Bellavista mine operations suspended after ground movement

Vancouver – Glencairn Gold (GGG-T, GLE-X) has suspended all operations at its Bellavista mine in Costa Rica following recent ground movement concerns at the site.

Ground movements of about one centimetre per day have been measured in sections of the leach pad and waste pile at the open pit gold operation.

The issue is thought to be related to water saturation caused by much higher than normal rainfall over the past several years.

What were looking at is really a fairly massive ground movement, stated Glencairn president and CEO Peter Tagliamonte. Its not just affecting the leach pads, but also the waste pile and some of the side of the hill that these are located.

Tagliamonte noted cracks in the stacked ore were noticed in May and were monitored through June and July. The pad is about 400-by-400 metres with the ore stacked up to about 90 metres.

Glencairn has initiated remedial measures including de-watering wells, control of surface water and redistribution of the weight loads.

While the company does not believe a sudden earth movement is imminent, it is concerned that the smaller shifts could cause issues with the sub-liner, liner and drain system on the leach pad. It has ceased the application of cyanide as a precaution.

The company will analyze the situation over the next few weeks to monitor the effect of its measures and what operating impact it will have.

Glencairn recorded 2006 gold sales of 38,830 oz. from Bellavista at a realized price of US$595 per oz. Cash operating costs at the mine came in at US$316 per oz.

Proven and probable reserves, as of the end of 2006, stood at 7.9 million tonnes grading 1.44 grams gold per tonne using a 0.5 gram gold cut-off grade.

The company also operates its 95%-owned Limon mine in northwestern Nicaragua, which had 2006 gold sales of 33,000 oz. The underground mine holds proven and probable reserves of about one million tonnes at 5.3 grams gold.

Also in Nicaragua, Glencairn is advancing its La Libertad gold project where it is converting the former heap leach producer to a milling operation. The deposit hosts an indicated resource of 16.3 million tonnes of 1.5 grams gold.

Shares of Glencairn got beat-up following the suspension of operations news, closing down 28%, or 16, to 41 apiece in July 26th trading on strong volume. The stock has a 52-week trading range of 37-77.