Mexico Supreme Court issues draft decision declaring Almaden Minerals’ claims ineffective

Almaden personnel at the Ixtaca project. (Image courtesy of Almaden Minerals).

Mexico’s Supreme Court has ordered the Ministry of Economy (ME) to declare ineffective Almaden Minerals’ (TSX: AMM; NYSE-AM: AAU) titles for its Ixtaca gold-silver project, located in the east-central state of Puebla. 

The decision comes after seven years of legal procedures, which were initiated by the Tecoltemi Indigenous community whose members alleged that they were not consulted about the project and that the mining operation put their water sources, health and rights to a clean environment at risk.

The Supreme Court’s decision is based on an appeal of an April 2019 lower court ruling that was originally brought to the Collegiate (Appeals) Court of Mexico by the Mexican government, and Almaden as an affected third party. The top court was forced to intervene after the Collegiate resolved that it did not have the authority to hear the case.

The Puebla state court ruling on which the appeal was centred stated that Mexico’s mineral title system is unconstitutional because consultation with Indigenous communities is not required before titles are granted. This means that the system contravenes the International Labour Organization’s Indigenous and Tribal Peoples Convention, which has been endorsed by Mexico.

Three years ago, the state court also ruled that Almaden’s mineral claims should be suspended while consultation was completed.

In its recent decision, however, the Supreme Court said that the Mexican mineral title law is constitutional, but that before issuing Almaden’s mineral titles, the Ministry of Economy (ME) should have provided for a consultation procedure with relevant Indigenous communities. 

Besides declaring the Canadian miner’s titles ineffective, the draft orders the ME to re-issue them following the Ministry’s compliance with its obligation to carry out the necessary procedures to consult with Indigenous communities. 

According to Almaden, since the Supreme Court issued a draft decision, the final ruling may be modified. 

“The decision will take effect at the time of official notification of the decision to the company which is expected within the next two months,” the Vancouver-based firm said in a media statement.

“Almaden intends to review the final decision when it is available and interact with Mexican government officials and local community officials in order to fully understand the impact of this decision on the company’s mineral claims prior to determining its next steps. At present, there is no timeline for consultation by the Ministry of the Economy with Indigenous communities.”

The high-grade Ixtaca project is located 120 kilometres southeast of the Pachuca mine, whose historic production of 1.4 billion ounces of silver and 7 million ounces of gold makes it one of the largest gold and silver deposits in Mexico.

The Ixtaca deposit, on the other hand, hosts a proven and probable reserve containing 1.38 million ounces of gold and 85.1 million ounces of silver (73.1 million tonnes grading 0.59 g/t Au and 36.3 g/t Ag). A feasibility study was completed in 2018, and Almaden has been working on advancing the project towards production.