Canada's Goldcorp (TSX:G) (NYSE: GG) said an illegal strike at its Cerro Negro mine in Argentina has forced it to halt operations at the site, the company's biggest gold producing asset in the South American country.
Mining stopped on March 8, when members of the Asociaci??n Obrera Minera Argentina (AOMA) downed tools, and processing activities have now also ceased following the exhaustion of surface stockpiles.
Mining stopped on March 8 and processing activities have now also ceased following the exhaustion of surface stockpiles.The Vancouver-based miner, which is in the midst of its merger with mining giant Newmont (NYSE: NEM), said it was working with the union and government authorities to find a resolution and restart operations.
The company gave no indication of why the union has gone on a strike.
Jefferies analyst Christopher LaFemina said there would likely be a quick resolution, as Goldcorp is unlikely to want to draw negative attention before the Newmont vote next month.
Analysts at Canaccord Genuity noted the work stoppage would materially impact the fundamental value of the mine. However, we do note that a prolonged stoppage could impact the company's ability to meet its 2019 production guidance of 2.2-2.4 million ounces," they wrote in a note to investors.
Cerro Negro underground mine began operations in 2015. It produced 489,000 gold ounces last year at an all-in sustaining cost of $535 per ounce.