Sierra Metals Granted Temporary Suspension of Adverse Ruling Over Polo y Ron Minerals Action
Sierra Metals Inc. (SMT.V) today reported that a Federal Court in the State of Chihuahua has granted the company a temporary suspension of the adverse resolution issued by the State Court of Chihuahua, Mexico. A final verdict by the Federal Court is pending. The Company will continue to vigorously defend this claim by applying the proper legal resources necessary to defend its position. Sierra continues to believe that the original claim is without merit.
In October 2009, Polo y Ron Minerals, S.A. de C.V. (P&R) sued the Company and one of its subsidiaries, Dia Bras Mexicana, S.A. de C.V. P&R claimed damages for the cancellation of an option agreement regarding the San Jose properties in Chihuahua, Mexico. The Company believes that it has complied with all of its obligations pertaining to the Option Agreement.
In October 2011, the 8th Civil Court of the Judicial District of Morelos in Chihuahua issued a resolution that absolved the Company from the claims brought against it by P&R on the basis that P&R did not provide evidence to support any of its claims. P&R appealed this resolution to the State Court, which overruled the previous resolution and ordered the Company to: (i) transfer to P&R 17 mining concessions from the Company's Bolivar project, including the mining concessions where mine operations are located; and (ii) pay US$422,674 to P&R.
The San Jose Properties are not located in any areas where Dia Bras Mexicana, S.A. de C.V currently operates, nor are these properties included in any resource estimates of the Company.
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