Almaden case headed to Mexico’s Supreme Court

An appeal of an April 2019 lower court ruling that jeopardized Almaden Minerals‘ (TSX: AMM; NYSE-AM: AAU) Ixtaca gold-silver project in Puebla state – and the validity of Mexico’s mining law – will be heard in Mexico’s Supreme Court.

The appeal was originally brought to the Collegiate (Appeals) Court of Mexico by the Mexican government, and Almaden as an affected third party. However, the court has issued a decision that it does not have the authority to hear the case, and has referred the matter to the Supreme Court.

The appeal centres on a 2019 Puebla state court ruling that Mexico’s mineral title system is unconstitutional because consultation with Indigenous communities is not required before titles are granted. The court also ruled that Almaden’s mineral claims should be suspended while consultation was completed. The lawsuit was brought to the court by a Tecoltemi community of 150 people that is outside of Almaden’s claims area, with none of the 12 communities within the company’s mining claims taking part in the suit.

Almaden Minerals’ community meeting in December 2018, with participation by representatives of the Mexican Federal Government. This was Almaden’s ninth large community meeting at Ixtaca in Puebla State since 2012, with total aggregate participation of over 4,100 people. Credit: Almaden Minerals.

With the appeal now headed to the Supreme Court, Almaden says it expects a decision within the next four to eight months.

The company also says it is encouraged by the development, citing a January 2021 unanimous decision from the court involving an unrelated mining company that upheld Mexico’s mining law as constitutional.

Separately, Mexico’s federal permitting authority Semarnat informed Almaden last last year that its initial environmental impact assessment for Ixtaca would not be approved.

The company says it has reviewed the agency’s reasons for not granting an approval and intends to submit a revised impact assessment incorporating additional data already in hand, and data from further field studies.

In March, Almaden resumed exploration at Ixtaca, focused on high potential targets outside of defined reserves – namely the Southeast Alteration zone 1 km southeast of the Ixtaca deposit.

Almaden released a positive feasibility study for Ixtaca in late 2018 that outlined a US$174 million development that would produce an average of 6.1 million oz. silver and 90,800 oz. of gold annually over a mine life of 11 years. Using a discount rate of 5%, the project carries an after-tax net present value of US$310 million and an internal rate of return of 42%.