Glencairn Gold Completes Mine Acquisition From Yamana Gold
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TORONTO, ONTARIO, Jul 06, 2006 (MARKET WIRE via COMTEX) -- Glencairn Gold Corporation ("Glencairn") (TSX: GGG)(AMEX: GLE) and Yamana Gold Inc. ("Yamana") (TSX: YRI)(AMEX: AUY)(AIM: YAU) are pleased to announce that they have completed the previously announced acquisition of the La Libertad gold mine in Nicaragua and a 60% interest in the Cerro Quema advanced gold project in Panama by Glencairn from Yamana. Total consideration for the acquisition was 32 million Glencairn common shares.
"The acquisition of La Libertad and the interest in Cerro Quema achieves two key elements for Glencairn. It offers us an increase in gold production from La Libertad and a new-project pipeline. That pipeline consists not only of the advanced gold project at Cerro Quema, but also the surrounding highly prospective ground at La Libertad. We intend to devote considerable funds to exploration at the three existing mine sites," said Glencairn Chairman Kerry Knoll.
Company President and CEO Peter Tagliamonte said: "Our immediate focus is to assume operations at La Libertad to make the improvements necessary for this mine to realize its full potential, and to capitalize on the synergies inherent in having three operating mines within a five-hour drive of one another."
Glencairn's previously announced private placement of 30 million subscription receipts for gross proceeds of $18 million (see press releases dated June 22 and May 30) is scheduled to close later today. The financing was led by Orion Securities Inc. and included Canaccord Capital Corporation, Dundee Securities Corporation and Blackmont Capital Inc. Upon completion of the financing, the subscription receipts will be automatically exercised into 30 million common shares and 15 million common share purchase warrants. Each whole warrant will be exercisable to acquire one common share at an exercise price of $0.80 until the earlier of (i) two years following closing, and (ii) at the option of Glencairn, the date that is 30 days following provision of notice to warrantholders from the Company that the closing price of its common shares on the Toronto Stock Exchange has been at least $1.20 for 30 consecutive trading days (such notice not to be provided prior to the date which is four months and a day following closing).
Yamana will subscribe for 4.2 million subscription receipts for $2.5 million under the financing. Upon completion of the financing, Yamana will beneficially own 42,022,500 common shares of Glencairn, representing 17.9% of the issued and outstanding shares of Glencairn, and warrants to acquire an additional 2,100,000 common shares. Yamana does not have any present intention to acquire ownership of, or control over, additional securities of Glencairn.
Please note: There is a map available on CCNMatthews' website at the following link: http://www.ccnmatthews.com/docs/ggg0706.pdf
The acquisition of La Libertad and Cerro Quema brings a significant improvement in Glencairn's reserve and resource base. For details of the reserves and resources at La Libertad and Cerro Quema, see the press release of Glencairn and Yamana dated May 30, 2006. To view the release, visit www.glencairngold.com.
Glencairn plans to make significant investment at the La Libertad mining operation to ensure the operation achieves its potential. Yamana had begun a program of additional metallurgical test work and upgrading of the crushing and screening circuit and the implementation of permanent heap leach pads. Glencairn will complete this program to allow the operation to maximize recoveries. The maintenance department and parts inventories will be expanded to optimize equipment availability and efficiency. Glencairn also plans to implement a major pre-stripping program to allow steady-state production rates and optimum stripping ratios. These actions in conjunction with new management are expected to result in significantly better performance. Glencairn is in the process of preparing a technical report in accordance with National Instrument 43-101 including an updated estimate of the mineral resources for the property.
At Cerro Quema, Glencairn plans to initiate discussions with the 40% owner of the property with the goal of advancing the project towards production as soon as possible. At the same time, the Company plans to update the feasibility study completed by a previous owner in 2002 to reflect current costs of goods and services.
Glencairn estimates it will cost approximately US$10 million to complete these improvements and it also plans to commit US$3 million to exploration at the three existing mine sites over the next 12 months.
Glencairn is a junior gold producer that, prior to the Yamana acquisitions, had two mines in Central America, the Limon Mine in Nicaragua and the Bellavista Mine in Costa Rica. Gold production is anticipated to surpass 100,000 ounces this year with the additional output from La Libertad.
Yamana is an intermediate Canadian gold producer with significant gold production, gold and copper-gold development stage properties, exploration properties, and land positions in Brazil and Central America. Company management plans to continue to build on this base through the advancement of its exploration properties and by targeting other gold consolidation opportunities in Brazil and elsewhere in Latin America.
This news release contains "forward-looking statements", within the meaning of the United States Private Securities Litigation Reform Act of 1995 and similar Canadian legislation, concerning the business, operations and financial performance and condition of each of Yamana and Glencairn. Forward-looking statements include, but are not limited to, statements with respect to estimated production, synergies and financial impact of the proposed transaction; the benefits of the proposed transaction and the development potential of Yamana's and Glencairn's properties; the future price of gold and copper; 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 expenditures; success of exploration activities; permitting time lines and permitting, mining or processing issues; currency exchange rate fluctuations; government regulation of mining operations; environmental risks; unanticipated reclamation expenses; title disputes or claims; and limitations on insurance coverage. 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 based on the opinions and estimates of management as of the date such statements are made, and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Yamana and Glencairn to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to: unexpected events during construction, expansion and start-up; variations in ore grade, tonnes mined, crushed or milled; variations in relative amounts of refractory, non-refractory and transition ores; delay or failure to receive board or government approvals; timing and availability of external financing on acceptable terms; the operations of Yamana to be acquired by Glencairn not being integrated successfully or such integration proving more difficult, time consuming or costly than expected; not realizing on the anticipated benefits from the transaction or not realizing on such anticipated benefits within the expected time frame; risks related to international operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic valuations; changes in project parameters as plans continue to be refined; future prices of gold and copper; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in the completion of development or construction activities, as well as those factors discussed in or referred to in the current annual Management's Discussion and Analysis and current Annual Information Form of each of Yamana and Glencairn filed with the securities regulatory authorities in Canada and available at www.sedar.com, and the Form 40-F of each filed with the United States Securities and Exchange Commission. Although management of each of Yamana and Glencairn 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. Neither Yamana nor Glencairn undertakes to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.
Contacts: Glencairn Gold Corporation Kerry J. Knoll Chairman +1 (416) 860-0919
Yamana Gold Inc. Peter Marrone President and Chief Executive Officer +1 (416) 815-0220
Yamana Gold Inc. Leslie Powers Director, Investor and Public Relations +1 (416) 815-0220
Glencairn Gold Corporation Olav Svela VP, Investor Relations +1 (416) 860-0919
SOURCE: Glencairn Gold Corporation and Yamana Gold Inc.