Glamis considers legal challenge to anti-mining referendum - Guatemala

Glamis considers legal challenge to anti-mining referendum - Guatemala

Thursday, June 16, 2005

Aiden Corkery BNamericas.com

Glamis Gold (TSX, NYSE: GLG) could make a legal challenge to the outcome of a referendum being held in the Guatemalan municipality of Sipacapa on whether to allow future mining exploration, the company said in a statement.

The Nevada-based miner has criticized Sunday's (June 18) referendum, saying it has been organized by a small group of private individuals who pressured the municipality authority into holding it.

Glamis senior VP Charles Jeannes told BNamericas that although the referendum's outcome is not yet know, the company would consider bringing a legal challenge against the referendum should it be passed.

"I think we or other residents of Sipacapa who don't agree with what's happened would pursue a legal action to have a court say whether or not it's legal," Jeannes said.

Referendum advocates argue the government has awarded mining concessions without involving affected communities in the process. Glamis denies the charges.

CONCESSION INTEREST

Glamis holds one exploration concession in Sipacapa, while a section of its Marlin exploitation concession also lies inside municipal boundaries. Glamis previously carried out some drilling in the Sipacapa section of the Marlin exploitation concession but did not discover any significant mineralization.

But the company has not ruled out carrying out further exploration in either of these concession areas. "We're certainly not going to walk away from our investment," he said.

COMMUNITY VOTE

Glamis said the vote will be carried out by a public show of hands and added that it has received reports of locals being intimidated by the organizers.

In addition the referendum is contrary to Guatemalan law as the national government - not local municipalities - decide issues of mineral tenure and access, Glamis said.

In an interview with local Guatemalan newspaper Prensa Libre this week, Sipacapa's mayor said the vote would be carried out according to local community customs.

Commenting on this, Jeannes said he believed it is more important to be in compliance with national law.

"It's not for us to say what the local customs are but our view is that it's not in accordance with Guatemalan law," he said. "It's a public vote and there have been many reports to us of threats and intimidation. That doesn't seem a very fair way to hold a vote."

Meanwhile Jeannes said that a number of Glamis employees and representatives will be present for the vote.

"We have a lot of employees from Sipacapa. We also have community development team members and there will folks in town observing what happens, you bet."