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October 1, 2007
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Glencairn Reviewing Financing Alternatives and Announces the Sale of the Cerro
Quema Project
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TORONTO, ONTARIO--(Marketwire - Oct. 1, 2007) -
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
Glencairn Gold Corporation (the "Company") (TSX:GGG)(TSX:GGG.WT)(AMEX:GLE) announces that it is in discussions on a restructuring of the Company and possible financing alternatives which may include equity financing and changes to its capital structure. Glencairn intends to move forward with its Libertad Project and to focus its exploration efforts along the Nicaraguan Gold Belt where it holds a substantial land package. There is no assurance that any financing will be completed on terms acceptable to the Company, if at all.
The Company also announces that, as part of the restructuring program, it has entered into a letter of intent with Bellhaven Copper & Gold, Inc. to sell its interest in the Cerro Quema advanced development project located in Panama for aggregate consideration of US$6 million, payable as follows: (i) an initial payment of US$100,000 was paid upon entering into the letter of intent; (ii) US$400,000 at closing of the transaction; (iii) US$2,500,000 within 30 days of the closing; (iv) US$1,000,000 on June 30, 2008; and (v) US$2,000,000 on December 31, 2008. This sale is expected to close on or about October 31, 2007, and is subject to customary conditions, including definitive documentation and receipt of all requisite regulatory approvals. The sale of this non-core asset will provide the Company with additional funds to focus on its mining and exploration properties in Nicaragua.
"Glencairn is currently studying options to refocus and reenergize the Company in a manner that will bring maximum value to shareholders," said Peter Tagliamonte, President and Chief Executive Officer. "The sale of Cerro Quema was the first step in our strategy to concentrate our efforts on core operations and exploration assets in Nicaragua."
The suspension of operations at the Bellavista Mine continues as the Company completes thorough technical investigations. The Bellavista Mine site is being monitored and maintained with environmental integrity as a foremost consideration. In connection with this ongoing review, the Company has determined that there has been an impairment of the carrying value of the Bellavista mine assets and accordingly, will be recording an impairment charge, in the magnitude of US$40 to 50 million, in its financial results for the nine months ending September 30, 2007.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
About Glencairn Gold Corporation
The Company is a gold producer with mining and exploration activities focused in Central America. The Company operates the Limon Mine in Nicaragua and plans to convert the Libertad Mine in Nicaragua to conventional milling which will facilitate the expansion of annual gold output. It also holds a 100% interest in the Mestiza gold property, located 70 kilometres from the Limon Mine. The Company focuses on efficient productive mining practices to establish a firm base of quality to enhance profitable mining operations. Glencairn is committed to growth by optimizing current operations expanding mineral reserves at existing mines and exploring the potential of its mineral land holdings.
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, 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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