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Mexican revokes permit for Canadian gold mine

MEXICO CITY - Mexico revoked the environmental authorization Friday for a Canadian-owned open-pit gold mine that critics say threatens one of the most historic sites in the north-central state of San Luis Potosi.

MEXICO CITY - Mexico revoked the environmental authorization Friday for a Canadian-owned open-pit gold mine that critics say threatens one of the most historic sites in the north-central state of San Luis Potosi.

The Environment Department said in a statement that it has pulled the permit for Minera San Xavier, a property of Vancouver, Canada-based New Gold Inc., in accordance with a court ruling in October.

The ruling struck down the government's 2006 conditioned approval of the project's environmental impact statement, and ordered environmental authorities to reject the statement.

Opponents welcomed the decision. They say local watersheds were threatened by the cyanide used to leech gold out of huge mounds of crushed rock.

"This is a battle won, because the judges have given the final word," said Ana Maria Alvarado, who represents communal land owners around the Cerro de San Pedro, as the site is known.

The mine has been operating for more than two years, blasting apart mountainsides just a few dozen yards away from the church and main square of the 16th-century town of San Pedro.

New Gold has said it recovers or reuses almost all the cyanide used in the process, and says it has taken measures to protect or respect historic structures in the town center.

The impact of the revocation was unclear as the company said it will continue operating despite the court decision.

"This latest decision does not affect Cerro San Pedro's other permits, including its operating permit or its ability to conduct business," the company wrote it a Nov. 2 statement.

Opponents agree it will be tough to close the mine, especially given high gold prices.

"We're happy, but we can't declare victory yet, because they won't leave so easily," said Rafael Flores, a mine opponent. "It shouldn't be operating, but they have economic power."

The town - and the state - were founded on colonial-era tunnel mines. Shafts, entrances and old miners' housing still dot the hills.

But many of those structures are being blasted and bulldozed away, as strip-mining levels entire hillsides to get at the lower-grade ore that old miners ignored.

Alvarado said there are alternative proposals for preserving the old mine sites and bringing jobs to the arid, poor town, including eco-tourism.