UPDATE 2-Goldcorp shuts biggest gold mine after week-long blockade

Mon Oct 3, 2016 3:36pm EDT
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(Recasts with reasons for shutdown, fresh analyst comment, updates stock price)

By Nicole Mordant

VANCOUVER Oct 3 (Reuters) - Goldcorp Inc said on Monday it was temporarily shutting down its Peñasquito gold mine in Mexico as it was unable to safely continue operations due to a week-long blockade by a trucking contractor, sending its shares down nearly 5 percent.

The world's No. 3 gold miner by market value said it was unable to bring in food, water and fuel for the 750 people on the site, which has been blockaded by a contractor concerned about losing business due to efficiency improvements at the mine.

A contingency plan was in place that would allow mining and processing to be restarted immediately once the dispute was resolved, Vancouver-based Goldcorp said. It did not expect the shutdown to impact 2016 production or cost estimates.

A restart of the mine earlier this year after Goldcorp performed its first site-wide shutdown, proved to be "somewhat challenging", Desjardins analyst Michael Parkin said in a note to clients.

"We thus view this as a potential risk" for Goldcorp's fourth quarter results, Parkin said.

Goldcorp expects the Peñasquito mine in northern Mexico to produce between 520,000 and 580,000 ounces of gold this year, equal to around 19 percent of the company's total forecast output of 2.8 million to 3.1 million ounces.

The blockade is the latest setback for Goldcorp, which has experienced a number of operating problems at its mines in the past year, causing its stock to trail peers.   Continued...