After months’ worth of its stock getting pummeled, Tahoe Resources (TSX: THO)(NYSE: TAHO) is one of the best performing TSX-listed stocks on Monday, getting some positive attention on a favorable court ruling in Guatemala. In July, the country’s Supreme Court sided at first with an activist group seeking the suspension of Tahoe’s mining activity at the Escobal mine, one of the biggest silver mines in the world.
The anti-mining organization known as CALAS had sued Guatemala's Ministry of Energy and Mines, alleging the ministry violated the Xinca indigenous people’s rights by failing to properly consult with the natives before awarding a mining license to Minera San Rafael, Tahoe’s Guatemalan subsidiary. Tahoe has held the belief that all processes were conducted within the letter of the law.
Be that as it may, shares of Tahoe went into a tailspin following the early-July ruling and the Reno, Nevada-based company saying it was evaluating damage control, which could include putting a freeze on dividends.
"Extremely disappointed" in the court’s ruling for a suspension about two months ago, Tahoe’s frown has turned upside down today, as the Supreme Court this weekend ruled to reverse the suspension, reinstating the Escobal license while ordering the Ministry of Energy and Mines to conduct a consultation with the Xinca indigenous communities in specific locations under ILO Convention 169.
Although it has complete legal rights to re-commence operations at Escobal, things still aren’t that simple because of an illegal roadblock ongoing at Casillas making it impossible for safe passage to restart the mine. Tahoe management believes things will be peacefully resolved straight away and the mine producing again by next Sunday.
As with any lawsuit, an appeal by CALAS or the Xinca Parliament is possible. Still, Tahoe says it plans to update guidance on metal production and capex later in September as things try to return to normalcy.
TSX-listed shares of Tahoe have catapulted ahead 37.1% to $7.80 in Monday afternoon trading after hitting as high as $8.50 in morning action. Shares for NYSE-listed shares have rocketed similarly, gaining 35.7% to $6.38, with an intraday high of $7.00.
