{"id":390228,"date":"2020-12-01T05:03:14","date_gmt":"2020-12-01T10:03:14","guid":{"rendered":"http:\/\/www.marketnewsdesk.com\/?p=390228"},"modified":"2020-12-01T05:03:14","modified_gmt":"2020-12-01T10:03:14","slug":"fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\/","title":{"rendered":"Fortuna provides update on status of disputed royalty at the San Jose Mine"},"content":{"rendered":"<div class=\"mw_release\">\n<p align=\"justify\">VANCOUVER, British Columbia, Dec.  01, 2020  (GLOBE NEWSWIRE) &#8212; <strong>Fortuna Silver Mines Inc. <\/strong><strong>(NYSE: FSM) (TSX: FVI) <\/strong>announces an update on the status of the legal proceedings related to a disputed royalty on one of its extracting mining concessions at the San Jose Mine, located in Oaxaca, Mexico.<\/p>\n<p align=\"both\">\n        <strong>Background<\/strong>\n      <\/p>\n<p align=\"justify\">In 2017, the Mexican Geological Service (\u201cSGM\u201d) advised the Company that a previous owner of one of the Company\u2019s mineral concessions at the San Jose Mine, had granted to SGM a royalty of 3% of the billing value of the minerals obtained from the concession. At the date of the Company\u2019s acquisition of the concession, the royalty was not disclosed to the Company and it did not appear on the electronic title register at the Mining Registry although it is listed in the official record books of the concessions of the Mining Registry. The Company obtained advice from external legal counsel which confirmed that there was no legal basis for the creation of the royalty and that it was invalidly created. The Company initiated legal proceedings to uphold its position that no royalty is payable.<\/p>\n<p align=\"both\">\n        <strong>Administrative Proceedings<\/strong>\n      <\/p>\n<p align=\"both\">In 2018, the Company initiated administrative proceedings (the \u201cAdministrative Proceedings\u201d) in the Mexican Federal Administrative Court (\u201cFAC\u201d) against the Direcci\u00f3n General de Minas (\u201cDGM\u201d) to remove reference to the royalty on the grounds that there is no legal basis for the creation of the royalty and that it was invalidly created. The Administrative Proceedings are progressing in accordance with the procedures of the FAC. A decision is expected within the next three to four months.<\/p>\n<p align=\"both\">\n        <strong>Amparo Proceedings<\/strong>\n      <\/p>\n<p align=\"justify\">In January 2020, the Company received notice from the DGM seeking to cancel the mining concession if the royalty, in the Mexican peso equivalent of $30,000,000 plus VAT (being the amount of the claimed royalty from 2011 to 2019), was not paid before March 15, 2020 (refer to <a href=\"https:\/\/fortunasilver.com\/site\/assets\/files\/5125\/fortuna-provides-an-update-on-the-status-of-disp-jdsjs.pdf\" rel=\"nofollow noopener noreferrer\" target=\"_blank\"><u>Fo<\/u><\/a><a href=\"https:\/\/fortunasilver.com\/site\/assets\/files\/5125\/fortuna-provides-an-update-on-the-status-of-disp-jdsjs.pdf\" rel=\"nofollow noopener noreferrer\" target=\"_blank\"><u>r<\/u><\/a><a href=\"https:\/\/fortunasilver.com\/site\/assets\/files\/5125\/fortuna-provides-an-update-on-the-status-of-disp-jdsjs.pdf\" rel=\"nofollow noopener noreferrer\" target=\"_blank\"><u>tuna new<\/u><\/a><a href=\"https:\/\/fortunasilver.com\/site\/assets\/files\/5125\/fortuna-provides-an-update-on-the-status-of-disp-jdsjs.pdf\" rel=\"nofollow noopener noreferrer\" target=\"_blank\"><u>s<\/u><\/a><a href=\"https:\/\/fortunasilver.com\/site\/assets\/files\/5125\/fortuna-provides-an-update-on-the-status-of-disp-jdsjs.pdf\" rel=\"nofollow noopener noreferrer\" target=\"_blank\"><u> release dated January 29, 2020<\/u><\/a>). In February 2020, the Company initiated legal proceedings (the \u201cAmparo Proceedings\u201d) against the DGM in the Seventh District Court in Mexico City (\u201cDistrict Court\u201d) to contest and extinguish the cancellation procedure on the grounds that the royalty is not valid, and also to stay the cancellation process. The District Court in Mexico City admitted the