(Reuters) - Gold and silver miner Hochschild Mining Plc has suspended operations at its Arcata precious metal mine in south west Peru, saying a low silver price had left it no choice but to halt production at the mine.
The company, which operates three mines in southern Peru and one in southern Argentina, said the mine would be on “full care and maintenance” status by the second quarter of 2019.
“This decision has been expected but is still disappointing for the organisation ... but the continuing low silver price over some years and current geological conditions leaves us no option,” Chief Executive Officer Ignacio Bustamante said in a statement.
He thanked what he said was an outstanding workforce and supportive communities for their work on the mine and said the company would work closely with its employees and contractors to mitigate the impact in a staged shutdown of operations.
Silver prices averaged about $15.7 in 2018, a far cry from its record of $49.5 in 2011 and about 8 percent below its 2017 average.
The company said it would continue to do exploration work at Arcata, the company’s first mining operation dating back to 1964, and would regularly review market conditions for a potential restart of operations in the future.
Hochschild last month set a 2019 production target of 457,000 gold equivalent ounces and 37 million silver equivalent ounces, excluding Arcata.
Reporting by Noor Zainab Hussain in Bengaluru