Prima Columbia Hardwood Inc (fka PCT)

[Bobwins]

This is obviously bad news and the cause of the big drop this morning. Currently -.065 to C$.10.

There must be some kind of internal power struggle going on in Colombia. Prima is doing what it should do, cutting back on expenses until they can get a better handle on the time frames to expect. I still think this is a good idea. The experience and contacts of the principals in Prima is crucial to this operation. I don't think you are going to have some local deciding to go into competition with Prima. Helicopter logging is likely not common in Colombia or very many other places.

I am holding. I think this will pop back up whenever they announce a new permit. Bobwins



Prima Colombia delays Colombia start-up operations

2011-07-14 16:15 ET - News Release

Mr. Donald Hayes reports

PRIMA COLOMBIA HARDWOOD INC. ANNOUNCES DELAY IN START UP OF OPERATIONS

Prima Colombia Hardwood Inc.'s start-up of its operations, which was previously scheduled for the third quarter, has been delayed as a result of delays in obtaining cutting permits from the Ministry of Environment in Colombia.

Until May 18, 2011, the company had been working with the regional government of Choco in the ordinary course of business to obtain cutting permits, including successfully obtaining its first cutting permit for Mecana 1. On May 18, 2011, the Ministry of Environment took over jurisdiction from the regional government of Choco. Subsequently, Prima and the Ministry of Environment have had several meetings and established a working team to process the company's permit applications. Prima was recently informed that the Ministry of Environment had revoked the Mecana 1 permit. The revocation is under appeal. While Prima and the Ministry of Environment continue to work constructively together, Prima is unable to determine with any certainty the expected issuance date of the cutting permits required for the start-up of its operations.

The company and its Colombian advisers fully expect that the permits will be issued but are uncertain as to the exact timing. Cutting permits of this nature are routinely issued in Colombia. However, until such time as the permits are issued, the company has decided to scale back the start-up of its operations. The company will provide temporary layoffs to some staff and is delaying delivery of some equipment and supplies.

"The change in jurisdiction from Choco to the Ministry of Environment has occurred at an inopportune time, just as we are in the final stages of start-up. Had the change occurred six months ago, it would not likely have delayed our start-up," says Donald P. Hayes, chief executive officer. "While the timber agreement with the community of Los Delfines remains in full force and effect, we cannot harvest without cutting permits issued for exact locations within the licence area."

Given the uncertainty of timing in respect of the issuance of the permits and start-up of operations, the company has also delayed the completion of the financing announced on May 27, 2011. The company plans to reduce its monthly cash requirements in an orderly fashion to approximately $600,000 per month in order to preserve the timber opportunity until the permits are obtained. The company has received indications from key shareholders to bridge its cash requirements during this time period and will continue to discuss financing options with third parties.

We seek Safe Harbor.