Pan American Silver (PAASF) – CVR – 100% Upside

Current Price: $0.82

Offer Price: $1.65 (updated, see comment below)

Upside: 100%

Expiration Date: Q1 2029


IMPORTANT – the case has been updated and brought back among the active ideas – see this comment. The write-up below refers to an earlier arbitrage situation from 2021 (was closed with 50% gain in Sep’21) and provides a background for the current case.


This is a fairly interesting CVR situation, which involves high uncertainty due to some political aspects in a third-world country and potentially extended timeline. However, the upside is quite attractive and several recent developments have increased the chances of a favorable outcome. But keep in mind that this situation is in the mining industry, where things rarely turn out as expected.

In early 2019 one of the major silver/gold players, Pan American Silver, acquired Tahoe Resources. The consideration included a contingent value right (ticker PAASF) exchangeable into 0.0497 PAAS shares upon restart of the Escobal mine – the flagship asset of Tahoe. The restart will be considered effective upon the first commercial shipment of concentrate. The rights expire only in 2029 (arrangement agreement), so there seems to be plenty of time for positive developments. At current prices the spread between PAASF and PAAS stands at 100%. It’s possible to play this trade both hedged and unhedged, however, unhedged trades leave investors exposed to silver price fluctuations. Plenty of cheap PAAS borrow (0.34% annual fee) available on IB.

The mining operations in Escobal have been suspended since 2017 due to certain opposition from anti-mining group and locals claiming that the government has violated the rights of consultation of the local Indigenous Xinca community when the mining license was issued in 2013. In September 2018 the constitutional court ruled that in order to restart the mine, a 4 stage (review, pre-consultation, consultation, and court approval) consultation process is required – the decision was based on the International Labor Organization (ILO) convention rule 169. The review stage was completed rather quickly and at the time operations were expected to resume at the end of 2019/early 2020. However, since then the process has stagnated due to various political nuances, Guatemala’s government elections (end of 2019), and then the COVID-19 outbreak. On a positive note, the newly elected government appears highly interested in resuming Escobal mining operations and has already started pushing the process forward. Several other aspects also suggest that the mine is likely to get restarted.

The timeline is quite uncertain at the moment, however, stage 2 (pre-consultation) is set to start in April and is expected to take 2-3 months. The consultation stage should follow after that.

Risks involve potentially extended timeline, questionable political situation in Guatemala (see the risks section below) as well as hedge/silver exposure-related caveats. And there is always a risk that PAAS will wiggle out of CVR liabilities, however, the conditions for conversion seem really straightforward – the first commercial shipment of concentrate from Escobal.


The new government wants a quick conclusion of the Escobal restart process

On the 14th Jan’20, Alejandro Giammattei was elected to be the new president of Guatemala. He is a strong supporter of the mining industry and has promised to “restore confidence n the mining industry within his first 90 days in the office” and a swift conclusion to the Escobal situation. Due to the COVID-19 outbreak shortly after, the plans got delayed substantially. However, the president indeed took action to back up his words: declared martial law in two other states opposing mining operations and appointed Juan J. C. Alonso as a Special Secretary to the Vice President. From 2013 to 2019 Alonso acted as a general director of the Guatemalan subsidiary that operates the Escobal project (now called Pan American Silver Guatemala) and was responsible for obtaining the Escobal mining license back in 2013. Moreover, Escobal consultation has been pushed forward as well – the government has finally recognized 59 consultation representatives of Xinca indigenous community, which was a major hurdle in the whole process.

After more than two years, the date for the pre-consultation stage has now been set for April’21. The pre-consultation stage is expected to take a few months and move towards the consultation stage.

The Supreme Court favors the interest of the mining industry

Certain reports from the anti-mining, opposition groups portray a very biased Supreme Court, which is looking out for the interests of the mining giants instead of the local communities. over the last two years the supreme court has completely ignored numerous claims from the Xinca Parliament and has eventually rejected them:

The Supreme Court issued a blanket rejection of all the legal chanllenges presented by the Xinka Parliament relating to the failure of the government and company to comply with the key aspects of the Constitutional Court order, signaling the court’s intention to clear the way for the process to proceed despite procedural errors and violations of due procvess dating back to 2018.

Moreover, in 2017 the Supreme Court has already tried to reinstate Escobal’s mining license. The decision was appealed by the anti-mining group, so the operations were not restarted (see the timeline below). Nonetheless, this clearly shows that once the consultation stage is over, the court’s approval should not be an issue.


