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Shafter Mine: Presidio County's Largest Taxpayer Lays Off Half Its Workforce

The mine at Shafter, Texas in Presidio County has been shut down until next year at least. 50 per cent of the mine's workforce has been laid off. A worker who remains is smelting the last silver mined before the layoff.

After two years of hopes for an economic injection on a poverty-plagued part of the border, the silver mine at Shafter is shutting down until next year. Eighty-five people are out of a job, at least temporarily, although they will continue to be payed a portion of their salaries.

This is the latest setback for the mine. Federal investigators from the Mine and Safety Administration are checking part of the underground property after a release of smoke in one of the mines tunnels. There was not a fire that took place however as some people have suggested. At the same time, the company is ruffling feathers by taking one of the nation's poorest counties to court to cut its tax bill.

The company had already lost two appeals of its tax assessment at the county level. Under Texas law, the company had no option but to take Presidio County to court to contest its tax bill, the county's largest at more than two million dollars per year.

The company, Aurcana, based in Vancouver, Canada is in the same position as other silver producers. The silver market has declined since a groundbreaking ceremony was held in February, 2011. In April and May of that year, silver almost hit 50 dollars an ounce. But analysts say prospects in the short term are not buoyant. Analysts contacted for this story estimate the per ounce price for silver in 2014 should range between between 17 and 22 dollars. Two months after the groundbreaking ceremony, the per ounce price was just below 50 dollars.

The company is now actively reorganizing the mine which until a week or so ago employed 170 people between its own workforce and subcontractors.

A new Chief Operating Officer with extensive international mining and financial experience is on board. His name is Andrew Kaczmarek and his resume is impressive.

He has four decades of experience in operations and management with companies including Alacer Gold, Kinross Gold, Phelps Dodge, Cyprus Amax, Gold Fields and Hudson Bay Mining and Smelting Co.

Before joining Aurcana and the Shafter Mine project, he was the Chief Operating Officer of Victoria Gold Corporation.

Kazcmarek understands the task ahead; While working for Gold Fields he was the Chief Engineer at the Gold Fields Shafter Project now owned by Aurcana.

In contrast to some executives across the corporate landscape, Kaczmarek is forthcoming and welcoming. He says he's confident the mine can and will reorganize and clearly some investors and financiers agree. Despite setbacks, Aurcana raised 50 million dollars this summer. It also operates a profitable mine in Querétaro, Mexico.