TORONTO (Reuters) - Shares of Canada’s Tahoe Resources Inc dove on Friday to an all-time low after the company said Guatemala’s constitutional court upheld the license suspension of its top mine.
The move backed a lower court’s preliminary decision to provisionally halt operations at Escobal, which is one of the world’s largest silver mines, Tahoe said.
Stock in the Vancouver-based company fell as much as 22 percent to C$5.35 on the Toronto Stock Exchange.
It later pared its decline to C$5.63, a 17.9 percent retreat.
On the New York Stock Exchange, it was trading 17.1 percent lower at $4.55, slightly above its record low of $4.27 struck earlier in the session.
In midday trade the stock ranked among the biggest percentage losers on both exchanges. [.PL.N] [.PL.TO]
The court is assessing whether Tahoe appropriately consulted with Guatemalan indigenous communities after an environmental organization argued that did not happen.
Tahoe said the constitutional court’s hearing on the “definitive” constitutional claim is scheduled for Aug. 28, and a ruling is expected “several months” afterwards.
It added there are no signs of an immediate resolution of a blockade by protesters of the municipal road to the Escobal mine.
RBC Capital Markets analyst Stephen Walker said it could take 12 to 18 months to resolve the constitutional claim.
Andrew Kaip, a BMO Capital Markets analyst, said he expects the company’s cash balance will become “fairly tight” at year-end if the suspension continues.
Until Escobal operations resume, Tahoe said it cannot fully access its revolving credit facility.
The agreement with a syndicate of lenders, which runs until 2021, has $300 million in available credit, but borrowing is capped at $75 million while Escobal’s license is suspended.
Tahoe will be in default if that remains suspended on April 1, 2018, the company said last month.
Reporting by Susan Taylor; Editing by W Simon