Tahoe hit by mining license ruling in Guatemala

The license is held through Tahoe’s Guatemalan subsidiary Minera San Rafael.

The company said it learned of the decision through a Guatemalan Constitutional Court press conference.

Tahoe said it understands that the Constitutional Court’s resolution orders that the Escobal mining license will remain suspended until the Ministry of Energy and Mines completes the ILO 169 consultation with the Xinka Indigenous communities in the region of the Escobal Mine.

Tahoe said the process is expected to start as soon as possible. But the company said it does not have a timeline for completion.

Tuesday’s announcement comes just days after the company said it has suspended mining at its La Arena Mine in Peru due to protests.

The company said a group ranging from between 80 to 100 people from the nearby community of La Ramada, located about 3 km southeast of the La Arena Mine, illegally trespassed onto the property, disrupting mining operations and demanding payment for the alleged impacts of mining operations to their community.

“To ensure the safety of our employees, contractors and members of the community, the company has temporarily suspended mining operations, starting with the night shift on August 30, 2018, and ordered all workers to remain at home,” Tahoe said in a press release on Friday.

Investors reacted to the news from Guatemala by sending the shares down 20.94% or $0.94 to $3.55 on volume of 3.4 million. The 52-week range is $8.50 and $3.37.

Tahoe is an Americas-focused precious metals company. It operates the Escobal silver mine in Guatemala, the La Arena and Shahiundo gold mines in Peru and the Timmins West and Bell Creek gold mines in Canada.

It has a 100% interest in the Escobal gold mine, which is located in 30 km southeast of Guatemala City.

The company said 12 of the mine’s unarmed security contract workers were attacked and kidnapped late in the evening of Friday, August 24, 2018. After several hours of being abducted, injured and held at gun point, the contractors were eventually released and escorted by the Guatemalan Civil National Police back to Jalapa where they were treated for their injuries and trauma, the company said.

Still, the company may be in a position to restart operations at Escobal after the community consultation is complete. Meanwhile, the Constitutional Court is expected to issue a formal written resolution sometime during the next few days, at which time Tahoe said it will provide investors with a more fulsome update.

The company has said previously it expects to produce between 400,000 and 475,000 ounces this year at an all-in sustaining cost of between US$1,000 and US$1,100 an ounce.