Tahoe cutting 250 jobs at Escobal mine in Guatemala on reopening delays

Canada’s Tahoe Resources (TSX:THO)(NYSE:TAHO) is laying off 250 employees, or roughly a quarter of the staff from its flagship Escobal silver mine, in Guatemala, as a legal battle to having the mining license for the site reinstated drags on.

The Vancouver-based company had to halt operations at the mine last July after the country’s Supreme Court provisionally ordered so following an appeal from anti-mining group CALAS alleging the Ministry of Energy and Mines had not consulted with the Xinca indigenous people before awarding the license to Tahoe’s local unit, Minera San Rafael.

Originally, Tahoe was prepared to face a three-month mine suspension, period during which 5.1 million ounces of silver production were expected to be deferred, about $10 million lost, not to mention the fact the company would have to review its previously issued guidance.

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.

The underground operation, located in southeast Guatemala, about 3 km from San Rafael Las Flores, produced a record 21.2 million ounces of silver in concentrate in 2016.

But it has also been a source of polemic. Last summer, protesters blocked access to the mine, delaying shipments and supplies. Tahoe is also facing action in Canada’s court system by a group of Guatemalan for alleged violence at a protest outside Escobal in 2013.

The mining licenses of the Tahoe's Escobal unit as well as the smaller Juan Bosco have both been suspended since July 5.

More to come…

 

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