Meridian hammered by Esquel doubts

Locals living near Meridian Gold‘s (MNG-T) Esquel gold project in southern Argentina have voted overwhelmingly against its development.

The non-binding referendum, held in the city of Esquel on March 23, saw a 75% turnout, who voted 80% against the mine.

Meridian contends that the referendum was a “gauge of the negative false information disseminated to the local community by organizations opposed to mining” and that, had the referendum occurred following the publishing of the water study in April, as recommended by the Provincial Legislature, the residents of Esquel would have been “more informed [and] therefore supportive.”

The water study, assessing the impact of the mine on the city of Esquel’s water sources, will be audited by the Argentine National Institute of Water and published.

Following the release of the study, a public hearing will be held, and then the provincial government will rule on the issuance of mining permits.

The local population is said to include 55-year-old millionaire clothing magnate Douglas Tompkins, founder of the North Face and Esprit lines, who has become a devoted environmentalist.

“We believe that over the next several months, with increased interaction with the community on critical issues like the water study, the Esquel community will be convinced of the environmental safeguards and the benefit of the mine for the local, Provincial and Argentine economy,” said Meridian CEO Brian Kennedy.

Meridian says it will continue its exploration program as scheduled and will work to complete the permitting process.

Meridian’s stock was hammered on March 24th, the first day of trading following the referendum, dropping 14.6% to $13.45 in Toronto and 16.6% to US$9.05 in New York trading. This compares with 52-week highs of $32.98 and US$20, respectively, achieved less than six months ago.