Luna Gold Corp. (
TSX: T.LGC,
Stock Forum) said Monday it has temporarily halted operations at the Aurizona gold mine in Brazil.
Access to the mine has been constrained as local community members demonstrate against local government concerning the progress of government-sponsored infrastructure project,
the company said in a press release.
In order to ensure the safety of its employees, the company said it decided to suspend operations until the situation gets resolved.
“Luna is optimistic that the parties will reach agreement soon and the mine will recommence normal operations,” the company added.
Luna Gold shares fell 1.5% to $1.35 Monday, leaving a market cap of $141.8 million, based on 105 million shares outstanding. The 52-week range is $3.95 and $1.04.
The Aurizona Gold mine is located in Haranhao State in northeastern Brazil and is operated by a Brazilian subsidiary of Luna, employing approximately 630 people from surrounding communities.
The mine produced 20,997 ounces in the third quarter of 2013, at a cash cost of $751 per ounce and an all-in cost of $958 per ounce.
Gold production in 2013 was expected to be at the lower end of a target range of between 80,000 ounces and 90,000 ounces per year, marking a slight increase from 74,000 ounces in 2012.
Three years ago, Luna was the target of an armed robbery, when thieves escaped with some 1,500 ounces of gold, worth around $2 million, an event that pointed to security problems for gold miners operating in isolated areas.
No employees were reported as being injured during the robbery.
A phase one expansion plan is expected to boost production to 135,000 ounces per year.