Glencairn suspends operations at Raw Bean diamond mine

Toronto-based Glencairn Explorations (ASE) has suspended operations at the Raw Bean diamond mine in Brazil after being hit with a 60% increase in non-fuel production costs and 100% increase in oil and other costs. Although Glencairn was expecting its first profit from Raw Bean in September, rising world oil prices, chronic inflation in Brazil and a tight government monetary policy have combined to make the mine unprofitable.

Until the oil price increase, the mine was breaking even at an average production rate of 100 carats per week. Glencairn originally planned to increase production to 200 carats per week by year-end.

While costs have increased, production has been lower than expected. The diamond-bearing gravel horizon, which appeared to be at least one metre thick in surface drilling samples, has averaged only 0.5 metres.

Raw Bean will be maintained on a care-and-maintenance basis until the economic situation improves sufficiently.