Company\u2019s legal proceedings on March 2, 2020 and granted a permanent stay of execution (akin to an injunction), which protects the Company from the cancellation of the concession until a final non-appealable resolution is reached on the legality of DGM\u2019s cancellation procedure (refer to <a href=\"https:\/\/fortunasilver.com\/site\/assets\/files\/5172\/adnet_fortuna_provides_an_update_on_the_status_of_disp1.pdf\" rel=\"nofollow noopener noreferrer\" target=\"_blank\"><u>Fortuna news release date<\/u><\/a><a href=\"https:\/\/fortunasilver.com\/site\/assets\/files\/5172\/adnet_fortuna_provides_an_update_on_the_status_of_disp1.pdf\" rel=\"nofollow noopener noreferrer\" target=\"_blank\"><u>d<\/u><\/a><a href=\"https:\/\/fortunasilver.com\/site\/assets\/files\/5172\/adnet_fortuna_provides_an_update_on_the_status_of_disp1.pdf\" rel=\"nofollow noopener noreferrer\" target=\"_blank\"><u> March 5, 2020<\/u><\/a>).<\/p>\n<p align=\"justify\">On November 27, 2020, the District Court at first instance found that the Company suffered no harm from the notice of cancellation procedure and dismissed the proceedings (the \u201cProcedural Finding\u201d) without deciding on the merit of the Amparo Proceedings and on the validity of the royalty. The Procedural Finding does not affect the permanent stay of execution, which remains in place. The Company\u2019s Mexican legal advisors are of the view that the decision of the District Court is flawed because the notice of the cancellation procedure related to the payment of a disputed royalty, which is harmful to the Company as the royalty is invalid.<\/p>\n<p align=\"justify\">The Company\u2019s legal position with respect to the disputed royalty remains unchanged. The Company intends to vigorously defend its position and appeal the Procedural Finding and file an appeal with the Collegiate Court in Mexico by the deadline of December 14, 2020. A decision of the Collegiate Court is expected during mid-2021. As set out above, the previously obtained stay of execution protects the Company from the cancellation of the concession and remains in place until all avenues of appeal have been exhausted.\u00a0In the event that the Company does not prevail in the appeal, it may be required to pay the disputed royalty in order to preserve the mining concession.<\/p>\n<p align=\"justify\">\n        <strong>About Fortuna Silver Mines Inc.<\/strong>\n      <\/p>\n<p align=\"justify\">Fortuna Silver Mines Inc. is a Canadian precious metals mining company with operations in Peru, Mexico and Argentina. Sustainability is integral to all our operations and relationships. We produce silver and gold and generate shared value over the long-term for our shareholders and stakeholders through efficient production, environmental protection, and social responsibility. For more information, please visit our website at <a href=\"http:\/\/www.fortunasilver.com\" rel=\"nofollow noopener noreferrer\" target=\"_blank\"><u>www.fortunasilver.com<\/u><\/a>.<\/p>\n<p align=\"justify\">ON BEHALF OF THE BOARD<\/p>\n<p align=\"justify\">Jorge A. Ganoza<br \/>President, CEO, and Director<br \/>Fortuna Silver Mines Inc.<\/p>\n<p align=\"justify\">Trading symbols: NYSE: FSM | TSX: FVI<\/p>\n<p align=\"justify\">Investor Relations: <br \/>Carlos Baca<br \/>T (Peru): +51.1.616.6060, ext. 0<br \/>E: <a href=\"mailto:info@fortunasilver.com\" rel=\"nofollow noopener noreferrer\" target=\"_blank\">info@fortunasilver.com<\/a><\/p>\n<p align=\"left\">Forward looking Statements<\/p>\n<p align=\"justify\">\n        <em>This news release contains forward-looking statements which constitute \u201cforward-looking information\u201d within the meaning of applicable Canadian securities legislation and \u201cforward-looking statements\u201d within the meaning of the \u201csafe harbor\u201d provisions of the Private Securities Litigation Reform Act of 1995 (collectively, \u201cForward-looking Statements\u201d). All statements included herein, other than statements of historical fact, are Forward-looking Statements and are subject to a variety of known and unknown