June 1, 2011 / 1:02 PM / 6 years ago

UPDATE 1-Bear Creek's Peru project faces further delays

TORONTO, June 1 (Reuters) - Bear Creek Mining (BCM.V), owner of a Peruvian silver project, said on Wednesday a new government resolution could further set back an approval process already delayed by what the Canadian company sees as political motives.

Bear Creek’s Santa Ana project in southeastern Peru has been at the center of anti-mining protests just days ahead of a tightly contested presidential run-off election in the South American country.

Aboriginal protesters, who fear the environmental consequences of the project, have demanded the government halt mining activity at the site. The protests have pulled down Bear Creek’s shares, which have now fallen over 35 percent this year. [ID:nN30293630]

Bear Creek said the Peruvian Ministry of Energy and Mines has suspended Santa Ana’s environmental and social impact assessment process until May 2012.

The company contends that the temporary suspension of the Santa Ana ESIA process is based on weak legal grounds and is motivated by the recent regional protests, as opposed to the technical merits of its ESIA submission.

“We continue to believe that these protests and government responses are the result of the pre-election political climate. We remain confident that the protests will be successfully resolved,” Bear Creek Chief Executive Andrew Swarthout said in a statement.

Bear Creek said it is assessing its legal options, which include an appeal to the Consejo de Mineria, the legislative body charged with overseeing such procedures and rulings.

The latest setback comes just a week after the government issued a decree stating that it would review all mining activities in the region. Bear Creek had said that review would likely delay its ESIA process by six months, pushing a possible approval to late in 2011. (Reporting by Euan Rocha)

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