Timmins, Ont.-based junior Lake Shore Gold was acquired by Tahoe Resources in 2016 in a friendly, all-stock deal valued at close to $1 billion.
For Tahoe, which already had mines in Guatemala and Peru, the merger brought new gold production, exposure to a low-risk jurisdiction in an established gold camp, and diversification.
“The combination with Lake Shore Gold enhances Tahoe’s position as the new leader in precious metals by adding another low-cost operation in Timmins, one of the most prolific gold camps in the world,” said Tahoe CEO Kevin McArthur at the time. “We are impressed by the long-term presence and see tremendous regional opportunities going forward.”
Issues at Tahoe’s biggest operation, the Escobal silver mine in Guatemala, which produced 21.2 million oz. silver in 2016, have underlined the benefits of diversification. Escobal has been shut down since July 2017, when the operation’s mining licence was suspended amid allegations that consultations did not take place with local Xinka Indigenous communities before the mining licence was granted.
While the country’s Supreme Court has since ruled the licence should be reinstated (and that the Ministry of Energy and Mines must now consult with Xinka communities), the Constitutional Court heard an appeal of that judgment in October 2017, and has yet to make a ruling.
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