Glencairn Gold (GLE) Announces Final Litigation Settlement with State of Maine and in Ontario; Company Suspends All Exploration Activities
Glencairn Gold Corporation (AMEX: GLE) has reached a final settlement of litigation in both the State of Maine and in Ontario regarding remediation of the Blue Hill site in Maine.
Under this settlement, Glencairn will pay US$1,000,000 by October 31, 2007 and will be entitled to benefit from the settlement previously reached between Kerramerican, Inc. which operated the former zinc mine in the 1970's and the State of Maine, pursuant to which approximately US$12,000,000 was paid into a single purpose entity established to carry out remediation on the site. Glencairn was joined in a Complaint filed by the State of Maine in 2004 and in turn initiated a court proceeding in Ontario for indemnification under the 1970's joint venture agreement. Glencairn expects to finance this settlement through the sale of marketable securities held by the Company.
As a result of the closing of the Bellavista Mine in July 2007 and the resulting cash flow implications from the loss of revenue from the mine, Glencairn has suspended all exploration activities, reduced the number of employees, cut capital expenditure programs, extended payables where possible, and eliminated discretionary expenditures. Cash on hand and cash flows from operations of the Company's sole operating mine, Limon, are not sufficient to fund the Company's ongoing needs. Accordingly, in addition to the Company's cash preservation plans, which include aggressive cost cutting measures, the Company will require additional funding which may include the sale of assets or equity or debt financing. While the Company has been successful in the past in raising funds, there can be no assurance it will be able to raise sufficient funds in the future.
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