Following a decree banning open pit mining by Costa Rica’s newly elected President Abel Pacheco, Glencairn Explorations (GLJ-V) has decided not to proceed with the acquisition of Wheaton River Minerals‘ (WRM-T) Bellavista gold project.
Just last week, Glencairn said that the decree did not appear to affect the Bellavista low-grade gold deposit, and that it would confirm that rights to the mine would be maintained before proceeding with the purchase.
Glencairn was to acquire the project by issuing 4 million shares and paying $500,000 in cash. Also under the deal, Wheaton would be granted a three-year option to buy 4 million Glencairn shares at 60 apiece. It would also have an option to buy up to another 2 million shares at $1 each for three years.
In the end, Wheaton would be left with a 21.2% stake in Glencairn. That would climb to 40.3% on Wheaton exercising all of its options.
Bellavista, which centres on an epithermal gold-silver deposit, hosts 11.2 million tonnes grading 1.54 grams gold per tonne. This is sufficient to yield 60,000 oz. annually over more than seven years at a total operating cost of US$179 per oz.
Capital costs are pegged at US$28 million.
The project received all necessary environmental approvals in Feb. 2001.
Glencairn says its continues to evaluate several other potential acquisitions.
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