Complicated 1Q for First Majestic SilverBy Lorenzo Núñez | Thu, 04/15/2021 - 17:07
First Majestic Silver reports a slight decrease in their 1Q silver production due to ice storms and uncontrollable factors. In addition, the company’s current tax dispute continues to be filled with controversy after a controversial lawyer was hired to represent them in legal dispute.
First Majestic has had a shaky start to 2021. During the first quarter of 2021, the Canadian company produced 2.9 million silver ounces and 23,873 ounces of gold, representing a 16 percent and 9 percent decrease respectively, reported First Majestic in a press release. Keith Neumeyer said “While the quarter was impacted by some uncontrollable factors, site operations made some significant achievements during the quarter. At Santa Elena, underground ore production reached the highest quarterly rate in over a year following numerous operational improvements over the past nine months.“
The Santa Elena Silver/Gold Mine is First Majestic’s only project in Mexico that reported increases in quarterly silver and gold production. As stated in the press release, Santa Elena produced 453,528 ounces of silver and 6,327 ounces of gold representing an increase of 8 percent and 1 percent, respectively, compared to the prior quarter. However, their two other projects reported losses, with San Dimas producing 1,716,143 ounces of silver and 17,448 ounces of gold representing a decrease of 12 percent and 13 percent, respectively, and La Encantada Silver Mine processing 229,421 tonnes of ore and producing 738,354 ounces of silver, representing a 32 percent decrease in ounces compared to the prior quarter.
Adding to First Majestic’s rough 1Q, the company has been accused of tax evasion. The Canadian-based company has started legal proceedings against the Tax Administration Office (SAT). As reported by MBN, First Majestic’s legal advisors reviewed the court’s decision regarding the Advance Price Agreement (APA) annulment and came to the conclusion that the company had made a mistake in the APA request. The same advisors also concluded there were some irregularities in the procedures, as well as failures to address evidence from legal authorities. First Majestic has tried multiple times to engage in good faith negotiations with the Mexican government to resolve this dispute, but the administration has refused, according to a press release from the company. First Majestic believes that the government’s actions are contrary to the terms of Advance Price Management.
First Majestic has hired the Bulgarian lawyer called Stanimir A. Alexandrov who will be representing the company in its dispute with the federal government. Stanimir had already been accused of a conflict of interests when he intervened in a process between Spain and British fund Eiser, which ultimately caused the International Center for Settlement of Investment Disputes (CIADI) to cancel the award, reported La Jornada.