Silver Bull Resources Inc., a Canadian mining company, announced that it has secured third-party funding for the investment arbitration proceedings filed against Mexico over the Sierra Mojada zinc and silver deposit in Coahuila, Mexico. Silver Bull claims US$178 million in damages. Translation provided by JIGGSLAW®.
The third-party funding agreement was signed with Bench Walk Advisors LLC Fund, and it will provide a credit line to pay all of the company’s legal, judicial, and external expert costs as well as the corporate management expenses associated with the company.
Silver Bull has advanced an estimated US$9.5 million to purchase a contingent entitlement of damages if compensation from Mexico is obtained. The mining company has retained the legal services of Boies Schiller Flexner (UK) LLP. The Canadian company claims in arbitration that a local group of miners has been blocking the Sierra Mojada project since September 2019. Silver Bull accuses the Mexican government of failing to act, making access to the site impossible for more than four years, as well as to other lawful businesses in Mexico, which has caused project investors to pull out and has given place to expropriation.
The arbitration
The arbitration was submitted in July 2023 before the International Centre for Settlement of Investment Disputes. On March 2, 2023, Silver Bull formally notified Mexico of its intention to initiate proceedings for the unlawful expropriation of its investments without compensation, for failing to provide fair and reasonable treatment, protection, and full security to the company and its investors, and for failing to comply with the national treatment standard included in the North America Free Trade Treaty (known in Spanish as TLCAN).
On May 30, 2023, Silver Bull met with Mexican government officials in Mexico City in an attempt to find amicable solutions and avoid arbitration. However, the TLCAN’s 90-day deadline for reaching an amicable settlement ended on June 2, 2023, with no agreement.
Sierra Mojada
The municipality’s history is intertwined with the mining industry. Silver and zinc are extracted from its landscape and have shaped its people’s relationships and daily lives, who claim debts that have not been paid due to the assignment of rights over the mine in 2000 (see “La minería está en riesgo en Coahuila”, Iván Sánchez, Milenio, 18.11.2019).
For more than 20 years, the company “Mineros Norteños SA de CV” has requested a default of payment relating to three mines from the Canadian company Metalin, a subsidiary of Silver Bull (see “Reviven problemas mineros”, El Siglo Coahuila, January 29, 2015).
