Exchange suspends Glencar stock

Shareholders in the gold-mining company, Glencar, expressed their discontent yesterday after learning the company's shares had been suspended on the Irish Stock Exchange following a downward revision of production forecasts for 2000.

Glencar shares were suspended early yesterday and it subsequently postponed an extraordinary general meeting called to approve a €7.5 million (£5.9 million) rights issue to provide working capital for Glencar's Wassa gold mine in Ghana.

The action was taken after it emerged that production forecasts for Wassa may not be reached within the time envisaged.

Glencar chairman Mr Richard Hooper faced a barrage of questions from shareholders who had turned up for yesterday's extraordinary general meeting to vote on the rights issue.

They learned instead that the company was currently attempting to renegotiate loans with its banks and had been approached by a major gold producer interested in taking an equity stake.

Asked by a shareholder about the anticipated production figures for 2000, Mr Hooper said there was some uncertainty as to the figures and independent verification would be required before they could be released. This would take between seven to 10 days, he added.

Mr Hooper said he could not reveal the identity of the major gold producer with which Glencar is in discussion due to a confidentiality clause. But he said the other company approached it before the current difficulties over production emerged. Asked if the equity interest by the gold producer was confined to the Wassa mine in Ghana, Mr Hooper said it might be at any level of operation and he honestly did not know yet.

Speaking to The Irish Times after the meeting, Mr Hugh McCullough, chief executive of Glencar, said the company learned a few weeks ago that its production assumptions may no longer be valid. He said issue relating to the small size of the area where solution is applied to ore at Wassa for leaching to produce gold. Because this area is too small, less leaching solution can be applied to the ore. The result is a delay in production.

However, he said the issue was not one of lost ounces but of timing.

"I have no doubt that all the gold we anticipate getting back is only a question of time," he said.

He said a number of compensatory factors would help the company overcome the present difficulties. These include a newly built $3.2 million (€3.3 million) heap leach area, which he anticipates will result in higher recovery rates from April 1st.

Mr McCullough said the company which had approached it would understand the mining industry and the problems connected with it. There were no firm proposals on the table yet but discussions were based on an equity stake in Glencar or its projects.

He said Glencar could continue all its present operations until the end of the year and the company was currently discussing with its banks "re-jigging its payment schedule".