March 24, 2011 / 10:32 AM / in 7 years

UPDATE 2-Torex Gold suspends drilling at Mexico project, shares fall

* Co says trucks were stolen

* Moves personnel offsite

* CEO refuses to comment on costs involved

* Shares fall as much as 13 pct (Adds company comments, share movement)

By Bhaswati Mukhopadhyay

BANGALORE, March 24 (Reuters) - Canada’s Torex Gold Resources Inc said it has suspended drilling at its Morelos gold project in Mexico to beef up security, sending the gold miner’s shares down 13 percent.

“The company has recently experienced criminal activity and violence in the immediate area that culminated in the recent armed robbery of several of the company’s trucks,” Chief Executive Fred Stanford said in a statement.

“I cannot really say who they are. The authorities are investigating,” the CEO told Reuters. He ruled out any political intent.

Stanford did not specify the costs involved or the time it would take to resolve the issue.

The cost of suspending operations will not be significant as Torex is an exploration company and not generating revenue at this stage, he said.

“Cost of providing additional security is uncertain yet. We do not know what will be provided by the authorities and what we will provide ourselves.”

Torex, whose only project is Morelos, had C$52 million of cash in hand at the end of January.

The Morelos project is located in Guerrero state, about 180 kilometers to the south-southwest of Mexico City.

The gold miner, which fully owns the project, said in a statement that none of its employees or its contractor’s have been physically harmed. The company has moved its personnel offsite.

Shares of the company were down 6 Canadian cents at C$1.89 on Thursday morning on the Toronto Stock Exchange. They earlier touched a low of C$1.69. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Sriraj Kalluvila)

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