PAAS incentives are properly aligned here

Another positive aspect is that in contrast to the usual biotech industry CVRs (where the buyer has strong financial incentives to avoid CVR  payouts), PAAS is actually very interested in restarting Escobal and hardly has any way to avoid the CVR payouts given the expiration only in 2029.

2019 annual report shows PAAS proven and probable resources (ex. Escobal) at 265m and 27m ounces for silver and gold respectively. During 2019 the company has produced 26Moz of silver at an average AISC (all in sustaining costs) of $10.46/oz. The size of the proven and probable silver reserves of Escobal mine is almost the same size as the rest of PAAS silver reserves – 265Moz. Over the twelve operational months before the shutdown Escobal was producing 21Moz of silver at AISC of $8.63/oz. So the mine is a very important asset, which when restarted, will double the silver resources and double the low-cost silver production of Pan American, while potentially increasing revenues of the company by 14% (based on 2019 data).

Despite that, the dilution effect from the CVR conversions would be quite negligible (7%).

PAAS currently seems to be is actively involved in the consultation process and has recently started various social/community programs to win the favor of the Xinca people:

The company was collecting signatures and identification numbers in exchange for food supplies, reminiscent of company tactics used to fabricate support for the project before it went into operation in 2014

Such actions were condemned by the Xinca parliament accusing the company of lobbying/bribing local communities:

According to the Xinka Parliament, the company is using the COVID-19 pandemic to expand outreach at the community level, increasing tension and conflict between communities willing to receive aid from a transnational mining company and those who are not.

It is worth repeating that PAAS acquired Escobal not before but after the license suspension and after the requirement of the currently ongoing consultation process was put in place.

Total consideration paid for Tahoe Resources amounted to $1.1bn (25% cash/75% stock). The value of CVRs if fully converted at PAAS prices at the time of the merger stood at $0.25bn.


The price of the CVR is relatively attractive

CVR is now priced at $0.82 vs $1.65 intrinsic value resulting in 100% spread. Right before the close of PAAS/TAHO merger the shares of the target were trading at a premium to cash+stock consideration (ex. CVR). Assuming zero risk of merger closing on the last few days of trading, the price paid for the CVRs also provided a similar upside in Escobal mine reopening scenario.

So essentially, at the moment CVRs are priced at the same level as two years ago, while the outlook seems to be much better – since then the new ‘pro-Escobal’ government was elected, the Supreme Court appears supportive of PAAS interests, and the Escobal reopening process is fast approaching the pre-consultation stages.


Long expiration timeframe of the rights

CVRs have a 10-year expiration date. The long remaining time till expiration provides a sufficient margin of safety for any further potential delays, however, the whole Escobal reopening process is likely to be concluded much faster.


Structuring the trade

Both unhedged and hedged positions are possible here. Going long-only would leave one exposed to silver price volatility. Historically, PAAS price has been highly correlated with silver prices (both are elevated at the moment, see the graph below). Meanwhile, hedging involves a risk of getting burned from both sides of the trade – e.g. if the silver prices shoot up, but eventually, it appears that CVR conditions won’t be satisfied in time/at all). 

For tracking portfolio, we are adding a hedged position.

paas SLV comparison



  • Stability of Guatemala’s political situation is questionable. Apparently, the newly elected government and certain proposed bills did not receive a warm welcome from the common people. Due to the budget cuts in healthcare and education, the country saw a massive riot in November, with people burning part of the congress building. The protests are still continuing (here and here). The situation with the anti-mining groups is also tense – in January’21 leader of the opposition was shot, while other leaders are reportedly constantly being threatened as well.
  • The current government will be out in 2.5-3 years and if the matter with Escobal is not settled until then, new government might be less supportive of the project. On the other hand, the mining sector is very important to Guatemala (around 2% of GDP), while Escobal is the largest mining project in the country. According to EITI, the fall of mining contribution from 1.5% to 1.2% of GDP from 2016 to 2017 was attributed to the Escobal suspension. Thus, the chances are that the new government will also be incentivized to push the reinstatement process, if it is not finalized by that time yet.
  • Increase in borrow fees for hedged trades (currently at 0.34% annual). This could potentially make a substantial impact on the upside if the timeline proves to be longer than expected. However, given the size and liquidity of PAAS, the increase in fees should be somewhat limited.
  • There is a risk of getting burned from both sides of the trade for hedged positions – i.e. in the scenario where Escobal does not resume operations and PAAS share price continues to increase.
  • Exposure to silver prices and decline in PAAS share price for unhedged trades.


