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Torex suspends El Limon-Guajes worker contracts amid blockade

As a blockade of the El Limon-Guajes gold mine in Mexico drags on, now in its 46th day, Torex Gold Resources Inc. suspended employment contracts with its workforce, effective Dec. 16, after reporting last week that the majority of the workers had voted to return to work.

The blockade was started in early November by Los Mineros, deemed a raiding union by the company, which was forced to slash its 2017 production guidance to under 300,000 ounces of gold as a result. Torex has said a minority of workers are taking part in the blockade, which it considers illegal.

Torex said Dec. 18 that it will reconsider the contract suspension if the blockade is cleared by the end of Dec. 20, but it did not sound optimistic.

The company said Los Mineros had increased its efforts over the weekend, threatening to cut power to the mine and blocking food and water from reaching police at the site.

Torex could not immediately be reached for comment on whether there are ongoing negotiations with Los Mineros.

The company will continue working with Mexico's Federal Labour Board to schedule a secret ballot to let workers choose between unions. But at a Dec. 13 Labour Board meeting, Los Mineros sought to delay a decision on the vote date until Jan. 30, 2018, according to the company.

"As we have previously stated, we are willing to work with the union the employees select," Torex President and CEO Fred Stanford said in a prepared statement. "While this process unfolds, it is essential the illegal blockade be lifted and the employees return to work immediately after Christmas."