Tahoe Resources Inc. shares plunged Thursday amid widespread stock downgrades after a Guatemalan court suspended the licence for its flagship Escobal mine, the world’s third-largest silver project.
Guatemala’s Supreme Court issued a provisional decision to temporarily revoke Tahoe’s licence in response to a lawsuit filed by human rights organization CALAS against the country’s Ministry of Energy and Mines. The group alleges the government violated indigenous rights to consultation when it granted Tahoe’s permit.
The suspension is a temporary measure until the suit brought against its subsidiary Minera San Rafael on behalf of the Xinca community can be fully heard. The company said it will immediately appeal to the country’s constitutional court.
It believes its operating licence should remain in effect while the case is being reviewed based on a prior consultation ruling by the constitutional court and said it will also ask the Supreme Court to reconsider its ruling.
Shares in the Vancouver-based miner fell 33.18 per cent or $3.57 to $7.19 by midday Thursday as analysts following the stock downgraded its performance rating and price targets. Haywood Securities changed its rating from “hold” to “sell” as a result of the uncertainty over Escobal’s future, saying it expected the mine to be shuttered for the rest of the year.
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