Tahoe ceases dividend and suspends company-wide guidance due to uncertainty in Guatemala
Canadian miner Tahoe Resources (TSX:THO)(NYSE:TAHO) suspended its quarterly dividend of $0.02 a share and deferred its full-year production guidance in response to a ruling by Guatemala’s Supreme Court to suspend the license for the company’s flagship Escobal operation.
The tribunal’s decision was taken last month and it supports a claim brought against the country’s Ministry of Energy and Mines by an environmentalist group called CALAS. The activists allege the Ministry violated the local indigenous people’s right to informed consultation prior to granting the mining license to Tahoe’s Guatemalan subsidiary.
Following the receipt of the legal order, the Vancouver-based firm placed the mine “on hold.”
On top of this, a two-month-long blockade on the primary road that connects Guatemala City to Escobal is causing delays in the transport of materials in and out of the silver mine, which is the world’s third largest.
As if these weren’t enough problems, Tahoe is also facing action in Canada’s court system by a group of Guatemalans for alleged violence at a protest outside Escobal in 2013.
But the company seems to be handling the situation well, as officials announced Wednesday that balance sheets “remains strong, with cash and cash equivalents of $190.6 million at June 30, 2017.”
According to Tahoe’s President and CEO, Ron Clayton, overall Q2 performance shows good results. “Silver production was 4.1 million ounces for the quarter and when combined with Q1 results, puts us at almost 10 million ounces year-to-date,” he said.
Clayton stated that per ounce metrics remained strong at Escobal and that once both the roadblock and the July court case are resolved, the company expects to resume production within a week.