Tahoe: Escobal to add 2% to Guatemala's GDP

Vancouver-based Tahoe Resources' (TSX: THO, NYSE: TAHO) Escobal silver project will contribute an additional 2% to Guatemala's GDP once in production, the company said in a statement. Responding to "misinformation" regarding the project, including claims the company will "take all profits out of the country," Tahoe said Escobal will more than double the 1.89% the mining sector currently contributes to GDP, generating an additional 2%, and will be the country's largest taxpayer. Forty-two percent of the project's revenues will remain in the country for taxes, royalties and voluntary contributions, Tahoe said, on top of "significant" spending on Guatemalan goods and services and an average of US$17.1mn annually on Guatemalan wages and salaries. The company also denied claims that the Escobal project lacks social license, with several municipal councils expressing support in a press conference in July, and opposition led by "a small group of opponents who refuse to engage in meaningful discussions." The project has been affected by protests and blockades, some of which have turned violent, while contractor truck drivers were attackedin April. Tahoe uses only "defensive methods" to protect employees, and has at no time used "lethal force or intimidation," the company said. Tahoe also dismissed reports the project will "drain and contaminate" water supplies, saying fresh water will be drawn from deep aquifers which are not used by local wells, with water treatment facilities ensuring any water discharged "will be cleaner than the water currently flowing in the natural waterways." Initial production of metals concentrates is expected to begin in the late third quarter of 2013. Tahoe has agreed to pay a voluntary 5% royalty from Escobal, which is expected to produce 20Moz silver annually for 10 years from 2017. In July, Guatemala's President Otto Pérez Molina proposed a two-year mining moratoriumwhile new legislation is drawn up aimed at resolving opposition to the industry by some sectors of the community and by NGOs, to allow time for a "national dialogue" between all parties on how to take mining forward. To see the full Tahoe statement click here