The BarkerLetter

Greetings investors.

I’m tempted to buy Glencairn Gold (GGG.TSX-V), now trading at under $0.20 per share.

The stock price took a steep dive last summer after the company encountered difficulties with its BellaVista heap leach mine in Costa Rica. Apparently flooding in the Pacific coastal region of that country’s southern zone has upped the risk of a rupture in the heap leach pad, and a potential cyanide leak.

Glencairn has said Bella Vista will produce 120,000 ounces of gold by 2009 or 2010 at a cash cost of $350 per ounce. However, the mine is currently closed and there has been some speculation that it will reopen as a conventional gold mine.

I’ve followed the Bella Vista story for some years now. I was particularly interested to observe the government blow hot and cold on the project back when Wheaton River Minerals had it. Getting the permitting was a slow, painful (and expensive!) process for Wheaton, who finally threw in the towel altogether when the country passed a moratorium on open pit mining a few years ago. I was rather curious to see how Glencairn would make out with it.

It seems to me that climate and geography are outweighing the political risks in Latin America these days. I think floods and earthquakes and tsunamis have become real threats to coastal mineral projects around the world.

In the meantime, management has said it will sell its non core assets and work towards commencing operations at two other gold projects in neighbouring Nicaragua. Those are the El Limon (approx. 200,000 oz Au as a probable reserve), and La Libertad (another 400,000 oz, also in the reserve category). To that end Goldcairn proposes moving its recently purchased mill at the Getchell Mine in Nevada south to Nicaragua.

As penny stocks go, Glencairn seems to have a lot going for it. The stock closed down at $0.155 per share today, though the price hit $0.73 earlier this year, and probably will again when they get themselves sorted out.

Looking good!

Kb