After a more than two-month suspension, Vancouver-registered Tahoe Resources Inc. (TSX:THO) has had its Guatemalan mining licence reinstated by the country’s Supreme Court.
It’s a positive development for a company that has faced ongoing legal challenges in both Guatemala and Canada, and it is bolstering investor confidence. Shares of the company were up by more than 40% Monday morning (as of 8 a.m. PT).
Trading at nearly $8 a share – $2.26 higher than its previous close – the price is still down 56.5% year-over-year.
The news comes three weeks after the Guatemala’s Constitutional Court upheld a lower court ruling to provisionally suspend operations at Tahoe’s Escobal mine in southeast Guatemala, one of the largest silver mines in the world. The suspension was a response to a pending legal action against Guatemala’s Ministry of Energy and Mines, brought forward by Guatemalan human rights organization, CALAS. The organization claimed local Xinca indigenous people were not properly consulted prior to the mining licence being granted.
The company had originally prepared for a three-month suspension of its mine operations, which are overseen by its subsidiary Minera San Rafael. It would have deferred an expected 5.1 million ounces of silver production, and cost the company $10 million.
On Sunday, the company cautioned investors that it expects the ruling will be challenged. Tahoe also noted in a news release that while it is legally entitled to resume operations, a roadblock by protesters is currently preventing an immediate restart.