FIRST MAJESTIC SILVER CORP. (the "Company" or
“First Majestic”) announced today that the Mexican tax authority,
the Servicio de Administracion Tributaria (“SAT”), has by its
various actions exhibited a total disregard for the applicable
provisions of three separate double taxation treaties that it has
entered into with Canada, Barbados and Luxembourg, which are
relevant to First Majestic and its subsidiaries.
SAT has repeatedly and unilaterally chosen to
reject requests for dispute resolution procedures, known as mutual
agreement procedures (“MAPs”), contained within those three
treaties designed for addressing differences in interpretation and
application of those treaties. According to the Company’s advisors,
such action is unprecedented not only for Mexico but
internationally. In addition, notwithstanding Mexican law and the
2012 Advance Pricing Agreement negotiated and finalized between the
SAT and Primero Empresa Minera, S.A. de C.V. (“Primero”), its
Mexican subsidiary, confirming Primero’s basis for paying taxes on
the price Primero realized for silver sales between 2010 and 2014,
the SAT has unlawfully opted to ignore the legal existence of this
Advance Pricing Agreement.
While the Company has made several attempts to
seek to resolve its differences with the SAT using both local
administrative and legal procedures and those contained within the
treaties for avoidance of double taxation, and as well through
diplomatic discussions, all such efforts have been met with actions
of SAT intended to intimidate the Company, its subsidiaries and its
employees, including notifications to Primero to secure amounts it
claims are owed pursuant to its reassessments issued in violation
of the terms of the Advance Pricing Agreement. These notifications
impose restrictions on Primero’s ability to deal with its fixed
assets until this matter is resolved.
The Company has challenged SAT’s intimidation
tactics through all Mexican domestic means available to it,
including a constitutional challenge (called an “amparo”) before a
District Court, and a complaint before Mexico’s Federal Taxpayer
Defense Attorney's Office (known as “PRODECON”), which proceedings
have yet to be resolved and, due to the ongoing COVID-19 crisis,
the other remaining Mexican courts are currently unavailable for
further hearings on these matters. The Company believes that, in
addition to being contrary to various provisions of the Federal
Constitution of the United Mexican States and Mexican domestic law,
and Mexican court decisions, SAT’s actions contravene international
law principles. In the Company’s view, these actions are neither
fair nor equitable, are discriminatory against the Company as a
foreign investor and amount to a denial of justice under
international law. The Company is extremely disappointed that the
unwarranted actions and threats of SAT, have continued at a time
when the Company is focussed on protecting and preserving the
employment and livelihood in Mexico of thousands of employees
during the COVID-19 worldwide pandemic crisis. The Company’s
immediate concern during the COVID-19 pandemic has been focussed on
ensuring the health, safety and welfare of its employees and their
families.
Under these circumstances, and in order to
formally require the Government of Mexico to address the unlawful
and unwarranted conduct of SAT for which it is responsible under
international law, the Company has taken steps to serve 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 by the
Company on the Government of Mexico initiates a 90-day process for
the Government of Mexico to enter into good faith and amicable
negotiations with the Company to resolve the current dispute
between the Company and the Government of Mexico.
The Company has deep roots in the social fabric
of Mexico and values its relationships in Mexico with its various
business partners and with various levels of government in Mexico.
It has been recognized as a “Socially Responsible Company” by the
Centro Mexicano para la Filantropria (CEMEFI) for twelve
consecutive years starting in 2008 until the present. Furthermore,
it has a track record of making substantial capital investments and
social programs in Mexico and has plans to continue to make such
further investments. The Company has invested in excess of $2.0
billion in Mexico since 2003 and has approximately 4,700 direct
employees and supplies approximately 20,000 indirect jobs spread
among eight states within Mexico.
The Company has regretfully had to take this
step of providing a Notice of Intent to Submit a Claim to Mexico so
as to prevent further harm to the Company, its investments in
Mexico, and to protect the health and welfare of its workforce.
ABOUT THE COMPANY
First Majestic is a 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.
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
SPECIAL NOTE REGARDING FORWARD-LOOKING
INFORMATION
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: negotiations regarding Mexican tax
matters; resolution of the dispute with SAT; and plans to continue
to make further investments and social programs. 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.
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 outcome of pending, current or proposed litigation; response of
SAT and the Mexican government to the Notice; the duration and
effects of the coronavirus and COVID-19, and any other pandemics on
our operations and workforce; relations with local communities;
changes in national or local governments; changes in applicable
legislation or application thereof; exchange rate fluctuations;
requirements for additional capital; government regulation;
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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