Gold News

Gold mining shares in turmoil

Canadian mining company Glencairn Gold saw its shares fall more than 18 per cent this week as concerns grew over its mine safety in Costa Rica.

Environmental groups warned of cynadie leaks and of landslide risks at the group's Bellavista Mine in Costa Rica, sparking the slide in the company's shares on the Toronto stock exchange.

Production at Bellavista was halted in July, amid worries that rainfall was causing parts of the mine to slide as much as one centimetre per day, with groups now demanding that mine owners further monitor the security of the mine.

Interamerican Association for Environmental Defense, CEUS del Golfo and Earthworks were among the environmental groups saying that not enough had been done to forestall landslide risks or to ensure that cyanide used to extract gold did not leak.

Market response to the criticisms was rapid, causing Glencairn and other gold mining companies to reconsider production possibilities when mining in countries of less stable environmental or political landscapes.

Africo Resources was another miner suffering recently as shares dropped in response to concerns that the company was likely to lose concessions to work in the Democratic Republic of the Congo.

Costa Rica is not, however, is not known for political unrest or restrictions on activity, but the sliding of earth at Bellavista with ensuing closure and accusations of environmental mismanagement are likely to affect the company's production figures as well as its shares.

It may then be the right time for investing in gold bullion, with mining yields of the precious metal likely to be lowered by problems like those faced by Glencairn Gold.

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