Vancouver — Hecla Mining (HL-N, HL-X) has temporarily halted mining at Mina Isidora, the smaller of its two gold mines in Venezuela, in response to a group of local residents who are blocking access to the mine site and demanding that Hecla address community issues.
Unemployment is the most pressing issue in the El Callao region, where Heclas Mina Isidora mine is located. Mina Isidora employs 325 people, making it one of the largest employers in the area. But Mike Callahan, Heclas President of Venezuelan Operations, said in a news release that the mine continually receives requests to hire more people.
We obviously cannot meet all the employment demands for the region, Callahan said. It is important to recognize that we provide support and employment to more than a dozen communities in the region, and the protestors comprise a very small group from only one region.
Hecla expects the work stoppage to result in a 10% effect on gold production for the year. More specifically, second quarter results might be reduced by approximately 12,000 oz. gold. The reduction is not expected to impact the companys gross profits, as Hecla is a large and well-established gold and silver producer with mines in Alaska, Idaho, Mexico, and Venezuela.
During 2006, production at Mina Isidora included 100,179 tonnes of ore and 96,369 oz. gold. The mine has proven and probable reserves of 398,754 tonnes of ore at a grade of 0.8 oz. gold per tonne.
Hecla shares dropped 4% on the news, to US$8.31 from US$8.66.
El Callao is in the eastern Venezuelan state of Bolivar, 120 miles southeast of Puerto Ordaz. The region is home to some 25,000 people.
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