First Majestic Readies to Sell Mexican Properties
Home > Mining > Article

First Majestic Readies to Sell Mexican Properties

Photo by:   wallpaperflare.com
Share it!
Alejandro Ehrenberg By Alejandro Ehrenberg | Journalist and Industry Analyst - Wed, 06/24/2020 - 09:13

First Majestic went into a selling spree in June. The Vancouver-based operator, which owns three producing mines in Mexico, has signed two separate letters of intent stipulating the option to acquire seven of its properties in Jalisco and Durango. In the background looms First Majestic’s tax dispute with the Mexican government.

The most recent letter of intent was signed on June 22 with Apollo Gold for the option of acquiring First Majestic’s Jalisco properties. As per information released by Apollo Gold, “First Majestic’s Jalisco Group of Properties covers six properties and 15 highly prospective claims, 13 of which First Majestic owns 100 percent and two in which it has a 45 percent interest. The claims cover 5,240ha in a district that has a history of gold and silver mining.” Simon Clarke, CEO of Apollo Gold stated: “We are very pleased to enter into this letter of intent and look forward to working with First Majestic to close the transaction and then launch exploration work on the Jalisco properties. These are highly prospective assets which have returned promising exploration results in the past.” The transaction is subject to TSX-V approval.

Seeking Alpha reports that the previous week Silver Dollar Resources signed “a letter of intent with First Majestic wherein Silver Dollar has the option to earn an initial 80 percent interest following the exercise of which it may earn an additional 20 percent in the latter's La Joya property (located in Durango).” Part of the deal is that Silver Dollar “incur US$1 million of exploration expenditures within the first five years and grant First Majestic a 2 percent net smelter returns royalty.”

In May, First Majestic initiated an arbitration process against Mexico under NAFTA's  Chapter 11. The dispute centers on how Mexico taxes the Canadian company. According to First Majestic, Mexican tax authorities “have repeatedly and unilaterally chosen to reject requests for dispute resolution procedures, known as mutual agreement procedures, contained within international treaties and designed for addressing differences in interpretation and application of those treaties.”

President López Obrador subsequently declared that “some of Canada’s mining firms were behind on their tax payments,” Reuters reported. “The president then urged Canada’s ambassador to prevail on the companies that there was no need to seek legal redress,” as their debts with the tax authority are beyond doubt, Reuters added. The same news outlet reported that “the miner wrote to Canadian ambassador to Mexico Graeme Clark and is hoping to set up a meeting with President Lopez Obrador” to reach a solution to the issue.

Photo by:   wallpaperflare.com

You May Like

Most popular

Newsletter