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November 12, 2021

Fortuna’s Mexican silver mine faces uncertainty over permit expiry

The San Jose silver mine is being operated on a temporary basis according to a recent court order.

Canadian mining firm Fortuna Silver Mines’ ten-year-old mine in southern Mexico is currently at the risk of being closed down as a result of the expiry of its permit.

Operated by Fortuna Silver Mines Mexican subsidiary Companía Minera Cuzcatlán (CMC), the San Jose silver mine received an environmental impact authorization (EIA) for a 12-year period until 23 October 2021.

CMC filed an application in May 2021 to extend the EIA term for an additional ten years.

However, Mexico’s Secretariat of Environment and Natural Resources (SEMARNAT) denied the application due to a pending evaluation related to the regularisation of the mine’s ancillary infrastructure.

In a press statement, Fortuna Silver Mines said: “In addition, it cited non-receipt of the requested information, which the company has already provided to the authority.

“The company is reviewing the reasons for the denial with its advisers, but believes that it is fundamentally in compliance with all material aspects of the San Jose EIA and is entitled to an extension.”

The San Jose silver mine is currently operating under the protection of Mexican courts, which allows the continued operation of mine beyond the expiry date of the EIA.

The firm is permitted to operate the mine only on a temporary basis according to the recent court order, according to Reuters.

Sources familiar with the matter told the news agency that the mine’s future would remain uncertain despite ongoing meetings between the company and the government.

As part of the San Jose mine’s environmental impact assessment, SEMARNAT would work to organise the consultation of nearby indigenous Zapotec communities, allowing the communities to decide ‘over their territory’.

Last year, the mine reported production of 6.2Moz of silver and nearly 38,000oz of gold.

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