Silver Bull Secures Funding for Legal Battle Against Mexico
Home > Mining > News Article

Silver Bull Secures Funding for Legal Battle Against Mexico

Photo by:   Tingey Injury Law Firm , Unsplash
Share it!
Fernando Mares By Fernando Mares | Journalist & Industry Analyst - Wed, 09/06/2023 - 17:42

The Canada-based exploration company Silver Bull Resources announced it secured litigation funding for an international arbitration proceeding against the Mexican government as it failed to reach a mutual agreement. The proceeding will be carried out within the framework of USMCA and NAFTA. 

According to Tim Barry, CEO, Silver Bull Resources, the legal dispute started in September 2019, when a small group of local miners started a blockade at Silver Bull’s Sierra Mojada project in Coahuila, asking for what the company considers an “undeserved” royalty. The company referred to the blockade as illegal and reported it continues to date. Barry noted that the federal government failed to end the blockade, preventing the company from carrying out its business. “The direct actions and inactions by the Mexican government have driven away investors from the project and resulted in the expropriation of Sierra Mojada,” Barry added. 

Silver Bull highlighted its intention to reach an amicable settlement with Mexico to avoid recurring legal instances. Nevertheless, the 90-period for such settlements under NAFTA expired on June 2, 2023, and no agreement was reached. On March 2, 2023, Silver Bull notified the Mexican government of its intention to start arbitration as the country failed to comply with NAFTA by illegally expropriating the project without compensation and without upholding NAFTA’s national treatment standard. 

Due to the negative response of Mexican authorities, the company said it seeks to recover over US$178 million in damages, which include sunk costs of over US$82.5 million. The company signed a litigation funding agreement with Bench Walk Advisors for over US$9.5 million, which will be available for immediate drawdown and will fund legal, tribunal and external expert costs and corporate operation expenses. The company highlighted that the funding will not be dilutive to its current shareholders and that Bench Walk will have contingent entitlement to damages if the company wins the case.

Barry mentioned that the substantial amount of the fund is proof of the strength of the company’s claims and added that similar situations in other countries have resulted in positive outcomes for the demanding companies. “Recent examples of this include a US$110 million award issued by the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) tribunal in August 2023 to Indiana Resources regarding the revocation of its mining license by the Tanzanian Government in 2018, which case was led by our legal counsel Tim Foden from BSF, and a US$5.8 billion award issued by the World Bank ICSID to Barrick Gold/Antofagasta regarding Pakistan’s unlawful denial of a mining permit for the Reko Diq copper project,” Barry added. 

Photo by:   Tingey Injury Law Firm , Unsplash

You May Like

Most popular