First Majestic Provides SAT Tax Dispute Update
September 25 2020 - 7:00AM
First Majestic Silver Corp. ("First Majestic" or the "Company")
announced an update related to the ongoing tax dispute with the
Mexican tax authority, the Servicio de Administracion Tributaria
(“SAT”) in connection with the 2012 Advance Pricing Agreement
(“APA”) granted to Primero Empresa Minera, S.A. de C.V. (“PEM”), a
subsidiary of the Company.
As previously announced on May 13, 2020, the
Company served the Government of Mexico with a Notice of Intent to
Submit a Claim (“Notice”) under the provisions of Chapter 11 of
North American Free Trade Agreement (“NAFTA”). The service of this
Notice initiated a 90-day process for the Government of Mexico to
enter into good faith and amicable negotiations with the Company to
resolve the dispute. On August 11, 2020, the 90-day process
deadline expired without any resolution of the tax dispute.
The Company has also been informed by its
Mexican legal advisors that PEM will be served with a decision made
on September 23, 2020 by the Federal Court on Administrative
Matters (“Federal Court”), nullifying the APA granted to PEM and
directing the tax authority to re-examine the evidence and basis
for the issuance of the APA. The Federal Court decision is
appealable to the Circuit Courts.
The Company’s legal advisors are of the view
that the Federal Court’s decision was not arrived following
regular procedures, was undertaken hastily, and did not provide
opportunity for the presentation of evidence from PEM. In addition,
the decision is inconsistent with previous legal precedents and
violates the Federal Mexican Constitution. The Company continues to
assess all of its legal options, both domestic and international
including under the North American Free Trade Agreement, and will
make additional updates, when necessary, on its legal plan of
action.
ABOUT THE COMPANY
First Majestic is a publicly traded mining
company focused on silver production in Mexico and is aggressively
pursuing the development of its existing mineral property assets.
The Company presently owns and operates the San Dimas Silver/Gold
Mine, the Santa Elena Silver/Gold Mine and the La Encantada Silver
Mine. Production from these mines are projected to be between
11.0 to 11.7 million silver ounces or 21.4 to 22.9 million silver
equivalent ounces in 2020.
FOR FURTHER INFORMATION contact
info@firstmajestic.com, visit our website at www.firstmajestic.com
or call our toll-free number 1.866.529.2807.
FIRST MAJESTIC SILVER CORP.
"signed"
Keith Neumeyer, President & CEO
Cautionary Note Regarding Forward Looking
Statements
This press release contains “forward‐looking
information” and "forward-looking statements” under applicable
Canadian and U.S. securities laws (collectively, “forward‐looking
statements”). These statements relate to future events or the
Company's future performance, business prospects or opportunities
that are based on forecasts of future results, estimates of amounts
not yet determinable and assumptions of management made in light of
management's experience and perception of historical trends,
current conditions and expected future developments.
Forward-looking statements include, but are not limited to,
statements with respect to: the Company’s business strategy; future
planning processes; commercial mining operations; cash flow;
budgets; the timing and amount of estimated future production;
recovery rates; mine plans and mine life; the future price of
silver and other metals; costs of production; costs and timing of
the development of new deposits; capital projects and exploration
activities and the possible results thereof. Assumptions may
prove to be incorrect and actual results may differ materially from
those anticipated. Consequently, guidance cannot be guaranteed. As
such, investors are cautioned not to place undue reliance upon
guidance and forward-looking statements as there can be no
assurance that the plans, assumptions or expectations upon which
they are placed will occur. All statements other than statements of
historical fact may be forward‐looking statements. Statements
concerning proven and probable mineral reserves and mineral
resource estimates may also be deemed to constitute forward‐looking
statements to the extent that they involve estimates of the
mineralization that will be encountered as and if the property is
developed, and in the case of measured and indicated mineral
resources or proven and probable mineral reserves, such statements
reflect the conclusion based on certain assumptions that the
mineral deposit can be economically exploited. Any statements that
express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives or future
events or performance (often, but not always, using words or
phrases such as “seek”, “anticipate”, “plan”, “continue”,
“estimate”, “expect”, “may”, “will”, “project”, “predict”,
“forecast”, “potential”, “target”, “intend”, “could”, “might”,
“should”, “believe” and similar expressions) are not statements of
historical fact and may be “forward‐looking statements”.
Actual results may vary from forward-looking
statements. Forward-looking statements are subject to known and
unknown risks, uncertainties and other factors that may cause
actual results to materially differ from those expressed or implied
by such forward-looking statements, including but not limited to:
the duration and effects of the coronavirus and COVID-19, and any
other pandemics on our operations and workforce, and the effects on
global economies and society, risks related to the integration of
acquisitions; actual results of exploration activities; conclusions
of economic evaluations; changes in project parameters as plans
continue to be refined; commodity prices; variations in ore
reserves, grade or recovery rates; actual performance of plant,
equipment or processes relative to specifications and expectations;
accidents; labour relations; relations with local communities;
changes in national or local governments; changes in applicable
legislation or application thereof; delays in obtaining approvals
or financing or in the completion of development or construction
activities; exchange rate fluctuations; requirements for additional
capital; government regulation; environmental risks; reclamation
expenses; outcomes of pending litigation; limitations on insurance
coverage as well as those factors discussed in the section entitled
"Description of the Business - Risk Factors" in the Company's most
recent Annual Information Form, available on www.sedar.com, and
Form 40-F on file with the United States Securities and Exchange
Commission in Washington, D.C. Although First Majestic
has attempted to identify important factors that could cause actual
results to differ materially from those contained in
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended.
The Company believes that the expectations
reflected in these forward‐looking statements are reasonable, but
no assurance can be given that these expectations will prove to be
correct and such forward‐looking statements included herein should
not be unduly relied upon. These statements speak only as of the
date hereof. The Company does not intend, and does not assume any
obligation, to update these forward-looking statements, except as
required by applicable laws.
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