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The company has been forced to release an additional 169 workers at its flagship Escobal mine, bringing the total number of layoffs to 872.
Tahoe Resources (TSX:THO,NYSE:TAHO) has been forced to lay off 169 employees at Escobal, its flagship silver mine, the company announced on Monday (September 17).
The move follows the early September news that Guatemala’s Constitutional Court has upheld the suspension of licenses at the mine.
With the new round of layoffs at Minera San Rafael, Tahoe’s local unit, the total number of employees currently out of work is 872. Layoffs began after the suspension was implemented.
“The uncertainty in which the [Constitutional Court] has maintained the case compels us to adapt,” Andres Davila, a spokesperson for the mine, said in a statement.
These cuts come less than a month after Tahoe had to release 200 of its employees on August 20.
Prior to the license suspension, Minera San Rafael employed 1,030 people, 97 percent of whom were Guatemalan and 50 percent of whom were from the Santa Rosa region.
“We are extremely disappointed with the need for a further workforce reduction at this time, however this is a natural consequence to the prolonged inaction in the legal system,” said Jim Voorhees, Tahoe’s president and CEO.
“With that said, we remain committed to seeking a resolution and restarting the Escobal mine at the earliest possible time for the benefit of all of our stakeholders,” he added.
Tahoe maintains that Escobal is key for increasing growth within the local community and that the appeal, which states that the ministry did not consult with the Xinca indigenous people before awarding the Escobal mining license to Tahoe, can only hurt the country’s economy.
Due to the ongoing dispute, the company’s share price has fallen more than 40 percent since January.
Tahoe reported a quarterly loss in Q1 as it produced almost no silver and spent more than US$8 million just to maintain basic functions at Escobal.
As of 3:03 p.m. EST on Tuesday (September 18), Tahoe was trading at C$3.83.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.
