Shares slipped as low as C$4.92 Wednesday morning on the TSX Venture Exchange, but recovered to C$5.31 by midday, still down 3 percent. The company has lost about 45 percent of its value since Jan. 1, when shares opened at C$9.70.
Protesters started to retake control of highways on Wednesday in the Puno region, some 1,385 kilometers (860 miles) from Lima, after putting protests on hold ahead of the country’s election on Sunday. [ID:nN08233995]
The demonstrators, most of them Aymara aboriginals who say they are concerned about pollution, are demanding a halt to all mining in the region.
Bear Creek Chief Executive Andrew Swarthout said he was frustrated that his project was being linked with the potential pollution of local lakes, including storied Lake Titicaca, which sits between Bolivia and Peru.
“Santa Ana is a zero discharge facility, so it can’t contaminate anything,” he said.
“Not only that, it’s located in a different basin. So even if there were potential to contaminate, it wouldn’t go into the Lake Titicaca system.”
Last week, the Peruvian Ministry of Energy and Mines suspended Santa Ana’s environmental and social impact assessment process until May 2012. [ID:nN01147181]
The government also tried to calm protests by promising to turn a broad stretch of land in Puno into a nature reserve.
Bear Creek had originally planned to have the silver mine in production by 2012. Swarthout said as soon as President-elect Ollanta Humala’s new government is in place, the company will look to start a dialogue over permits.
“I think we have a chance to shorten that May 2012 date,” Swarthout said. “But we’re not counting on it.”
Humala, who is well-liked in the poor provinces, has said he will work to end social conflicts over natural resource projects that have plagued companies.
Bear Creek also owns the Corani project southwest of Lima, which could produce some 10 million ounces of silver annually for its first six years, as well as various exploration targets in the Andean nation.
While investors have pulled out of the Vancouver-based company on fears over the protests and the election of Humala, analysts remained relatively positive.
“We still believe the Santa Ana development will proceed,” said Paradigm Capital analyst Don Blyth in a note to clients. “But cooler heads must prevail to examine the project with fair and objective criteria.”
Blyth cut his target price for Bear Creek to C$9 from C$12, based on the assumption of higher taxes and royalties, and a longer timeline for permitting. Other analysts have also cut their targets for the exploration company.
Shares of Rio Alto Mining (RIO.V), which is developing a copper-gold project north of Lima, have tumbled in recent weeks. It rose 2.3 percent to C$2.25 on the TSX Venture Exchange Wednesday afternoon, while Peruvian gold miner Minera IRL (IRL.LM) was up 5 percent at C$1.05 on the Toronto Stock Exchange’s main board.