Metallica Resources (MR-T) says that Mexico’s Federal Court of Appeals has overturned a previous nullification of the company’s mining permit for the Cerro San Pedro gold-silver project in San Luis Potosi state.
The company said that while it has not yet received official notification of the ruling, it was posted on the courthouse bulletin board, which Metallica says is the standard method of announcing verdicts prior to publishing complete rulings.
Metallica says it expects to receive official notification from the Court within the next two weeks, at which time it will issue a more detailed discussion of the any conditions, stipulations or provisions included in the ruling.
The latest ruling overturns an August 2004 ruling in which a Mexican fiscal court nullified the project’s mining permit issued by the Federal environmental agency.
In June, the Federal Mining Bureau issued Metallica a temporary occupancy agreement that the company says secures land tenure in terms of accessing its mineral rights for the life of the mine.
The company continues to with various state and federal agencies to secure the blasting permit for 2005; the permit is required before construction can begin. The company originally launched a nine-month, US$28.2-million construction campaign in February 2004; construction was suspended in June 2004 owing to various permitting and legal issues.
“We are still waiting to review the Court’s ruling, but based on the information that has been publicly posted this is an important step forward for our operation at Cerro San Pedro,” said Metallica CEO Richard Hall in a prepared statement.
“We have worked closely with the Mexican authorities at all levels to ensure that this project meets the highest international standards of environmental and cultural protection while at the same time providing substantial economic and social benefits to the local communities.”
Earlier this year, Metallica updated the project’s proven and probable reserves to 63 million tonnes grading 0.58 grams gold and 23.9 grams silver per tonne, for 1.17 million contained ounces of gold and 48.4 million ounces of silver. The reserves are included in a measured and indicated resource totalling 116.2 million tonnes running 0.54 gram gold and 20.3 grams silver. The new estimates are based on a more current gold price of US$375 per oz. and US$5.77 per oz. of silver.
The heap-leach mine is expected to produce an average of 90,500 oz. gold and 2.1 million oz. silver per year over its estimated life of 8.3 years. Cash operating costs, net of silver credits, are pegged at US$177 per oz.
Shares in Metallica were 21, or 16%, higher at $1.53 in late-morning trading in Toronto following the news on Aug. 18.
Be the first to comment on "Metallica jumps on permit ruling"