Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Gold and silver miner Tahoe Resources Inc posted a quarterly loss on Wednesday that narrowly fell short of Wall Street’s expectations, the result of a Guatemala mine dispute that shows now signs of abating.
Nevada-based Tahoe posted a second-quarter loss of $15.6 million, or 5 cents per share, compared to a profit of $33.5 million, or 11 cents per share, in the year-ago period.
By that measure, analysts expected a loss of 4 cents per share, according to Thomson Reuters I/B/E/S.
Tahoe’s flagship Escobal silver mine in Guatemala has been effectively mothballed since last year as part of a long-simmering dispute with the country’s leadership.
Guatemala’s top court provisionally suspended Tahoe’s license to operate after an anti-mining organization appealed to the court alleging that the country’s Ministry of Energy and Mines had not consulted with the Xinca indigenous people before awarding the license to Tahoe’s Guatemalan unit, Minera San Rafael.
The dispute drained Tahoe’s quarterly earnings by $15.6 million, and the company also spent $8.1 million on maintenance costs.
“While we are disappointed that the Constitutional Court decision is still pending, we remain focused on those issues within our control,” Tahoe Chief Executive Jim Voorhees, who took the company’s top spot in June, said in a statement.
Tahoe produced no silver during the second quarter as a result of the fracas. Its gold production slipped 8 percent to 103,000 ounces.
The company also operates in Peru and Canada.
Tahoe plans to hold a conference call to discuss the quarterly results on Thursday morning.
(Reporting by Ernest Scheyder; Editing by Sandra Maler)
