TORONTO, Dec 16 (Reuters) - Argonaut Gold said on Friday that Mexico’s environmental authority had denied its environmental permit to develop the San Antonio mine and it would consider legal action, resubmitting a revised study or more dialogue.
The company’s stock plunged more than 17 percent, to C$1.66 on the Toronto Stock Exchange, after it announced that the Mexican agency said more information was needed on the impact to a local aquifer, the environment and the construction, operation and closure plans for the project.
The project, which has had permit issues for several years, has potential to produce 80,000 ounces of gold annually, said RBC Capital Markets analyst Sam Crittenden. Argonaut’s ongoing efforts to gain support from the community of La Paz is key to making progress on permits, he wrote in a note to clients.
Toronto-based Argonaut said it was disappointed with the decision, which follows a positive ruling from Mexico’s federal court on a zoning dispute. The company added that it believes the required information is readily available on the Baja California Sur, Mexico project and that it can respond swiftly.
Argonaut’s management said the information had already been submitted to authorities, albeit in several individual reports, during the zoning dispute, Desjardins Capital Markets analyst Michael Parkin said in a note.
Argonaut added that it could notify the federal court that the information was already submitted, or repackage it with an updated environmental assessment, Parkin wrote.
Argonaut’s main assets are the production-stage El Castillo mine and La Colorada mine, along with the construction-stage San Agustin project. It also has advanced exploration projects in Baja California Sur, Mexico and Ontario.
Reporting by Susan Taylor; Editing by Dan Grebler