{"id":1184348,"date":"2020-05-14T07:41:24","date_gmt":"2020-05-14T12:41:24","guid":{"rendered":"https:\/\/www.mining.com\/?p=1023825"},"modified":"2020-05-14T07:41:24","modified_gmt":"2020-05-14T12:41:24","slug":"first-majestic-takes-tax-dispute-in-mexico-to-arbitration","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1184348","title":{"rendered":"First Majestic takes tax dispute in Mexico to arbitration"},"content":{"rendered":"<p>First Majestic\u00a0Silver (NYSE:AG) (TSX:FR) <a href=\"https:\/\/www.firstmajestic.com\/investors\/news-releases\/first-majestic-initiates-nafta-arbitration-process-against-mexico-for-violating-international-law\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">has initiated an arbitration process against Mexico<\/a> under the North American Free Trade Agreement (NAFTA) over a dispute involving how the silver producer is taxed in the country.<\/p>\n<div class='ad-slot' id='div-gpt-ad-1561499308230-0'><script>googletag.cmd.push(function() {    googletag.display('div-gpt-ad-1561499308230-0');    googletag.pubads().addEventListener('slotRenderEnded', function (event) {        if (event.isEmpty) {            var id = event.slot.getSlotElementId();            var x = document.getElementById(id);            if(x == null) return;            if (x.parentElement.classList.contains('ad-slot')) {                x.parentElement.style.display = 'none';            }\t\t\t\t        }    });});<\/script><\/div>\n<p>The Canadian miner said the notice<br \/>\nserved the Mexican government kicks off a 90-day process for the L\u00f3pez Obrador<br \/>\nadministration to enter into negotiations with the company.<\/p>\n<p>First Majestic&nbsp;argues the tax<br \/>\nauthority has &#8220;exhibited a total disregard for the applicable provisions<br \/>\nof three separate double taxation treaties&#8221;. It also said the agency had \u201cunlawfully<br \/>\nopted to ignore\u201d an advanced pricing agreement, governing the tax on silver<br \/>\nsales between 2010-2014 by the miner\u2019s subsidiary Primero Empresa Minera.<\/p>\n<p>The Vancouver-based miner said efforts<br \/>\nto resolve the dispute had been met with &#8220;intimidation tactics&#8221;. Attempts<br \/>\nto challenge such line of action in Mexico\u2019s legal system, in turn, had been thwarted<br \/>\nby the coronavirus pandemic as most courts are unavailable for hearings,<br \/>\nit said.<\/p>\n<p>First Majestic\u2019s three producing<br \/>\nmines and several project are all located in Mexico, the world\u2019s top silver<br \/>\nproducer. This means the company\u2019s business is dependent on its operations in<br \/>\nthe country.<\/p>\n<h2><strong>In the red<\/strong><\/h2>\n<p>The response of governments<br \/>\nworldwide to the covid-19 pandemic since mid-March has led to&nbsp;disrupted<br \/>\nmining activities&nbsp;across the globe.<\/p>\n<p>First Majestic hasn\u2019t been immune<br \/>\nto the effects of lockdowns across Mexico, which has confirmed 40,186 cases as<br \/>\nof Thursday morning.<\/p>\n<p>The miner <a href=\"https:\/\/www.firstmajestic.com\/investors\/news-releases\/first-majestic-reports-first-quarter-financial-results-temporarily-postpones-the-sale-of-silver-and-gold-due-to-covid-19-announces-operational-restart-procedures\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">posted a first-quarter loss of $32.4 million<\/a>, or 15 cents a share, compared to a profit in the same period last year.<\/p>\n<p>\u201cAs the COVID-19 pandemic sparked higher than normal volatility in the metals market near the end of the quarter, we temporarily suspended our silver and gold sales as paper prices dropped significantly below true physical prices,\u201d President and CEO, Keith Neumeyer, <a href=\"https:\/\/www.firstmajestic.com\/investors\/news-releases\/first-majestic-reports-first-quarter-financial-results-temporarily-postpones-the-sale-of-silver-and-gold-due-to-covid-19-announces-operational-restart-procedures\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">said on Thursday<\/a>. \u201cThese inventoried ounces have been carried over into the second quarter and will be sold as prices improve.\u201d\u00a0<\/p>\n<p>The company\u2019s shares have dropped 38% since the beginning of the year as silver production has been <a href=\"https:\/\/www.mining.com\/silver-miners-hit-hardest-by-lockdowns-report\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">the biggest victim of covid-19<\/a>. Nearly 66% of the world\u2019s annual output still on hold, but the situation is expected to change beginning next week.<\/p>\n<p>First Majestic\u2019s stock was down 1.7%<br \/>\nto $7.65 in pre-market in New York. In Canada shares closed at C$10.79 on<br \/>\nWednesday, leaving the company with a market capitalization of C$2.26 billion<br \/>\n(about $1.6bn).<\/p>\n<p>Mexico\u2019s government said on<br \/>\nWednesday that 269 coronavirus-free towns will reopen on Monday, as part of a<br \/>\ngradual nationwide return to a \u201cnew normal\u201d. <\/p>\n<p>The phased reopening was announced<br \/>\na day after the nation\u2019s social security institute reported 555,247 jobs lost<br \/>\nin April, the largest monthly drop in history.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Canadian silver miner argues Mexico&#8217;s tax authority has disregarded provisions of three separate double taxation treaties.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[2849,949,369,2640],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1184348"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1184348"}],"version-history":[{"count":7,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1184348\/revisions"}],"predecessor-version":[{"id":1184503,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1184348\/revisions\/1184503"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1184348"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1184348"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1184348"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}