September 13, 2010 / 1:11 PM / in 7 years

UPDATE 1-Pacific Rim raises going concern doubt on fund worries

* Needs funds to meet exploratory, legal costs

* To curb exploration programs in El Salvador

* To proceed with its purchase of Remance mine

* Q1 loss widens on higher legal costs

* Needs $1 mln for exploration; now has $0.6 mln in funds

Sept 13 (Reuters) - Canadian gold miner Pacific Rim Mining Corp PMU.TO on Monday said its ability to continue as a going concern is dependent on additional funding so that it can meet legal costs and go ahead with exploration activities.

The company, which has raised going concern doubts for the second time in less than two months, said exploration costs are expected to be about $1.0 million, but as at July 31, it had $0.6 million in cash and cash equivalents.

It, however, believes that it will be able to obtain the necessary financing to meet its requirements on an ongoing basis.

With its El Salvador project mired in a costly dispute with the government there over delays in issuing permits, Pacific Rim, last month said it would buy a gold project for $1.2 million, funding the deal via private placements. [ID:nWNAB0835]

Pacific Rim, which has had no sales for the past three years, said it will continue to curb exploration in El Salvador till the issues there are resolved.

It, however, intends to go ahead with the purchase of the Remance gold project in Panama and conduct a preliminary exploration program once a formal agreement is signed.

Pacific Rim’s first-quarter loss widened to $1.2 million, or 1 cent a share, from $0.9 million, or 1 cent a share, last year mainly due to higher legal costs.

Pacific Rim shares, which have gained 6 percent since it last raised going concern worries, closed at 18.5 Canadian cents Friday on the Toronto Stock Exchange. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Savio D‘Souza)

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