over the last year, the company has spent US$400,000-500,000 for site preparation, including building access roads and installing power lines, he added.
Glencairn will have working capital of US$20 million, of which US$16 million will be in cash, following completion of the private placement with Orion Securities, said Knoll, noting the funds would also be used for general corporate purposes.
Glencairn is currently arranging bank financing for US$20 million to fund the balance of the US$26 million required to build the open pit mine, he said. The banks concerned have already visited the site, the term sheets have been issued and the deal should close early next year, according to Knoll.
Bellavista, in the Montes de Oro region of Puntarenas, 70 km west of the Costa Rican capital San Jose, has proven and probable reserves of 11.2 million tonnes grading 1.54 g/t Au or 555,000 ounces of contained gold. It is expected to produce 60,000 ounces of gold yearly over seven years from early 2005 at a cash operating cost of US$163/oz.
Separately, Glencairn announced that it has appointed David Loder as general manager of the Bellavista project.