The Agrarian Court in Mexico’s San Luis Potosi state has again nullified Metallica Resources‘ (MR-T) surface rights lease on the Cerro San Pedro gold-silver project.
In early November, the country’s Federal Court ordered the Agrarian Court to reinstate Metallica’s rights lease pending a new resolution. That ruling concluded that the plaintiffs opposing the project did not have the legal right to contest the lease (T.N.M>, Nov. 19-25/04).
Metallica originally signed its lease with the Ejido of Cerro San Pedro (a group representing the historic occupants of the land) in 1997; a previous Agrarian Court ruling quashed the authority of the Ejido representatives who signed.
Metallica says the latest ruling does not limit its legal access to the property, as the company, and landowners who are party to the lease, have filed a constitutional protection petition against the latest ruling, and a legal complaint against the Agrarian Court judge.
The Federal Court plans to review the Agrarian Court ruling to ensure that it is not based on the same reasons for the original, overturned nullification, something that is prohibited under the Federal Court’s previous ruling.
Metallica says the legal reviews should take around four to six months. The company is also looking at several other options to secure its land tenure.
Reserves at Cerro San Pedro amount to 61.1 million tonnes grading 0.59 gram gold and 24 grams silver per tonne, based on a gold price of US$325 per oz. and a silver price of US$4.62 per oz.
The 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.
Metallica shares ended 37, or 22%, lower at $1.33 on the Toronto Stock Exchange following the news on Dec. 21.
Be the first to comment on "Metallica’s Mexican woes continue"