Shares in Gatos Silver (NYSE, TSX: GATO) fell as much as 7% mid-morning on Thursday in New York on the news that the company had to halt operations at its 70%-owned Cerro Los Gatos silver mine in Mexico, following the suspension of its explosive and blasting permit.
Mexico’s Ministry of Defense temporarily froze the Denver, Colorado-based miner’s permit last week, the company said, following a blasting incident during underground development activities where two blasts were detonated prematurely.
Gatos said the processing plant had continued to operate normally, but it would be shut down today for a scheduled maintenance.
The company expects the permit will be reinstated shortly and said it does not expect any material impact to current production plans or annual guidance.
Gatos Silver said earlier this month that production of the grey metal hit a record 2.39 million ounces during the first quarter of 2022, a 58% increase over Q1 2021. The company attributed the production increase primarily to significantly better silver grades, in addition to higher plant throughput and improved recoveries.