Canadian-owned silver mine nationalized in Bolivia

VANCOUVER—A Canadian company is protesting Bolivia’s decision to revoke its license to mine a rich silver deposit in the country and nationalize the project.

The license was cancelled following opposition from Quechua Indians who had seized workers employed by South American Silver Corp. to press their case.

The Vancouver-based miner said it still had not received any formal notice from the Bolivian government about the cancellation.

“We strongly object to the government’s stated course of actions and we will pursue all legal, constitutional and diplomatic options,” said Greg Johnson, president and CEO of South American Silver.

The company described the Bolivian government’s move as “surprising in light of the fact the company continues to receive the support from the 43 out of 46 indigenous communities in the project area.”

On Tuesday, President Evo Morales presided over the signing of an agreement with two Quechua communities that opposed the project in the southern highlands.

The communities released two mining engineers over the weekend after holding them for 10 days. Three other engineers were held for five days before fleeing.

South American Silver estimates the deposit’s reserves at 140 million ounces.

The company says since 2007 it has invested more than $16 million in the discovery and exploration of the site in the Andean region of Malku Khota.

“Ongoing exploration and any future mine development would result in up to 1,000 jobs for local workers in the community,” South American Silver said.

Meanwhile, South American Silver says it continues development work at the Escalones copper-gold project in Chile and remains financially sound with over $38 million in cash as of the end of the first quarter.

—With files from The Associated Press