July 22, 2010 / 2:14 PM / 9 years ago

UPDATE 1-Pacific Rim raises going concern doubts

* Says El Dorado project in El Salvador under cessation

* Says no exploration at El Salvador until it gets permits

* Says has no source of revenue


July 22 (Reuters) - Troubled Canadian explorer Pacific Rim Mining Corp PMU.TO said its ability to continue as a “going concern” is dependent on its ability to obtain additional funding. The company, which has no source of revenue and has had negligible sales for the past three years, said its primary asset El Dorado gold project in El Salvador was put on cessation in July 2008 following opposition by anti-mining activists.

El Salvador’s left-leaning President Mauricio Funes wants a total ban on mining and refuses to recognize permits granted by a previous business-friendly administration for a contentious gold project in one of the country’s poorest regions. [ID:nN02135545]

The company had filed for international arbitration last year, seeking that the government return at least $77 million in investment due to the delays imposed on its project, alleging violation of the US-Central American Free Trade Agreement (CAFTA).

The company, which is in dire need of funds for ongoing exploration and to cover arbitration costs, said it will continue to curtail its exploration programs in El Salvador until it receives environmental permit and exploitation concession.

“There is no assurance that sufficient funds will be available to the company in the future,” Pacific Rim said in a statement.

For the year ended April 30, the company reported net loss of $5 million, or 4 cents a share, compared with $6.3 million, or 5 cents, last year.

As on April 30, the company had cash and cash equivalent of $1.33 million and current liabilities of $1.6 million. The company has a liability of about $1.1 related to the CAFTA action.

“The company plans to obtain additional financing through, but not limited to, the issuance of additional equity,” it added.

Shares of the company closed at 17.5 Canadian cents Wednesday on the Toronto Stock Exchange. (Reporting by Arnika Thakur in Bangalore; Editing by Prem Udayabhanu)

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