A Canadian silver miner lashed out at the Peruvian government Monday after the latter cancelled the former's mining license.
Bear Creek Mining Corp. said Peru's move over the weekend to cancel the company's right to develop the Santa Ana project was "illegal and unconstitutional" and threatened serious consequences to the move.
"We followed all the rules. We got public consent. We're in the middle of an environmental impact statement. It was due process. Everything was within the letter of the law," CEO Andrew Swarthout said.
Six people were killed and at least 30 wounded on Friday at a bloody protest at an airport in Juliaca, in the state of Puno, roughly 160 kilometres away from the site. Police fired on mostly indigenous protesters opposing the project.
Opponents to the project say they fear the water in Lake Titicaca will become polluted if the mine goes ahead. That won't happen, TSX-listed Bear Creek says, claiming they're in full compliance with Peruvian law and they have consulted with local groups at every stage of the project.
Swarthout says the protests were politically motivated and originated from outside the communities concerned.
Left winger Ollanta Humala won a recent election in Peru, and has promised changes to the country's economy when he takes office at the end of July.
"We continue to believe that these protests and government responses are the result of the pre-election political climate," he said.
Bear Creek has already spent $96 million on the project. The license was originally granted in 2007 and the mine was set to be operational in 2012. Bear Creek says the mine will produce 47-million ounces of silver a year throughout the mine's 11-year lifespan.
It will create 1,000 jobs and give the people of Peru more than $330 million in royalties, the company says.
Bear Creek shares sold off sharply on Monday, losing 25 per cent after the TSX opened to trade at $3.87.
Swarthout has warned previously that any attempt to end the project would give pause to international investors who have announced their intention to plow more than $40 billion into Peru's mining sector in the coming decade.
Mining already makes up almost 70 per cent of Peruvian exports.