risks and uncertainties which could cause actual events or results to differ materially from those reflected in the Forward-looking Statements. The Forward-looking Statements in this news release may include, without limitation, statements about the Company\u2019s <\/em><br \/>\n        <em>Amparo P<\/em><br \/>\n        <em>roceedings and administrative proceedings against the DGM, <\/em><br \/>\n        <em>the outcome of the administrative proceedings against the DGM; <\/em><br \/>\n        <em>the outcome of the Company\u2019s <\/em><br \/>\n        <em>Amparo P<\/em><br \/>\n        <em>roceedings against the DGM to contest the cancellation procedure, the appeal of decisions and judgments <\/em><br \/>\n        <em>made<\/em><br \/>\n        <em> by the Courts, and the potential for the Company to be required to pay<\/em><br \/>\n        <em>the amount claimed to preserve its mining concession in the event that the Company\u2019s <\/em><br \/>\n        <em>Amparo P<\/em><br \/>\n        <em>roceedings to contest the cancellation procedure are unsuccessful, <\/em><br \/>\n        <em>or <\/em><br \/>\n        <em>how the Company would satisfy such payment and other matters. Often, but not always, these Forward-looking Statements can be identified by the use of words such as \u201cestimated\u201d, \u201cpotential\u201d, \u201copen\u201d, \u201cfuture\u201d, \u201cassumed\u201d, \u201cprojected\u201d, \u201cused\u201d, \u201cdetailed\u201d, \u201chas been\u201d, \u201cgain\u201d, \u201cplanned\u201d, \u201creflecting\u201d, \u201cwill\u201d, \u201ccontaining\u201d, \u201cremaining\u201d, \u201cto be\u201d, or statements that events, \u201ccould\u201d or \u201cshould\u201d occur or be achieved and similar expressions, including negative variations.<\/em>\n      <\/p>\n<p align=\"justify\">\n        <em>Forward-looking Statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any results, performance or achievements expressed or implied by the Forward-looking Statements. Such uncertainties and factors include, among others, <\/em><br \/>\n        <em>that the Company may be unsuccessful in its Amparo Proceedings and may be required to pay the amount of the disputed royalty plus VAT; <\/em><br \/>\n        <em>the duration and effects of COVID-19, and any other pandemics on our operations<\/em><br \/>\n        <em>, production <\/em><br \/>\n        <em>and workforce, and the effects on global economies, governments, courts<\/em><br \/>\n        <em> and <\/em><br \/>\n        <em>society<\/em><br \/>\n        <em>, actual results of production and exploration activities; <\/em><br \/>\n        <em>changes in general economic conditions and financial markets; changes in prices for <\/em><br \/>\n        <em>gold, <\/em><br \/>\n        <em>silver and other metals; <\/em>fluctuation in foreign exchange rates; any extension of the currency controls in Argentina; <em>technological and operational hazards in Fortuna\u2019s mining and mine development activities; <\/em>delays in commissioning at Lindero; delays in achieving steady production and commencement of commercial production at Lindero; <em>risks inherent in mineral exploration; uncertainties inherent in the estimation of mineral reserves, mineral resources, and metal recoveries; changes to current estimates of mineral reserves and resources; changes to production estimates; governmental and other approvals; changes in government, political unrest or instability in countries where Fortuna is active; labor relations issues; as well as those factors discussed under \u201cRisk Factors\u201d in the Company&#8217;s Annual Information Form. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in Forward-looking Statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended.