UPDATE 3-Guatemala floats plan to take 40 pct stake in new mines
* Guatemala plan applies to new projects, not existing mines * Government to propose changes to Congress on July 9 * Canadian mining shares tumble By Mike McDonald GUATEMALA CITY, June 28 (Reuters) - Guatemalan President Otto Perez Molina is floating a proposal to change the constitution to allow the government to take up to a 40 percent stake in new mining projects in the country, a government spokesman said on Thursday. News of the plan hit Canadian mining companies working in Guatemala, especially Tahoe Resources Inc . The government spokesman, Francisco Cuevas, told Reuters the changes would not apply to companies already operating in the country, only to future mines. "It is an executive proposal for non-renewable resources. The government would become a partner in 40 percent of the properties," Cuevas said. "This is a result of looking at mining policies in Chile, Bolivia and other countries who have used a similar model." The proposal has not been formally presented to Congress yet and is being discussed with different stakeholders, including businesses and the mining ministry. Changes could be made to the plan before July 9, when it will be formally presented to Congress for debate along with a package of other constitutional reforms. Guatemala's vice minister of mines, Jose Miguel de la Vega, told Reuters the ministry was not involved in drafting the plan. "It is part of the constitutional reforms, but there has already been a counter proposal saying it would limit (mining investment)," de la Vega said. SHARES TUMBLE Shares of Canada's Tahoe Resources plunged after the initial media reports of Guatemala's plans. Tahoe Resources is 40 percent-owned by Canadian gold miner Goldcorp Inc. Its chief executive, Kevin McArthur, is a mining industry veteran and a former CEO of Goldcorp. Vancouver-based Tahoe, which went public in 2010, acquired its flagship Escobal silver asset at the time from Goldcorp for roughly $500 million. The development-stage project is located some 70 kilometers (40 miles) southeast of Guatemala City. Tahoe issued a statement on Thursday saying it had spoken with officials at Guatemala's mining ministry and was assured the proposed reforms would not affect its Escobal project. "The government has no intention of acquiring an interest in the Escobal project or other mining projects in the country," the company said. Tahoe said construction of the silver mine remains on track and it expects to have the project fully permitted in the second half of 2012. Its shares were down more than 18 percent at C$13.16 in Thursday afternoon trading on the Toronto Stock Exchange, having recovered slightly after plunging more than 39 percent earlier in the day. Tahoe's New York-listed shares fell nearly 20 percent to $12.70. Goldcorp also owns the Marlin gold mine in Guatemala, which produced 382,400 ounces of gold in 2011 and generated revenue of over $900 million. A spokesman for Goldcorp said the company had held discussions with high-level Guatemalan officials today and was informed that the proposed mining law changes would not impact its Marlin mine operations. Shares of Goldcorp dropped 4.2 pct to C$36.78 on the Toronto Stock Exchange. Radius Gold, which is developing the Holly-Banderas project in Guatemala, fell in early trading before snapping back. At the beginning of the year, Guatemala revised its mining royalty rules to raise the amount paid by base metals miners from 1 percent of earnings to 3 percent. It raised precious metals royalties from 1 percent to 4 percent. Goldcorp said in January it would also pay an additional 1 percent voluntary royalty to mostly help the development of local municipal bodies.
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