Tahoe Resources (TSX: THO; NYSE: TAHO) is suspending dividend payments and company-wide guidance due to the temporary suspension of its flagship Escobal mine in Guatemala.
The decision to suspend the monthly 2¢ per share dividend will save the company about $65 million in cash a year, the company’s president and CEO, Ron Clayton, told analysts and investors on a conference call.
“As most of you are aware, when we built Escobal, we intended to return a portion of our free cash flow from the mine to shareholders via a dividend program, while using the remaining cash flow to fund our growth projects,” Clayton said. “Without that cash flow, the dividend had to be re-evaluated.”
In early July, the Supreme Court of Guatemala suspended Escobal’s mining licence until it can hear an action brought by CALAS, a non-governmental organization, against the country’s Ministry of Energy and Mines, regarding the company’s mining licence.
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