<\/em><\/p>\n<p align=\"justify\">\n        <em>Forward-looking Statements contained herein are based on the assumptions, beliefs, expectations and opinions of management, including but not limited to expectations regarding success in its legal <\/em><br \/>\n        <em>and administrative <\/em><br \/>\n        <em>proceedings which is based upon advice from independent law firms, expected trends in mineral prices and currency exchange rates; the accuracy of the Company\u2019s current mineral resource and reserve estimates; that the Company\u2019s activities will be in accordance with the Company\u2019s public statements and stated goals; that there will be no material adverse change affecting the Company or its properties; that all required approvals will be obtained; that there will be no significant disruptions affecting operations and such other assumptions as set out herein. Forward-looking Statements are made as of the date hereof and the Company disclaims any obligation to update any Forward-looking Statements, whether <\/em><br \/>\n        <em>as a result of<\/em><br \/>\n        <em> new information, future events or results or otherwise, except as required by law. There can be no assurance that the Company will be successful in its legal proceedings or that these Forward-looking Statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on Forward-looking Statements.<\/em>\u00a0<\/p>\n<p>      <img loading=\"lazy\" decoding=\"async\" class=\"__GNW8366DE3E__IMG\" src=\"https:\/\/www.globenewswire.com\/newsroom\/ti?nf=ODA5NDQ0MCMzODQ5OTY2IzIwODI2MDk=\" width=\"1\" height=\"1\" \/><br \/>\n      <br \/>\n      <img loading=\"lazy\" decoding=\"async\" class=\"__GNW8366DE3E__IMG\" src=\"https:\/\/ml.globenewswire.com\/release\/track\/f578b8d7-5d09-4d28-aeb8-700385a01abf\" width=\"1\" height=\"1\" \/>\n    <\/div>\n<div class=\"mw_contactinfo\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>VANCOUVER, British Columbia, Dec. 01, 2020 (GLOBE NEWSWIRE) &#8212; Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) announces an update on the status of the legal proceedings related to a disputed royalty on one of its extracting mining concessions at the San Jose Mine, located in Oaxaca, Mexico. Background In 2017, the Mexican Geological Service (\u201cSGM\u201d) advised the Company that a previous owner of one of the Company\u2019s mineral concessions at the San Jose Mine, had granted to SGM a royalty of 3% of the billing value of the minerals obtained from the concession. At the date of the Company\u2019s acquisition of the concession, the royalty was not disclosed to the Company and it did not appear on the electronic &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/www.marketnewsdesk.com\/index.php\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Fortuna provides update on status of disputed royalty at the San Jose Mine&#8221;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-390228","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Fortuna provides update on status of disputed royalty at the San Jose Mine - Market Newsdesk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.marketnewsdesk.com\/index.php\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fortuna provides update on status of disputed royalty at the San Jose Mine - Market Newsdesk\" \/>\n<meta property=\"og:description\" content=\"VANCOUVER, British Columbia, Dec. 01, 2020 (GLOBE NEWSWIRE) &#8212; Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) announces an update on the status of the legal proceedings related to a disputed royalty on one of its extracting mining concessions at the San Jose Mine, located in Oaxaca, Mexico. Background In 2017, the Mexican Geological Service (\u201cSGM\u201d) advised the Company that a previous owner of one of the Company\u2019s mineral concessions at the San Jose Mine, had granted to SGM a royalty of 3% of the billing value of the minerals obtained from the concession. At the date of the Company\u2019s acquisition of the concession, the royalty was not disclosed to the Company and it did not appear on the electronic &hellip; Continue reading &quot;Fortuna provides update on status of disputed royalty at the San Jose Mine&quot;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.marketnewsdesk.com\/index.php\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\/\" \/>\n<meta property=\"og:site_name\" content=\"Market