- First Majestic Silver’s (FR) ongoing tax dispute with the Mexican Government has further deteriorated, promoting its share price to fall
- Earlier this year, First Majestic brought NAAFTA-based legal action against the Government of Mexico, claiming the national tax authority had unlawfully neglected a previously negotiated tax pricing arrangement
- Escalating matters between the two parties further, a federal court ruling has now cancelled the previous advanced silver pricing agreement enacted between 2010 and 2014
- First Majestic disputes the ruling, however, claiming the decision arrived hastily, did not follow the regular procedures nor provide enough time to present evidence
- First Majestic Silver (FR) is down 5.85 per cent and is trading at C$12.88 per share
First Majestic Silver’s (FR) ongoing tax dispute with the Mexican Government has further deteriorated, promoting its share-price to fall.
Earlier this year, First Majestic brought NAAFTA-based legal action against the Government of Mexico, claiming national tax authority Servicio de Administracion Tributaria, known as SAT, had unlawfully neglected previously negotiated tax pricing arrangements.
First Majestic’s action ushered in a 90-day discussion with the Government, in the hopes of resolving the issue. Nevertheless, that period has now elapse, with no agreement in sight and the tax dispute still unresolved.
Meanwhile, escalating matters further, a federal court ruling has cancelled a previous advanced silver price agreement enacted between 2010 and 2014. The agreement originally applied to silver taxes on First Majestic’s regional subsidiary Primero Empresa Minera.
With the agreement now nullified, the federal body has directed the reverent authorities to begin reassessing how the agreement originated and basis for its initial approval.
First Majestic disputes the ruling, however, claiming the decision arrived hastily and did not follow the regular procedures, without time for PEM to present evidence.
The company further claims the decision is inconsistent with previous legal precedents and violates the Federal Mexican Constitution.
In response to the legal action, the company is currently assessing its next move, including further use of the North American Free Trade Agreement.
The company currently owns and operates the San Dimas, Santa Elena and the La Encantada silver and gold mines, which are all within Mexico.
As yet, the company has not outline if or how the ongoing legal matters will impact its present or future mining operations in the region.
First Majestic Silver (FR) is down 5.85 per cent and is trading at C$12.88 per share at 2:07pm EDT.