26th Feb 2014 09:24
LONDON (Alliance News) - Fresnillo PLC Wednesday said that the Mexican Ministry of Defense has granted a new explosives permit for the Herradura mining unit at Minera Penmont.
The precious metals miner, operating in Mexico, said that Penmont can now resume the use of explosives on the Herradura mine and will place the corresponding explosives orders without delay.
Minera Penmont is a joint venture 56% owned by Fresnillo and 44% owned by Newmont Mining Corp.
Fresnillo said it expects to begin operations next week at Herradura, where drill holes are already available in preparation for blasting.
The company said it looks forward to resuming normal operations at Herradura as soon as possible and confirms its guidance for gold production as announced in its recent production report of 450,000 attributable ounces.
The news comes a month after a district court in Mexico denied a request by the Ejido El Bajio agrarian community, which is located near the sites, to prevent the lifting of the explosives permit covering Fresnillo's Herradura and Soledad mines.
On October 24, Fresnillo reported that the community had presented legal proceedings to try to block the lifting of the temporary suspension of the explosives permit covering Herradura and Soledad, and that the Ejido community had obtained a temporary stay order in its favour pending further review by the court in early November.
In November, the court found the stay order request by the Ejido community should not apply to Herradura and Soledad, subject to the appeal, as they do not lie within the boundaries of the community.
The company's Dipolos mine, however, does lie within the boundaries of the Ejido El Bajío agrarian land, and explosives permits at the site remain suspended.
In December, the company lowered its full-year 2013 gold production estimates, citing the issues for permission to use explosives in Mexico.
Fresnillo shares were trading up 0.3% at 970.00 pence, putting it in the top FTSE 100 risers in early trading Wednesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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