Pan American says Tahoe lawsuit is resolved

Mining at the Escobal silver mine in Guatemala. Source: Pan American Silver Corp.

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Pan American Silver Corp. [PAAS-TSX, NASDAQ] said Wednesday July 31 that a lawsuit related to a 2013 shooting incident at Tahoe Resources’ Escobal silver mine in Guatemala has been resolved.

The company said it has achieved a final resolution with Guatemalan community members who commenced a Supreme Court of British Columbia action in 2014 against Tahoe Resources.

These events occurred well before Pan American agreed last year to acquire Tahoe Resources Inc. in a US$1 billion transaction that was designed to make Pan American the world’s largest premier silver mining company.

Prior to that agreement, Tahoe operated the Escobal Mine in Guatemala, the La Arena and Shahiundo gold mines in Peru and the Timmins West and Bell Creek gold mines in Canada. The Escobal Mine is located in 30 km southeast of Guatemala City.

In a July 30, 2019 press release, Pan American said that on April 27, 2013, the Escobal Mine’s security guards, headed by chief of security Alberto Rotondo, shot at protesters who had gathered on the public road outside the gates of the mine. A number of individuals were injured during the shooting. They subsequently filed a lawsuit in the Supreme Court of British Columbia.

Pan American said it strongly condemns and will not resort to the use of any violence. “While these events occurred well before the acquisition, Pan American, on behalf of Tahoe, acknowledges that the shooting on April 27, 2013, infringed the human rights of the protesters,” the company said in its press release. “Pan American, on behalf of Tahoe, apologizes to the victims and to the community.”

Pan American went on to say in the press release that the shooting victims have achieved a resolution of their lawsuit in Canada against Tahoe. “The case has now been concluded,” the company said.

“When we completed the acquisition of Tahoe, we made it a priority to reach out and make a constructive proposal to resolve the matter amicably rather than continue with the litigation,” said Pan American Silver President and CEO Michael Steinmann.

Steinmann said the company sincerely hopes that this resolution provides some measure of closure for the shooting victims and that this is a step towards repairing relationships with broader communities in Guatemala.

However, Pan American said the resolution of the lawsuit does not impede in any way the ability of the victims to exercise their rights of protest related to the mine in in the future.

On its website, Pan American describes Escobal as one of the world’s most attractive silver mines, with over US$500 million invested in development and infrastructure that resulted in a high-quality, well- built operation.

Operations are currently suspended pending completion of a consulting process, court approval, and community engagement efforts to build a social license, the company said.

The Escobal deposit is an intermediate-sulfidation silver-gold-lead-zinc vein deposit hosted in tertiary andesite and volcaniclastic sedimentary rocks.

The mine produced 21 million ounces of silver at an all-in-sustaining cost of US$8.63 per ounce during its last four quarters of undisturbed production.

On Wednesday, Pan American shares eased 4.88% or $1.03 to $20.07. The shares trade in a 52-week range of $22.95 and $13.83.

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