McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) reported on Monday that its El Gallo project in Mexico has been temporarily suspended due to an illegal blockade of the main access to the property by members of nearby communities.
According to the company, certain individuals involved in the blockade believe that the annual payments and infrastructure improvements made to the local communities should increase significantly.
“El Gallo has operated harmoniously with the local communities since mining started in 2012, having demonstrated a long-standing track record of supporting local communities,” the company said in a statement, adding that “in this context, the current situation is surprising.”
The site remains minimally staffed to maintain appropriate safety and security, and the environmental systems. McEwen is currently negotiating for a peaceful resolution to the issues.
The El Gallo mine, located in Mexico’s Sinaloa state, has been residual heap leaching since Q3 2018 and is expected to contribute 3-4% to the company’s gold equivalent production in 2021.