Access to Tahoe’s Escobal mine blocked, guidance remains unaffected

VANCOUVER (miningweekly.com) – Protestors near the town of Casillas, in south-east Guatemala, have blocked access to precious metals miner Tahoe Resources’ flagship Escobal mine, the third-largest silver mine in the world.

The protests appear to relate to a variety of issues, including claims that mining at Escobal is causing seismic activity more than 20 km away in Casillas, Vancouver-based Tahoe said in a news release on Monday.

The miner stressed that, despite protestors blocking the main road that connects Guatemala City to the Escobal mine near Minera San Rafael, blocking shipments and supplies to the mine, the company does not expect any adjustments to its full-year 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. However, the delay affects our partner communities and former land owners, as well as our employees and suppliers, since royalties, wages and fees may be delayed as a result,” president and CEO Ron Clayton stated.

“We are working diligently to engage government and community leaders to resolve the situation."

The Escobal operation is stirring tension in Guatemala, after nongovernmental and anti-mining organisation CALAS, last month filed a claim against Guatemala’s Ministry of Energy and Mines, alleging it violated the Xinca indigenous people’s right of consultation in advance of granting the Escobal mining licence to Tahoe’s Guatemalan subsidiary, Minera San Rafael.

Tahoe's management stated their belief that the claims were without merit and pointed to hundreds of documented public and private meetings and open consultations in, and around, the mine area dating back to 2010.

The Escobal mine is also central to a lawsuit brought by seven Guatemalan protesters, which the Court of Appeal for British Columbia in January ruled can be heard in the British Columbia court system. The Guatemalan protesters allege Tahoe security guards shot at them during a protest outside the Escobal mine in 2013, and are suing the company for negligence and battery.

Tahoe in March appealed the ruling.

TSX- and NYSE-listed Tahoe last month reported record cash flows and earnings for the three months to March 31, on the back of strong performance from its portfolio of mines, underpinned by Escobal.

The company reported record cash flow before changes in working capital of $132.9-million, or $0.43 a share, with net earnings also rising to a record $74.7-million, or $0.24 a share.

Tahoe reported total silver output in the period of 5.7-million ounces, driven by strong results at Escobal, in Guatemala. First-quarter gold output totalled 119 100 oz, compared with record output of 119 900 oz in the previous period.

The company expects to produce between 18-million and 20-million ounces of silver, and between 375 000 oz and 425 000 oz of gold this year. All-in sustaining costs are expected to range between $9.50/oz and $10.50/oz of silver and $1 150/oz to $1 250/oz of gold.