Scotiabank on Belo Sun Mining's Suspension Order 01:23 PM EDT, 05/25/2022 (MT Newswires) -- Belo Sun Mining received an interim suspension order issued from a circuit judge in Altamina over the Construction License (LI) and Environmental License (LP) for the Volta Grande Project.The LI and LPare to be suspended until a socio-environmental study of the riverside peoples is carried out for people living at a minimum distance of 10 km from the Volta Grande Project on both sides of the Xingu river.
Belo Sub, which believes that all local and riverside communities have been properly heard during the licensing process conducted by SEMAS (State Environmental Agency) and that there is no need for additional hearings, intends to appeal.
"We expect investors to view this latest development as a near-term negative for BSX shares. The company recently provided an update stating that it was working towards re-establishing the construction license and relevant jurisdiction. We look forward to additional updates regarding next steps on this legal challenge and the path forward to reinstatement of the licenses," says analyst Ovais Habib.
Habib, who has a negative take on the news, notes that BSX shares are rated SP with a $0.65 PT. At spot prices, Belo Sun shares are trading at a P/NAV5% of 0.11x compared with development peers trading at an average of 0.58x.