New Gold appeals Mexican gold mine suspension on court ruling
New Gold has had to suspend its Cerro San Pedro mine in Mexico following a court ruling over its 2006 EIS
TORONTO (Reuters) -
New Gold (TSX, NYSE AMEX: NGD) intends to appeal the Mexican government's decision to suspend mining operations at its Cerro San Pedro gold and silver mine, which was announced yesterday.
The suspension came after the mine's Environmental Impact Statement (EIS), which was issued in 2006, was nullified by Mexico's environmental enforcement agency PROFEPA following a ruling by the Federal Court of Fiscal and Administrative Justice.
New Gold, which asserted that the mine has been operating in full compliance with required permits and government authorisations, said it would pursue "all legal avenues" with respect to the recent actions of both SEMARNAT (Secretariat of Environment and Natural Resources) and PROFEPA, also seeking immediate remedies. A new EIS has already been filed with SEMARNAT.
"This is a continuation of a decade of challenges from a group of individuals largely from outside the area who are opposed to the mining operations at Cerro San Pedro. We are taking all possible steps to respond to challenges to our legal ability to operate the mine, and believe that we will resume full operations," said chief executive of New Gold, Robert Gallagher.
Despite the suspension of the mining operations, gold recovery of existing inventory on the leach pads are continuing.
Cerro San Pedro has reserves of 1.3Moz (million ounces) of gold and 51 Moz silver and resources of 1.7 Moz of gold and 63 Moz of silver. Annual production at the mine for the full year 2008 amounted to 85,600 oz of gold and 1.1 milion oz of silver.
Shares in New Gold slipped 16% today.
Published courtesy of Proactive Investors - www.proactiveinvestors.co.uk