Glamis continues to get pulled down

Glamis Gold continued on its downward slide, as a falling gold price served as just more weight on the Reno, Nevada-based company’s shares.

With assets in Nevada, Guatemala, Mexico and Honduras, Glamis has been one of the more active stocks being traded over gold’s recent bull run its shares have traded between $19.56 and $47.40 since last summer.

But the activity turned in a decidedly downward direction early in the week when the company announced technical difficulties were cutting into its production in both Nevada and Guatemala.

In Toronto on June 8 the company’s shares were off roughly 3% or $1.16 to $37.19 on roughly 1.5 million shares. Since the beginning of the weeks the shares have fallen roughly 12%.

On Tuesday, June 6 Glamis announced that it was lowering its 2006 production guidance to 620,000 oz. of gold at a cash cost of US$190 an oz. from 670,000 oz. at US$160-170 an oz.

Start-up difficulties at its Marlin project in Guatemala due to mechanical problems with the leach tank agitators was given as a main reason.

While the company says start-up issues have largely been addressed, it says frequent agitator failures have led to low process plant availability and reduced gold and silver recoveries.

Glamis says it expects permanent improvements to the processing facility will be finished within two months.

And, it says, gold and silver production has not been lost, only delayed, meaning the impact will be limited to 2006 production.

In addition to Marlin, the company was also hit by lower than expected production at its Marigold mine in Nevada.

Lower production there was blamed on slow leach times and less than expected mining fleet availability.