Outline of events

Many details on the background can be found in this report (as depicted by the opposing side, so could be biased).

  • April 2013 – Escobal receives the mining license in Guatemala. Locals are opposing this and organize various protests, referendums, etc. Opposition/anti-mining groups claim that the protests were handled with repression, martial law in surrounding municipalities, jailing opposition leaders, etc.
  • 2014 – Escobal starts mining operations.
  • May 2017 – anti-mining organization, CALAS, files a claim in the Supreme Court alleging that by granting the license government has violated the right of consultation of the Indigenous Xinca communities that live close to the mine.
  • June 2017 – anti-mining groups and locals start a road blockade near the town of Casillas, which causes delays in transporting supplies to the mine. Tahoe Resources (owned Escobal mine at the time) claims that they are attacking the employees and have even shot at the helicopter, which was transporting fuel to the mine.
  • July 2017 – Supreme Court suspends Tahoe Resources (owned Escobal mine at the time) mining license based on CALAS claim.
  • September 2017 – after a hearing Supreme Court issues a definitive decision underlying the claim and reinstates the mining license. The ruling allows Escobal to continue operations during the consultation. CALAS appeals the decision and the operations are eventually not reinstated (partly due to the road blockade as well).
  • October 2018 – Constitutional Court issues a preliminary resolution and orders a continued suspension of the mine, while the 4 stage consultation with Xinca people (according to ILO 169) is conducted.
  • January 2020 – new government and president Giammattei are inaugurated to the office.
  • October 2021 – Guatemala’s mining ministry (responsible for conducting the consultation) finally agrees to accept 59 representatives (instead of 2-3, which were required) from the Xinca Parliament to participate in the consultation process. This was a key barrier to starting the pre-consultation stage.
  • April 2021 – the pre-consultation stage is expected to begin and last a few months.


Pan American Silver

PAAS is a $7bn gold/silver mining conglomerate with numerous mining assets in Africa and NA (January presentation):


The company generates majority of its revenues from Gold, however, most of the PAAS reserves are in silver (half of it in Escobal):

paas metals sold



Escobal summary (January presentation):


Comparison with other primary silver deposits:

escobal 1




34 thoughts on “Pan American Silver (PAASF) – CVR – 100% Upside”

  1. What happens if the mining ownership / royalties get restructured? Is the CVR still valid?

    I don’t know much about the situation but here are a handful of counterpoints to mine restart…in a past life I worked at the intersection of extractive industry community development programs to secure social licenses to operate….

    The worse parts of Tahoe Resources’ original community development strategy was to:
    1) deny that the indigenous peoples existed (paid radio campaigns announcing this) or had any rights in the area
    2) kill opposition leaders in the early 2010s who were opposed to the mine. (Well they were operating in Guatemala one of the most violent countries in Latin America during that period)
    3) support the national political process over a local Free Prior Informed Consent (FPIC) process for communities which is the standard international protocol for human rights (best practices XOM in Papua New Guinea for example can create a financially successful project and community support).
    4) ignore aquifer’s recharge rate in the mine’s design causing a number of local springs in the area to dry up, and thus causing a number of villages to be moved since they lacked access to water.

    Community opposition for the last 3-years is a 24h blockade of roads and receiving international support from significant organizations such as Business Center for Human Rights & Oxfam.

    Here’s a reference article describing the opposition community’s perspective

    Now opposition isn’t a unified block and there are a number of tactics/strategy that can be run to get the project done but a lack of talent in finessing the work when things get as ugly as Escobal makes it easier said than done.

    Give it time (3-5 years), a high silver price sustained, and PAAS partnering with actual community leaders to structure long-term benefits to local communities before this project restarts and CVR pays out….so time value of money that 100% spread to 2025 and hey it’s not a bad ROIC.

    • > kill opposition leaders in the early 2010s who were opposed to the mine.

      Kill as in assassinate? You got a source for that?

      • Interesting, I thought this was a thing from the past and didn’t really happen anymore in the age of social media. It seems really counter productive and short sighted even if all you care about is money.

  2. Also looks like PAAS is still employing John Serna the former sustainability lead for Tahoe in their consultations….idiots at PAAS, this could take 5-7 years…

    For example, the community opposition compares John Serna’s latest comments at a meeting to declarations of a person who enters someone’s house, kills their family members, and then asks for forgiveness and to stay. Community opposition wants the mine to disappear. They live there it’s their ancestral lands where they can live in a semi-traditional way….it’ll take another generation for that to take another step into the outside world….and the community opposition says they are “unbreakable…willing to risk their lives to stop the mine…..nothing has changed [with new ownership].”