Newsdesk\" \/>\n<meta property=\"article:published_time\" content=\"2020-12-01T10:03:14+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.globenewswire.com\/newsroom\/ti?nf=ODA5NDQ0MCMzODQ5OTY2IzIwODI2MDk=\" \/>\n<meta name=\"author\" content=\"Newsdesk\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Newsdesk\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\\\/\"},\"author\":{\"name\":\"Newsdesk\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/#\\\/schema\\\/person\\\/482f27a394d4fda80ecb5499e519d979\"},\"headline\":\"Fortuna provides update on status of disputed royalty at the San Jose Mine\",\"datePublished\":\"2020-12-01T10:03:14+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\\\/\"},\"wordCount\":1463,\"image\":{\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.globenewswire.com\\\/newsroom\\\/ti?nf=ODA5NDQ0MCMzODQ5OTY2IzIwODI2MDk=\",\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\\\/\",\"url\":\"https:\\\/\\\/www.marketnewsdesk.com\\\/index.php\\\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\\\/\",\"name\":\"Fortuna provides update on status of disputed royalty at the San Jose Mine - 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Market Newsdesk","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.marketnewsdesk.com\/index.php\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\/","og_locale":"en_US","og_type":"article","og_title":"Fortuna provides update on status of disputed royalty at the San Jose Mine - Market Newsdesk","og_description":"VANCOUVER, British Columbia, Dec. 01, 2020 (GLOBE NEWSWIRE) &#8212; Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) announces an update on the status of the legal proceedings related to a disputed royalty on one of its extracting mining concessions at the San Jose Mine, located in Oaxaca, Mexico. Background In 2017, the Mexican Geological Service (\u201cSGM\u201d) advised the Company that a previous owner of one of the Company\u2019s mineral concessions at the San Jose Mine, had granted to SGM a royalty of 3% of the billing value of the minerals obtained from the concession. At the date of the Company\u2019s acquisition of the concession, the royalty was not disclosed to the Company and it did not appear on the electronic &hellip; Continue reading \"Fortuna provides update on status of disputed royalty at the San Jose Mine\"","og_url":"https:\/\/www.marketnewsdesk.com\/index.php\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\/","og_site_name":"Market Newsdesk","article_published_time":"2020-12-01T10:03:14+00:00","og_image":[{"url":"https:\/\/www.globenewswire.com\/newsroom\/ti?nf=ODA5NDQ0MCMzODQ5OTY2IzIwODI2MDk=","type":"","width":"","height":""}],"author":"Newsdesk","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Newsdesk","Est. reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.marketnewsdesk.com\/index.php\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\/#article","isPartOf":{"@id":"https:\/\/www.marketnewsdesk.com\/index.php\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\/"},"author":{"name":"Newsdesk","@id":"https:\/\/www.marketnewsdesk.com\/#\/schema\/person\/482f27a394d4fda80ecb5499e519d979"},"headline":"Fortuna provides update on status of disputed royalty at the San Jose Mine","datePublished":"2020-12-01T10:03:14+00:00","mainEntityOfPage":{"@id":"https:\/\/www.marketnewsdesk.com\/index.php\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\/"},"wordCount":1463,"image":{"@id":"https:\/\/www.marketnewsdesk.com\/index.php\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\/#primaryimage"},"thumbnailUrl":"https:\/\/www.globenewswire.com\/newsroom\/ti?nf=ODA5NDQ0MCMzODQ5OTY2IzIwODI2MDk=","inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.marketnewsdesk.com\/index.php\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\/","url":"https:\/\/www.marketnewsdesk.com\/index.php\/fortuna-provides-update-on-status-of-disputed-royalty-at-the-san-jose-mine\/","name":"Fortuna provides update on status of disputed royalty at the San Jose Mine - 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