First Majestic Provides SAT Tax Dispute Update
VANCOUVER, British Columbia, Sept. 25, 2020 (GLOBE NEWSWIRE) -- 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.