  3. Looks like there are still assassinations happening…..typical tactics by the old guard extractive industry license to operate folks against environmental/indigenous activists…..You’d think Ross Beaty has enough money and experience to work through this but clearly needs a wake-up call…. I don’t know PAAS maybe they have enough reserves to let this take whatever timeline it needs….

    If any of this type of violence is surprising to you reading this I recommend taking a moment for gratitude at the luxury and privilege you enjoy.

  4. Taking into account, that the third-world countries like Guatemala don’t have any democracy, and the bribery made by Companies is okay and not punished, to my mind, the restart of Escobal has quite high probability.

    • It’s not uncommon, I remember Barrick’s gold mine in Tanzania on a good day having 50 locals with machetes outside but they could be given work….there’s a strong anti-capitalist/western world culture in the indigenous Latin American world….

  5. Not sure how much buying power is in the group but it’d be cool if you guys want to get paid on this CVR to engage with PAAS and help them figure out how to do right by the community here, may speed up mine opening…Guatemala and it’s people need thoughtful people to support their rights to self-determination, give them real ownership and participation in the decision making of their land.

  6. One concern I have is that Panamerican reported $176M in net earnings (85 cents per share) and increased book value after dividends (22 cents per share) by $138M, but book value per share only increased 16 cents by my calculation which should be higher even accounting for 5% share dilution I think. Not claiming fraud, very likely my weak math skills but seems wrong.

    But I don’t see the need for hedging PAAS itself. My calculations are that a re-opened Escobal at current $25 silver would be around $1.50 in net earnings, and even if silver were to drop back to $20 profits would be significantly higher and I estimate it would have to average $17 to produce lower earnings than 2020. I’m thinking of shorting silver, not PAAS to hedge this trade.

  7. Does anyone know if the 6/20 meeting was held and what the outcome was? I can’t seem to find anything about it on PAAS website.

    • I think PAASF is different from PARF and HRST – it is still actively trading.

  8. We are closing PAASF/PAAS idea with 50% return in 8 months.

    We still think there is high likelihood that CVR will pay out, however, the spread has narrowed by half in a relatively short time period – it might take another couple (or more) years before the commercial shipments from the mine start and CVR pays out. There might be opportunities to re-enter the trade down the road.

    As for the latest updates, it seems that that the process got stuck in the pre-consultation phase due to a surge in COVID-related cases. Two pre-consultation meetings have already taken place, while the third is facing delays due to COVID and has not been scheduled yet, but I expect it will resume shortly as another Guatemala mine Fenix has also started a pre-consultation phase a few days ago. After that, consultation phase should take up to four months.

  9. We are reopening this case with PAAS share price at $25.96 and PAASF at $0.80/share. Current spread is at 61%.

    Pan American Silver CVRs (PAASF) might be interesting again. Reminder: PAASF will convert into 0,0497 shares of PAAS upon restart of Escobal silver mine in Guatemala.

    Previously, we closed the idea in Sep’21 when the spread narrowed to 59% and the pre-consultation process got stuck again (due to COVID) after only 2 meetings. Since then, the process seems to be back on track – so far 3 more Escobal pre-consultation meetings have taken place, one of the previously suspended Guatemalan mines was put online. It seems that the Escobal mine should enter the consultation stage soon – this would be a major breakthrough for PAAS and will finally signal that the process is not in the “early” stages anymore. CVR spread is likely to tighten with further positive developments. Recent widening of the spread to 60%-70% provides a good re-entry opportunity. Plenty of cheap PAAS borrow is available on IB for hedging.

    Another Guatemala mine Fenix (nickel), which previously was also suspended, has successfully finished the consultation stage – also based on ILO convention rule 169, same as the Escobal – and re-started the mine in Jan’22. Clearly, this shows that despite multiple delays due to COVID, Guatemala’s government is serious about bringing back its mines online. With Escobal being one of the largest projects in the country, the prospects for its re-start have improved.

    It seems that in Oct’21 the parties were already contemplating a deadline for the pre-consultations and getting ready for the next stage – all of which was delayed due to COVID. The following is translated from Spanish (more info can be found on Guatemala’s government’s webpage on Escobal restart process here ):

    They hold a third pre-consultation meeting for the Escobal mining project On October 12 of this year, the third pre-consultation meeting with the Xinka People was held on the Escobal mining right, located in San Rafael Las Flores, Santa Rosa.


