Tahoe restarts mine in Peru as protests end

Tahoe Resources Inc. [THO-TSX, NYSE] said Friday September 7 that it has restarted mining operations following an agreement to end the protest at its La Arena Mine in Peru. On the evening of September 6, 2018, protestors from the community of La Ramada signed an agreement to participate in formal dialogue with Tahoe Peru to be hosted by the Ministry of Energy and Mines. This dialogue was scheduled to begin today (Friday).

Following the formal agreement, the protestors left Tahoe’s property and operations restarted with the overnight shift, the company said.

Taho shares advanced on the news, rising 6.73% or 24 cents to $3.66 on volume of 2.3 million.

However, Tahoe said the suspension of mining together with a labour strike in the second quarter of La Arena has disrupted production, and the company now expects to be near the low end of its production guidance at La Arena of between 160,000 and 185,000 ounces of gold.

Tahoe elected to suspend production after a group ranging from between 80 to 100 people from the nearby community of La Ramada, located about 3 km to the 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.

However, the company’s troubles seem far from over.

On September 4, 2018, Tahoe issued a news release stating that the Constitutional Court in Guatemala has reversed a Supreme Court decision to reinstate the mining license for its Escobal mine. 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 court resolution provides a path forward for the Esobal Mine restart and the process is expected to start as soon as possible. But the company also said it does not have a timeline for completion.

Tahoe is an Americas-focused precious metals company. It operates 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.

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 has expressed the opinion that it may be in a position to restart operations at Escobal after the community consultation is complete. “It is our firm belief that a productive Escobal is in the best interest of all our stakeholders, including the Government of Guatemala, our workforce, the local communities, the Xinka indigenous communities, our suppliers and Tahoe shareholders,” said Tahoe President and CEO Jim Voorhees.

“We will respect the court’s decision and we will support the MEM in fostering a thorough, productive and good-faith consultation process with the goal of restarting operations at Escobal in a manner that is mutually agreeable to the Xinka indigenous communities included in the ILO 169 process,” he said.

Voorhees went on to say that the company intends to use this time to engage with other community members who are interested in productive dialogue with the company. “Once this process is completed, we look forward to restarting operations at Escobal and becoming a contributing member of the Guatemalan economy once again,” he said.