(Adds company demands, union's statement, analyst comment)
Feb 15 Some 1,000 unionized employees at Primero
Mining Corp have gone on strike at the Canadian gold
miner's San Dimas mine in Mexico, halting mining and milling
operations, the company and union said on Wednesday.
Depending on its duration, the strike could have a negative
impact on the company's 2017 production, Primero said. As a
result, it has decided to postpone releasing its 2017 production
and cost forecasts.
The National Union of Mine, Metal, Steel and Allied Workers
of the Mexican Republic said about 1,000 workers began the
strike at midnight. The union said it had been negotiating a
labor agreement when the company "reversed the important
advances already achieved and proposed starting again from
Primero said the workers struck after the union and company
were unable to reach an agreement during collective bargaining
Primero said it had started cutting jobs, including
contractors, at the San Dimas mine in an attempt to increase
productivity and make the operation profitable again.
The company wants to "better align" the mine's short-term
bonus structure with its performance and shift workers onto a
more continuous shift cycle to improve productivity, it said.
"We expect a negative reaction from Primero's shares to the
company's announcement," RBC Capital Markets analyst Dan Rollins
said in a note to clients. The strike was announced after the
The San Dimas mine produced 151,355 ounces of gold and 8.3
million ounces of silver in 2015, according to the company.
Last year, Primero said it expected to increase production
capacity to 215,000 ounces of gold a year.
(Reporting by Nicole Mordant in Vancouver and Natalie Schachar
in Mexico City; Editing by Lisa Shumaker and Grant McCool)