    Among the agreements reached are:
    – The methodological proposal presented by the Parliament of the Xinka People of Guatemala was accepted by the participants, with the addition of defining the deadline for the completion of the preliminary stage consultation.
    – The MEM and the Parliament of the Xinka People of Guatemala will hold another day of work on November 10 of this year to define the term of completion of the pre-consultation stage and the construction of the methodology will continue to exhaust the process.
    – The fourth pre-consultation meeting was agreed for November 27 and will be to discuss the progress of the issues in the work tables, in addition to others that may arise.
    – The MEM will start with the necessary procedures for the hiring of the professionals that the Parliament of the Xinka People of Guatemala proposed as advisors for the consultation process.

    In the most recent update (Feb 24) says that two more meetings were held in 2022 (5 pre-consultation meetings so far) with multiple intermediary meetings between them. But it’s clear that the process is advancing.

    Timeline is still uncertain. The consultation phase should take several months (previously estimated at 4) plus a few weeks for the court approval. The above-mentioned Fenix mine somehow managed to fast-track the process. Pre-consultation for Fenix was planned for July’21 but was started only in September (COVID delays) and by mid-December it had already completed both the pre-consultation and consultation stages (3 pre-consultation meetings and 7 consultation meetings). Court approval took a few weeks and the mine suspension was lifted in early Jan’22.
    Worth noting that all of that was done amidst various riots from the protesters, to which the Guatemalan government responded by sending military with tear gas.

    The recent widening of the spread (spiked on the 7th March) might be correlated with media reports one day before about new accusations on the Fenix mine – apparently, an investigation by an international consortium of journalists reported that Fenix’s parent company (Swiss miner Solway Investment Group) hid pollution in an indigenous area near its nickel processing plant and also was involved in intimidation/influence peddling during the consultation process for Fenix restart. However, the Supreme Court has already reinstated Fenix’s license, so I don’t think that this new report will have any major impact, let alone cause suspension of Fenix mine again.

    Sources: ;

    The one risk that’s worth noting is the unstable political situation in Guatemala (but that hasn’t changed since the write-up last year). Most importantly, Guatemala’s presidential elections will take place in June’23 and if Escobal is not back online by that time, there’s a risk that a new government will not be that mining friendly. I don’t think the risk is high as by that time Escobal’s consultation phase will have advanced significantly and given the project size and mining sector importance for the country’s GDP it is hard to imagine that the process will get stalled again.

  10. I’m not allowed to buy this stock through IB, only closing position allowed

    • Buying this stock (PAAS) through IBKR on the NASDAQ and TSE is working for me at 3/29/2022 @ 10:30am ET (for context, i’m in the U.S.).

    • Agreed. IB is not allowing me to buy PAASF. PAAS is easy. But the CVR is not available for me to purchase. Is this unique to IB? If not, then this trade might not be possible.

      Has anyone been able to buy PAASF?

    • I bought some for the original idea and still hold. Haven’t tried trading them recently.

  11. Apparently, the article from April (see April 29th comment above) was misleading and Escobal is still at a pre-consultation phase. The good thing is that the process has definitely picked up and accelerated. 6th pre-consultation meeting took place on the 9th of May and one more is planned for the 5th of June. So far, it’s not clear how many more meetings there will be, but PAAS CEO says he’s encouraged by the current schedule.

    55% spread remains.

    Conf. call –

  12. Mine restart consultation process has had slight delays but 7 out of 8 pre-consultation meetings have already been held. Final meeting is planned for July 20. Then, the formal consultation stage will begin and should conclude in February 2023. Guatemalan energy and mines minister appears confident that “these processes are going to be successful”. PAAS/PAASF spread stands at 45%.

    “Following slow progress due to 2019 presidential elections and COVID-19 restrictions, the ministry has now held seven of eight meetings planned for the preliminary phase of the consultation process, with key advances including the completion and approval of a cultural and spiritual impact study, deputy minister for sustainable development Óscar Pérez Ramírez told a press conference.”

  13. The pre-consultation phase ended on the 20th of July and the process has finally entered the consultation phase. The first meeting was set for the 21st of August. PAAS said they will provide more details with the next quarterly report (Q3). The spread has narrowed down to 27%.

  14. Closing out PAASF/PASS arbitrage idea. The remaining spread now stands at 24%. Keeping in mind the extended timeline likely remaining till the full opening of the Escobal mine as well as the risk of any further hurdles on a way, the remaining spread seems to be quite fair.

    In total 44% gain on this arbitrage in 4 months.

