SUSTAINABLE MINING

Adverse court ruling has not yet halted New Gold's Cerro San Pedro mine

After the controversial Cerro San Pedro mine resumed full operations in March, a Mexican court decision has again called for its closure based on cancellation of the mine's EIS.

Author: Dorothy Kosich
Posted: Thursday , 08 Jul 2010

RENO, NV - 

Despite a change in corporate ownership, the years of  wrangling over the Cerro San Pedro gold and silver mine in Mexico continues as a Mexican court Wednesday upheld the nullification of the mine's environmental impact statement.

Vancouver's New Gold announced Wednesday that the Fifth Auxiliary District Court in Mexico City denied the company's appeal of the September 2009 by the Federal Court of Fiscal and Administrative Justice that ordered SEMARNAT, the country's environmental regulator, to cancel Cerro San Pedro's EIS in November 2009.

Cerro San Pedro is a heap leach operation which was anticipated to produce 95,000 to 105,000 ounces of gold this year. The mine obtained ISO: 14001 environmental certification in 2008.

It has gold reserves of 1.4 million ounces and 52 million ounces of silver, along with measured and indicated resources of 2.3 million ounces of gold and 78 million ounces of silver. Estimated mine life is nine years.

At the time of November 2009 shutdown, New Gold CEO Robert Gallagher said, "This (ruling) 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." 

The mine was subsequently reopened in March after the shutdown order was suspended, pending the outcome of the appeals. New Gold has yet to receive the full court decision including the written reasons for the denial. "As a result the company is not presently aware of the implications this could have on the Cerro San Pedro mine, which is currently fully operational," New Gold management said in a news release.

"After the company has had the opportunity to review the full decision, New Gold will file an appeal with a Collegiate Appeals Court in Mexico City. In addition, the company may file an application with the Mexican Supreme Court requesting it hear the case."

New Gold said it remains "steadfast in its view that the Cerro San Pedro operation complies with the highest environmental standards and should remain operational for the benefit of its local employees and the surrounding communities."

Although the Cerro San Pedro mining district has a 400-year history of mineral production, previous owner Metallica Resources encountered opposition for the mining project a decade ago. As Metallica was merged into New Gold, project opponents have continued their on-going legal battle against the mine.