Glencairn advances Bellavista

Glencairn Gold (GGG-T) has begun building its Bellavista gold mine in Costa Rica.

Under the supervision of contractor Sococo de Costa Rica, the first phase of construction will include roadwork, installation of liners for leach pads, creation of process and sedimentation ponds, and ground preparation for the mill, gold recovery plant, and administration building. In all, construction is expected to last about a year and cost US$26 million.

In November, Glencairn raised US$8 million for the first phase via an equity financing involving 13.5 million units (T.N.M., Nov. 26-Dec. 2/03). Negotiations for the remaining capital requirements are ongoing.

The first gold pour is expected before the end of 2004. At full steam, the operation is expected to churn out 60,000 oz. gold per year over a 7-year mine life. Cash operating costs are estimated at US$163 per oz.; total costs, including all royalties, at US$177 per oz. The plan refers to reserves of 11.2 million tonnes grading 1.54 grams gold per tonne.

A similar plan tabled by previous owner Wheaton River Minerals (WRM-T) in 1999 predicted US$62 million in net cash flow (excluding preproduction and financing costs), a 33.2% internal rate of return and a 3.7-year payback period. The net present value is US$11.3 million at a 15% discount rate. The estimates are based on a gold price of US$350 per oz.

Shares in Glencairn were 7, or 6.5%, higher at $1.14 in afternoon trading in Toronto on Dec. 12.