    This comes o top of our first arbitrage attempt at this CVR back in Feb’21, that resulted in 50% return within 8 months.

  15. I decided to pay someone to translate the last meeting notes. Here they are.

    Act No. VDS-1-2023. In the municipality of Cuilapa, in the department of Santa Rosa, at nine o’clock and twenty minutes, on Thursday (19) January, two thousand twenty-three (2023), constituted at the headquarters of the Xinka Parliament of Guatemala, located at Kilometer fifty-seven point five (57.5) Highway to El Salvador, San Juan de Arana, municipality of Cuilapa, department of Santa Rosa, Guatemala; I, OSCAR RAFAEL PÉREZ RAMÍREZ, act in my capacity as Deputy Minister of Sustainable Development of the Ministry of Energy and Mines, which I accredit with Government Agreement Number Six dated January 16, two thousand and twenty, by the General Secretariat of the Presidency of the Republic, with the number of box six, folio one hundred and sixty-three, of book twelve, with entry date January sixteen of the two thousand twenty and Certification dated January twenty-seven of two thousand twenty of the Act of Taking Office Number TP dash zero eight dash two thousand twenty (TP- 08-2020) of the Book of Minutes of the Human Resources Unit of the Ministry of Energy and Mines, dated January 16 of two thousand and twenty; and in my capacity as coordinator and moderator, with the purpose of recording in ADMINISTRATIVE ACTS THE JOINT WORKING MEETING BETWEEN THE PARLIAMENT OF THE XINKA PEOPLE OF GUATEMALA (PAPXIGUA]) and THE MINISTRY OF ENERGY AND MINES (MEM), to begin this meeting, at this moment, the individuals who were appointed are expected to attend, according to their appointments and corresponding representations from the following institutions: a. As Representatives of the PARLIAMENT OF THE XINKA PEOPLE OF GUATEMALA (PAPXIGUA] what they accredit with the certification of Point Sixth of Act 5-2020 gel Book of Minutes of the Parliament of the Xinka People of Guatemala, dated September 6, 2020, who were named in a letter dated September 14, 2020, signed by their President, and in which it is stated that they represent the communities of the Xinka people of Guatemala, in the consultation process on the “Escobal” Mining Project, the following individuals: 1) Aleisar Arana Morales, who identifies himself with the Personal Identification Document -DPI- with the Unique Identification Code -CUI- 1783 62018 2217 issued by the National Registry of Persons of the Republic of Guatemala; 2) José Amilvar Urías Sánchez, who identifies himself with the Personal Identification Document -DPI- with Unique Identification Code -CUI- 2493 00303 0614 issued by the National Registry of Persons of the Republic of Guatemala; 3) Miguel Ángel Rodríguez Cordero, who identifies himself with the Personal Identification Document -DPI- with Unique Identification Code -CUI- 1900 62215 2107 issued by the National Registry of Persons of the Republic of Guatemala; 4) Tito de Jesús Ramírez Hernández, who identifies himself with the Personal Identification Document -DPI- with the Unique Identification Code -CUI- 2969 05879 2107 issued by the National Registry of Persons of the Republic of Guatemala; 5) Juan Antonio Rodríguez Cano, who identifies himself with the Personal Identification Document -DPI- with the Unique Identification Code -CUI-1923 44803 0604 issued by the National Registry of Persons of the Republic of Guatemala; 6) Celso Cazún Aquino, who identifies himself with the Personal Identification Document -DPI- with the Unique Identification Code -CUI- 2656 27826 0604 issued by the National Registry of Persons of the Republic of Guatemala; 7) Herlindo Alvizures Matías, who identifies himself with the Personal Identification Document -DPI- with Unique Identification Code -CUI- 1830 18230 0604 issued by the National Registry of Persons of the Republic of Guatemala; 8) Henry Dagoberto Joge Monterroso, who identifies himself with the Personal Identification Document -DPI – with the Unique Identification Code -CUI- 1813 56821 0603 issued by the National Registry of Persons of the Republic of Guatemala; 9) Marta Julia Muños Montenegro, who identifies herself with the Personal Identification Document -DPI- with the Unique Identification Code -CUI- 1735 29542 2107 issued by the National Registry of Persons of the Republic of Guatemala; 10) Víctor Manuel Pérez Oliva, who identifies himself with the Personal Identification Document -DPI- with the Unique Identification Code -CUI- 3975 45010 Z101 issued by the National Registry of Persons of the Republic of Guatemala; b. On behalf of the MINISTRY OF ENERGY AND MINES, Engineer Oscar Rafael Pérez Ramírez, in his capacity as Titular Representative. In addition, Engineer Oscar Pérez also appears in his capacity as coordinator and moderator of the process, as it was already established at the beginning, which he accredits with his appointment through Ministerial Agreement number 103-2021 dated May 7, issued by Mr. Alberto Pimentel Mata, Minister of Energy and Mines. Also present are Mr. Quelvin Otoniel Jiménez Villalta, lawyer of the Parliament of the Xinka People of