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Pacific Rim stops Salvador drilling, stock down
By Cameron French
TORONTO (Reuters) - Pacific Rim Mining has cut its work force and suspended drilling in El Salvador due to frustration over a lengthy permitting process for its El Dorado gold mine, the Canadian company said on Thursday, sending its stock down by 32 percent.
However, the company will not abandon the assets and has ruled out selling them, Chief Executive Thomas Shrake said in an interview.
El Dorado "is a very attractive mine, high margin, environmentally solid, and the other projects that we have just have extremely high odds of success," he said.
In addition to El Dorado, Pacific Rim owns the Santa Rita and Zamora gold projects in the country. It also owns a 49 percent interest in the Denton-Rawhide gold mine in Nevada, as well as the Carrera and Colina gold projects in Chile.
Pacific Rim's shares were down 25 Canadian cents at 54 Canadian cents just after midday on the Toronto Stock Exchange.
El Dorado, which has measured and indicated resources of 1.1 million ounces, would represent the first new precious metals mine in the country in 70 years, Pacific Rim said.
The company started the permitting process in 2004 but became bogged down in 2006. Shrake attributed the delays in part to the government's concerns about potential public opposition because of the environmental impact of mining.
"I think the real issue here is politics," said Shrake.
"They have no technical issues. The mine we've designed would probably be the single most advanced environmental designed mine of its kind anywhere in the Americas."
With little movement, the company decided to halt drilling and slow its exploration activities until it gets some indication of movement on the part of the government, he said.
The company has laid off 42 employees in El Salvador and could lay off more of its remaining 225 employees if the issue isn't resolved soon, it said.
($1=$1.02 Canadian)
(Reporting by =Cameron French; Editing by Frank McGurty)
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