Guatemala will reinstate the license - they need the money as much as TAHO.
Anyone any idea why the stock is rising??? Any real news regarding the license??
The way it reads to me is that the mine will lose its license April 1st of 2018 with no regard of negotiations being deployed to resolve dispute. Supreme court and another government agency . So is that the window for resolve. Besides temporary suspension of operations.
The Guatemalan court put a stay on the license while they look into the claims that "local groups" were not consulted. They have not officially pulled the license. If they determine that there was no wrongdoing the license will be reinstated, but they could also permanently revoke the license. Given this is their flagship mine....it is a big blow to their bottom line. It very well could keep trickling lower until there is a final resolution. Currently their financials are steady, however, this could change rapidly if Escobal remains on hold for an extended period of time. To be perfectly honest, I'm torn. However, I am leaning towards taking the loss at this point. If the Guatemalan courts are anything like our courts, you could be looking at 6,9,12 months before a resolution. And TAHO's share price would simply continue bleeding (especially if they suspend the dividend).
I think the political pressure from 17,000 employees, suppliers, and tax collectors who are being harmed will result in a quick "stay " of this unfounded action, including many indigenous people. I quadrupled my holdings after the action and factual info presented during conference call of 7/6.
Overreaction.... the company is not debt loaden, it has sufficient cash. The suspension is temporarily - and if the claims of Tahoe are right - then 30 km southeast of the capital guatemala city there is no indigenous population who should have been consulted. Final decision can only be the resuming of the operations. Drop is a gift for long time investors
It is usually the government that steps in and puts the operations at risk because they want more participation in profits etc. I thought all the nut job libs were in California, they have spread into South America. Lots of local people are out of jobs, will be tough to rationalize
In investment sense, things depend on timing, folks. If it is 6 months delay then buying now would be very challenging, just to say the least. Share price would definitely go lower if break in Escobal production is prolonged. Other TAHO mines are hardly profitable with present gold price and quarterly reports would show it quickly enough. In other words, buying now could be very good in case the mining license is reinstated and production resumes before Q2 earning report, i.e. in about a month. If it is not resolved so quickly then it may wait until Q3 earning report, i.e. 4 months from now, but it would be less pleasant for shareholders. Anything longer than 4 months means that buying right now is a mistake. As you see, it is always unclear when it comes to actual stock buying. Of course, near-term gold/silver pricing means a lot here too. Personally, I plan to take this gamble next week, but I would be very quick to take profits if share price show any kind of near-term recovery, i.e. without any news.
It was a wonderful 2-day ride, folks. Please accept my best wishes for long-term holders here. Hope, Escobal mine will come back in short period of time. Good luck.
It looks like a technical bounce. Perhaps, some shorts took profits and covered. Hope, it continues tomorrow; after-market number looks optimistic.
do you guys think that halting production of one mine (yet weighing 40% of revenue) for 3-4 months will cost 1 Billion? (30% of market Cap)
Why would TAHO declare a dividend if they thought they would be financially squeezed because of the Escobal shut down ?
Look to option pricing for a clue to the sentiment. Specifically, the at-the-money options.
Dec $2.50 calls are bid $2.50, ask $2.75? Last trade $2.55. Close to zero premium, which would imply a nearly riskless trade IF you believe TAHO is going to rise from here.
By contrast, the $5.00 puts are bid $0.75, ask $0.90.
Sell. This is a gold and silver mining company that doesn't mine gold & silver. They just lost their flagship mine with no clue as to if or when the license will ever be reinstated. Bad management to allow this to happen. Bankruptcy in 1-2 years.
Something just happened?
TAHO is down 21.33% @ 6.53
Haha. Oh the fake lawsuits. Anyone who followed NAK since February can attest to their total lack of meaning.That said, I'd caution longs to prepare to average down while the shorts revel in this supposed bad news like pigs in #$%$. Unlike NAK, this is a fully developed mine with solid financials. Take advantage of the dips and ignore the negativity. This stock will be fine once the legal nonsense is dealt with and the shorts find another easy target to exploit.
Resolving this issue could take a very long time, perhaps several years or more. Reference the 'Mexico" tax issue that PPP has been hampered by for two years or more.
Probably, the whole setting is political, folks. Either company would have to pay local "court officials" and other "officials", or it finds way to get support form US government, explaining Guatemala that fair treatment of a company, headquartered in Nevada is important.
Time to sell the whole Company to the best bidder. So thge right thing find a buyer.