Guatemala, and as companions of the Parliament of the Xinka People of Guatemala: Rafael López; Nohemy Marroquín; Lazaro González, Juan Antonio Santiago, Rigoberto Román, Alex Fernando López and Tadeo Pineda, Secretary of Papxigua, and the team of the Ministry of Energy and Mines formed by: Enrique Roberto Cifuentes Domínguez, Wilson Wilfredo Monzon Zetino, Lissette Eunice Orozco Dávila, Blanca Alejandra Perussina Morales and Gabriela Isabel Guido Quintana; so when everyone is present, and there is a quorum, it begins as follows: FIRST. The speakers are meeting to celebrate the “JOINT WORKING MEETING BETWEEN THE PARLIAMENT OF THE XINKA PEOPLE OF GUATEMALA (PAPXIGUA) AND THE MINISTRY OF ENERGY AND MINES (MEM),”: For this purpose, those present are welcomed by Mr. Aleisar Arana Morales, who also asks to reflect on what was done during the year two thousand and twenty-two and to see what was good and bad that was done, to continue moving forward in the process; then the Deputy Minister, Oscar Rafael Pérez Ramírez, welcomed those present. Then, Enrique Cifuentes announces the OBJECTIVE of the meeting and presents the AGENDA to be developed. Some meeting points have been exhausted, and the following forms are continued. SECOND: 4. Report on the new hiring of Guatemalan advisors proposed by the Parliament of the Xinka People of Guatemala (PAPXIGUA) and the activities that Mr. Enrique Cifuentes has carried out: Enrique Cifuentes comments on the work that has been done with national advisors who look at the issues of health and culture, and the process of hiring them. Mr. Quelvin Jiménez takes the floor and indicates his concern about the slow pace in which the information has been delivered, which in the end, instead of clarifying doubts, has left them more doubts regarding the topics discussed; In some cases it is not really known who has the information, it has not been defined when to make the visit and the inventory of materials has not been delivered; there is a problem on the subject of culture, since they send a politician instead of an archaeologist, and that delays the analysis of the information, another problem is that the agreement between the Ministry of Culture and Sports and Tahoe Resources does not appear, it indicates that today a request will be made to the Ministry of Culture and Sports with a copy to the Ministry of Energy and Mines; Mr. Deputy Minister takes the floor and indicates that it is established at this time that if the requests do not advance at the technical level, it will be coordinated with the other Deputy Ministers; it indicates that we are making progress, but not at the speed that should be done. Mr. Quelvin Jiménez takes the floor and indicates that his advisors request the information. However, the institutions do not give them the answers quickly, so he proposes to define the most appropriate communication channel to speed up the answers. The Deputy Minister takes the floor and states that it is better to return to the system in which the MEM is responsible for sending the request and making the responses feasible by the other institutions and being the direct link with Parliament; 5. Report on the recruitment of international advisers and the support of international cooperation and the progress of recruitment, by Mr. Enrique Cifuentes and Mr. Quelvin Jiménez: Enrique Cifuentes states that UNDP and TROCAIRE maintain support. Mr. Aleisar Arana Morales takes the floor and asks: What will happen to the advisors because the information has been provided very slowly? The Deputy Minister indicates that the delivery process will be streamlined; Mr. Quelvin Jiménez takes the floor and states that what worries them is that the first socialization of information will take place in February, and specific information in the Environmental Impact Study has not been located. He asks what would happen if the delivery of information was delayed? And states that the health issue is the one in which the most progress has been made. The Deputy Minister takes the floor and indicates that progress has been made in the Ministry of Health because a meeting was held with them, so he proposes to do the same with the Ministry of Culture. He also offers to designate the dates for moving forward. Mr. Quelvin Jiménez takes the floor, and he indicates that the hiring of advisors should be considered if the delivery of information is delayed; the Deputy Minister indicates that, if necessary, they will be hired, but that the delivery of information must be expedited so that representatives of the Ministry of Culture will be spoken. Enrique Cifuentes indicates that as far as the contracts are concerned, they are in paperwork; he demonstrates that the support is still available from UNDP and gives the floor to Mr. Quelvin Jiménez to explain what has been done, who states that they are going to send a request to OXFAM for the restructuring to be carried out. He indicates that they agreed with the advisors and will restructure what they have in OXFAM and UNDP so that this could be done in fees. It would be necessary for the MEM to cover the tickets and propose two or three