UPDATE 1-Pacific Rim to buy gold mine despite going concern fear

* To pay $200,000 cash, 5 mln shares for Panama gold mine

* Says has set aside money to pay for mine

* To pay $5 mln a year after getting drilling permit

* Shares down 15 percent

Aug 20 (Reuters) - Canada's gold miner Pacific Rim Mining Corp (PMU.TO) said it intends to buy a gold project in Panama for $1.2 million in cash and stock, barely a month after raising going concern doubts due to funding issues.

The company, which has had no sales for the past three years, intends to buy the Remance gold project from Compania Minera Clifton SA for $200,000 in cash and 5 million shares.

Shares of the Vancouver-based Pacific Rim slipped 15 percent to 17 Canadian cents Friday afternoon on the Toronto Stock Exchange.

The company has set aside money for the project, which it has been pursuing for the last nine months, a company spokesperson told Reuters by phone.

As of April 30, the company had cash and cash equivalents of $1.33 million and total liabilities of $2.6 million.

Pacific Rim's flagship asset, the El Dorado project in El Salvador, has been idle since 2008 as it battles the government over delays. [ID:nSGE6720K0]

In a statement, Pacific Rim said it plans to pay the cash portion of the deal in four tranches. The deal includes a further $5 million payment, in cash or stock, a year after getting governmental approval to start drilling, it added.

Pacific Rim said the first phase of the drill program is expected to exceed $1 million in costs, and that it will require additional funding to complete the drill program. (Reporting by Abhiram Nandakumar in Bangalore; Editing by Anne Pallivathuckal)