MercoPress. South Atlantic News Agency

Union halts operations at Argentina's biggest gold mine

“It is unlikely the work stoppage will materially impact the fundamental value of the mine,” analysts at Canaccord Genuity wrote in a note

A strike at Canadian Goldcorp Inc’s Cerro Negro mine in Argentina has forced a halt to operations, the company said on Tuesday, calling the union’s action at its biggest mine illegal. Mining activities stopped when the strike by the Asociacion Obrera Minera Argentina (AOMA) union began on March 8, and processing is also now halted as surface stockpiles have run out, Vancouver-headquartered Goldcorp said in a statement.

“It is unlikely the work stoppage will materially impact the fundamental value of the mine,” analysts at Canaccord Genuity wrote in a note. “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.”

The company completed a ramp up of the Cerro Negro mine toward the end of last year, mining 4,000 tons of ore per day.

Goldcorp shares were up 2.2% at C$14.87 at 12:34 p.m. in Toronto, compared with a 0.1% gain in the Toronto stock benchmark.

Goldcorp, the target of a friendly US$ 10 billion takeover bid by Newmont Mining Corp, said it is working with the union and government authorities to resolve the dispute and said work can restart immediately when workers return.

Barrick Gold Corp on Monday withdrew a hostile bid for Newmont, removing a potential hurdle to Newmont’s takeover of Goldcorp.

Miners from the same union went on strike at Cerro Negro in 2015 over working conditions. It was resolved after the provincial government laid out measures to be carried out by Goldcorp.