monitoring, to be carried out, to be carried out, one in the dry season and two in the rainy season, in addition to carrying out other separate monitoring. He requests that it be recorded that, although it is true at this time, the Parliament found a way to pay the advisers; later, it would not be taken as a rule that indigenous peoples must hire their advisers since the responsibility lies with the Government. The Deputy Minister takes the floor and states that tickets are not feasible but will be sought if there is a way. As for the subject of advisors, he said that it could be analyzed in depth. Mr. Quelvin Jiménez took the floor and stated that today they will work on the response to the invitation made to them by the Ministry of Labor to meet. He returns to the topic of advisors and indicates that there is still support available from TROCAIRE but no longer from SAGE; he also demonstrates that the structural expert requests that the MEM hire him and a legal advisor, and they will send the proposal. The Deputy Minister takes the floor and requests that the contracting process can be started to speed up the process. Mr. Quelvin Jiménez took the floor, indicating that he demands that the agreement reached at this meeting be recorded that, to make the process viable by Parliament, the issue of fees by the advisers should be restructured. The Deputy Minister states that he has contacted the representatives of the Ministry of Culture at this time and indicates that the pending visit can take place on Friday, January 27. Hence, he awaits a response from Parliament. Mr. Quelvin Jiménez states that on January 30, they would have the proposal of the advisors. The Deputy Minister takes the floor and requests that the next meeting be held between the twenty-first and twenty-third of February to conclude the issues of culture and health and present it to the table, so he awaits the answer. 6. Discussion on the topic of Dispute Resolution Mechanisms. MEMAPXIGUA: Enrique Cifuentes mentions the proposal given by Parliament at that moment concerning the mechanism for resolving disagreements, explains the actions taken by the MEM when going to the archbishopric and requesting a meeting with the bishops who had agreed to participate, to explain to them how the process has been carried out. He indicates that the appointed bishop is Jutiapa Monsignor Calderón, but there has been no other answer. The Deputy Minister takes the floor and explains what is needed to carry out the request, indicating that a joint note must be made between the MEM and the Xinka Parliament, in which Monsignor Cayetano is told that the Catholic Church must be able to participate as a mechanism for resolving disagreements; therefore, he requests that they take the decision. Lic. Quelvin Jiménez takes the floor and manifests that Monsignor Sagastume told him that he had not received any communication in this regard and that he is in charge of the Pastoral Care of the Earth; he points out that the Parliament has already met with Monsignor Moscoso and indicates that they are willing to participate; he proposes to request a space in the episcopal conference to be able to present the process, in addition to being able to send them how they would participate in it. The Deputy Minister takes the floor and proposes to start working on the notes to send them and request the space, so it is agreed to carry out the actions indicated. 7. Space for the authorities of the Xinka People’s Parliament to make decisions: After the authorities of the Parliament met and agreed on their decisions, they return to the meeting, and Mr. Aleisar Arana Morales takes the floor, explaining the agreements that were reached: a. concerning the next meeting, it is agreed that it will be held on March 1. And with no other issues to address, he gives the closing remarks of the meeting, wishing everyone a good year. Afterward, the Deputy Minister thanks and says goodbye to those present. The joint letter for Bishop Cayetano Parra Nova was created and signed once and again by Don Aleisar Arana Morales and the Deputy Minister, which will be delivered later this week. 8. Reading and signing of the administrative act. Then, Mr. Enrique Cifuentes reads out the administrative report. THIRD: 9. Closing: After having exhausted the agenda items and with no more items to be addressed, these ACTS are terminated. The attendance lists are attached to it, which form an integral part; currently, it is eleven hours and forty-five minutes, in the same place and date as its beginning. All parties agreed that only the President and Representative of the Xinka People, Mr. Aleisar Arana Morales, and the undersigned Vice Minister Oscar Rafael Pérez Ramírez would sign.

  16. From the Annual information form released yesterday, page 58:

    In 2023, we do not anticipate any production from the Escobal mine as the operations remain suspended. We plan to continue with our property and infrastructure maintenance requirements and have no plans to undertake any exploration work in 2023. All expenditures will be expensed as incurred.


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