TORONTO, Dec. 5, 2019 /CNW/
- Excellon Resources Inc. (TSX:EXN, EXN.WT, OTC:EXLLF
and FRA:E4X1) ("Excellon" or the
"Company") is providing an update to shareholders on the
previously disclosed ongoing legal action in Mexico in respect of the La Antigua mineral
concession ("La Antigua") that is part of the Evolución Property in
Zacatecas. La Antigua was included in Excellon's acquisition
of Silver Eagle Mines Inc. ("Silver Eagle") in 2009, which includes
a portion of the historic mineral resource at Miguel Auza. The concession is subject to an
exploration and exploitation agreement with purchase option (the
"Agreement") dated December 3, 2006
between San Pedro Resources SA de CV ("San Pedro", now a subsidiary
of Excellon) and the owner (the "Plaintiff") that provides, among
other things, for a minimum payment of US$2,500 plus value added tax per month (the
"Advance Royalty") and the payment of a 3% net smelter return
("NSR") royalty. San Pedro has the
right to purchase absolute title to La Antigua including the NSR
royalty upon payment of US$500,000.
San Pedro has accrued the Advanced
Royalty on an ongoing basis and the Agreement remains in force.
Though the Miguel Auza Mine never reached commercial production
and was put on care-and-maintenance in December 2008 prior to Excellon's acquisition of
Silver Eagle, the Plaintiff sued San
Pedro for non-compliance with the Agreement and specifically
for not operating the Miguel Auza Mine. As disclosed in Excellon's
management discussion and analysis, the Plaintiff was awarded
damages of approximately $0.7 million
in the court of first instance in Torreón, Coahuila. Both San
Pedro and the Plaintiff appealed the decision to the Second
District State Court in the Judicial District of Torreón. That
Court confirmed the initial decision but, subsequently, pursuant to
an order obtained by the Plaintiff, granted the Plaintiff an award
of approximately US$23 million, predominantly in damages for
the Miguel Auza Mine not being in operation. San Pedro is appealing this decision to the
federal courts of Mexico and
believes that the decision is without merit and not supported by
the evidence, facts or
law.
"We will vigorously appeal this erroneous decision," stated
Brendan Cahill, President and CEO.
"The Miguel Auza Mine never reached commercial production or
generated revenues before it was put on care-and-maintenance by
Silver Eagle in 2008. The Agreement with the Plaintiff clearly
provides for an advance royalty payment in the event that the mine
is not producing and, in fact, the currently disputed award is
multiple times greater than any income the NSR royalty could
possibly produce. We expect this decision to be reversed and
rationalized in the federal court system. In the interim, we do not
expect any impact on Excellon's ongoing business activities."
About Excellon
Excellon's 100%-owned Platosa Mine has been Mexico's highest-grade silver mine since
production commenced in 2005. The Company is focused on optimizing
Platosa's cost and production profile, discovering further
high-grade silver and carbonate replacement deposit mineralization
on the 21,000-hectare Platosa Project and epithermal silver
mineralization on the 100%-owned 45,000-hectare Evolución Property,
and capitalizing on current market conditions by acquiring
undervalued projects. The Company also holds an option on the 164
km2 Silver City Project in Saxony, Germany, a high-grade epithermal silver
district with 750 years of mining history and no modern
exploration.
Additional details on Excellon's properties are available at
www.excellonresources.com.
Forward-Looking Statements
The Toronto Stock Exchange has not reviewed and does not
accept responsibility for the adequacy or accuracy of the content
of this Press Release, which has been prepared by management. This
press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 27E of the
Exchange Act. Such statements include, without limitation,
statements regarding the future results of operations, performance
and achievements of the Company, including potential property
acquisitions, the timing, content, cost and results of proposed
work programs, the discovery and delineation of mineral
deposits/resources/reserves, geological interpretations, proposed
production rates, potential mineral recovery processes and rates,
business and financing plans, business trends and future operating
revenues. Although the Company believes that such statements are
reasonable, it can give no assurance that such expectations will
prove to be correct. Forward-looking statements are typically
identified by words such as: believe, expect, anticipate, intend,
estimate, postulate and similar expressions, or are those, which,
by their nature, refer to future events. The Company cautions
investors that any forward-looking statements by the Company are
not guarantees of future results or performance, and that actual
results may differ materially from those in forward looking
statements as a result of various factors, including, but not
limited to, variations in the nature, quality and quantity of any
mineral deposits that may be located, significant downward
variations in the market price of any minerals produced, the
Company's inability to obtain any necessary permits, consents or
authorizations required for its activities, to produce minerals
from its properties successfully or profitably, to continue its
projected growth, to raise the necessary capital or to be fully
able to implement its business strategies. All of the Company's
public disclosure filings may be accessed via www.sedar.com and
readers are urged to review these materials, including the
technical reports filed with respect to the Company's mineral
properties, and particularly the September
7, 2018 NI 43-101 technical report prepared by SRK
Consulting (Canada) Inc. with
respect to the Platosa Property. This press release is not and is
not to be construed in any way as, an offer to buy or sell
securities in the United States.
SOURCE Excellon Resources Inc.