Days after Medoro Resources (MRS-V) signs a US$200 million deal to acquire the Frontino gold mine in Segovia, Colombia, a union claiming ownership of the mine says it will not recognize the agreement.
Medoro signed the deal with the legally appointed liquidator of the mine, Luis Fernando Alvarado.
The Mining and Energy Industry Workers Union has previously said that the workers, the retirees and the people of the region are the rightful owners of the mine based on a deed signed in 2003 and a Supreme Court ruling in 1969.
“We know exactly the worth of Frontino Gold Mines and will not allow Medoro and persons to take our assets at a price that is a tiny fraction of its true value,” said Dairo Alberto Rua, president, Sintramienergetica of Segovia in a statement.
The mine is in a dire financial situation though, with a lot of money owed to its pensioners. The deal guarantees jobs for 1,600 locals for one year.
The union also says it’s filed a criminal complaint against Serefino Iacono, the former co-chairman of Medoro, with the prosecutor general of Colombia for alleged false and malicious staemetns made against the workers and owners of the assets of Frontino.
The mining concession covers 28.7 sq. km of land about 220 km north of Medellin. The mine has been in production for more than 150 years and has produced 4.5 million oz. gold. Last year it produced about 44,000 oz. gold from 450 tonnes per day grading 8 grams gold per tonne.
Two of three of the underground mines that make up Frontino were shut down in 2004 when the liquidator was brought in, and exploration work hasn’t been done since then either.
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