Protesters block access to Tahoe’s Escobal silver mine in Guatemala
A group of protesters near the town of Casillas in Guatemala blocked Monday access to Tahoe Resources’ (TSX:THO), (NYSE: TAHO) Escobal silver mine, its flagship operation, delaying shipments and supplies.
Despite the interruption of normal operations, the Latin America-focused miner said it did not expect the incident to affect annual production or cost guidance.
“Our operations are performing well and we anticipate that our performance at mid-year will be well within expectations relative to our guidance,” President and CEO Ron Clayton said in a statement.
The demonstration seems to be about a variety of issues, the Vancouver-based company said, including claims that mining at Escobal is causing seismic activity in Casillas, located about 20 km from the operation.
Investors reacted negatively to the news and the stock was down 1.54% in Toronto to Cdn$10.89 at 11:59AM. It was also falling in New York (-1.85%) to 8.23 at 12:14 ET.
The news come a few months after the British Columbia Court of Appeal ruled a lawsuit brought by several Guatemalans for alleged violence during a 2013 protest at the same mine can proceed. Tahoe said in March it would appeal the ruling.
The blockade also follows a claim lodged last month by non-government organization CALAS against Guatemala’s Ministry of Energy and Mines for allegedly violating the Xinca indigenous people’s right of consultation in advance of granting Tahoe’s subsidiary Minera San Rafael the mining licence for Escobal.
Escobal, the world’s third largest silver mine, began commercial production in 2014 and drove Tahoe’s record cash flow and strong first quarter 2017 results, with the mine increasing silver production 17% to 5.7 million ounces at all-in sustaining costs of $8.11 an ounce for the quarter.
The underground operation, located in southeast Guatemala, about 3 km from San Rafael Las Flores, generated last year a record 21.2 million ounces of silver in concentrate.
The company has been growing in recent months. Last year, it bought Canadian miner Lake Shore Gold for $540 million, which added the firm’s Timmins West and Bell Creek mines in Northern Ontario to Tahoe’s portfolio.