Bear Creek says Peru court renews right to revive silver project

LIMA Wed May 14, 2014 6:51pm EDT

LIMA May 14 (Reuters) - Canadian miner Bear Creek said Wednesday that a court ruling in Peru has renewed its legal right to develop its stalled Santa Ana silver project, which was suspended in 2011 after protests against it turned deadly.

The First Constitutional Court of Lima ruled in favor of Bear Creek and rescinded a 2011 decree that revoked its authorization for developing the mine in southern Peru, according to a copy of the ruling provided by the company.

The government can appeal the decision, and Bear Creek has said it would not resume the project unless local communities support it.

The company has threatened to sue Peru over the dispute in an international arbitration court under free trade protections.

"Today, given this new context we're going to assess the government's reaction and how to best continue making progress," said Andres Franco, a vice president for the miner in Peru.

Representatives with the finance ministry, which is now charged with negotiating with Bear Creek, were not available for comment on Wednesday.

Finance Minister Luis Miguel Castilla said in March that Peru intends to resolve the dispute through dialogue before it can reach international arbitration.

Bear Creek, which hoped to use Santa Ana to help finance its bigger Corani mine, was nearing construction on the project when deadly local protests led outgoing President Alan Garcia to nix the company's permission for operating in the area.

(Reporting By Mitra Taj; Editing by Bernard Orr)

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