BRITISH COLUMBIA

First Majestic receives almost $15M of possible US$93.84 damage award

07/02/2013 10:42 EDT | Updated 09/01/2013 05:12 EDT
VANCOUVER - First Majestic Silver Corp. (TSX:FR) says it has received a C$14.85-million, court-awarded payment in its dispute with the former CEO of a First Majestic subsidiary.

The money is a partial payment in a US$93.84-million award granted First Majestic by the Supreme Court of British Columbia against Hector Davila Santos and Minerales y Minas Mexicana S.A. de C.V.

The judgment, which found Davila had failed in his fiduciary duty to First Silver Reserve Inc. regarding a mine purchase, is being appealed.

"Until such times as all appeals by the defendants are determined, the judgment should not be regarded as final," First Majestic cautioned Tuesday.

The court case began in 2007 when First Majestic filed suit regarding the acquisition by Minera Arroyo Del Agua S.A. de C.V., which subsequently became Minerales y Minas Mexicana, over the purchase of the Bolanos mine from Grupo Mexico.

The court concluded that the Bolanos opportunity belonged to FSR and that Davila breached his fiduciary duty by acquiring the mine through MMM, First Majestic said.

Meanwhile, the company said the Court of Appeal for British Columbia has ordered Davila and MMM to post security for the remaining trial judgment in the amount of US$79 million.

First Majestic is a mining company focused on silver production in Mexico.