Argonaut appeals La Colorada explosives suspension, reports hearing delay

VANCOUVER (miningweekly.com) – The TSX-listed equity of gold producer Argonaut Gold traded lower on Thursday after it announced that it has appealed an April Mexican court decision that suspended its explosives permit for the La Colorada mine.

The company has appealed the original Judiciary Court decision to temporarily suspend the explosives permit to the Collegiate Tribunal, which is an arm of the State Supreme Court that is tasked with overseeing the Judiciary Court. 

This appeal requests the Collegiate Tribunal to reinstate the explosives permit so that the company can blast material while the judiciary legal process continues.

Meanwhile, a judicial court hearing regarding the explosives permit has been rescheduled, this time to June 4. Four individuals have brought a legal suit against the Secretary of National Defence and the Municipality of La Colorada, based on assertions that the explosive permit should not have been granted.

The company is pursuing both the Judiciary legal process and the Collegiate Tribunal appeal process and anticipates it has material sufficient to allow these processes to run their course.

With free-dig material in the pit and ore stockpiles, the company estimates it has sufficient ore to continue operations until the end of July at its budgeted crushing throughput level of 12 000 t/d. The company has reviewed its 2018 consolidated production forecast and, under the assumption the explosive permit is reinstated by August 1, it has guided for production of between 165 000 oz and 180 000 oz of gold equivalent.

The company’s first-quarter profit rose 61% to $7.9-million, on the back of higher metals sales and realised prices, which together with 10% lower all-in sustaining costs being down 10%, benefitted the top line.

Early in the afternoon trading session, Argonaut’s TSX-listed equity traded at C$2.46 a share, down 3.91% for the day.