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Tahoe shares crash after court reverses Escobal mine license reinstatement

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Tahoe shares crash after court reverses Escobal mine license reinstatement

Tahoe Resources Inc. said Sept. 4 that the Constitutional Court of Guatemala reversed a Supreme Court decision to reinstate the mining license for the Escobal silver-gold-lead mine, held by unit Minera San Rafael.

The Canada-listed miner said that the decision ordered that the license will remain suspended until the Ministry of Energy and Mines completes a consultation with the Xinka communities in the area of the Escobal mine.

Shares were down over 19% in morning trades on the Toronto Stock Exchange.

Previously, in the original case against the Escobal mine, an anti-mining organization approached the country's Supreme Court to look into the granting of licenses by the mining ministry, citing a violation of the indigenous people's rights to be consulted.

In August, Tahoe terminated another 200 workers at its suspended Escobal mine in Guatemala amid a delay in legal proceedings involving the mine's license, which resulted in about 70% of the total workforce being dismissed. Escobal employed 1,030 people before the suspension.

The miner swung to a second-quarter net loss of US$15.6 million, from net earnings of US$33.5 million in the year-ago period, due to the ongoing suspension at Escobal.