VANCOUVER (miningweekly.com) – Precious metals miner Tahoe Resources has been given the go-ahead to restart its Escobal silver mine, in Guatemala.
The announcement sent the company's battered TSX-listed stock soaring by a third on Monday, despite still being down nearly 40% since the start of the year on Tuesday.
Tahoe received a favourable ruling by the Guatemala Supreme Court reinstating the Escobal production licence. The decision reverses a preliminary July 5 decision to suspend the licence because of action brought by anti-mining organisation CALAS against the Guatemala Ministry of Energy and Mines (MEM).
Tahoe noted that there were still uncertainties surrounding near-term and long-term catalysts at Escobal, with protestors maintaining the roadblock at Casillas to prevent operations from resuming.
Management advised that it continues to negotiate with concerned parties and estimates it will take about a week to get the mine online once the roadblock is cleared.
Meanwhile, the Supreme Court has ordered the MEM to conduct a consultation under ILO Convention 169, which includes consultation with the Xinca indigenous communities within a certain geographic area, which Tahoe is seeking clarification on. The MEM will report the results back to the Supreme Court within 12 months.
Tahoe expects the plaintiff, CALAS, to appeal the latest ruling at the Constitutional Court, which is expected to rule on all appeals by the end of the year.
“While we support the rights of all people to peacefully protest, we do not support the illegal blockage of public highways by non-locals, which has had a devastating economic impact on our employees, contractors and communities. Once the road is re-opened at Casillas, we will resume full operations without disruption and put our valued employees and vendors back to work, support the economy of our local communities and return value to our shareholders,” said president and CEO Ron Clayton in a statement.
Tahoe had recently increased its revolving credit facility (RCF) to $300-million (from $150-million previously), plus a $50-million accordion feature and term to July 19, 2021. The RCF includes a borrowing limit of $75-million during any period of suspension of the mining licence at Escobal.
The stock further clawed back some gains on Tuesday, rising 4.33% to change hands at C$7.94 apiece.