Excellon having trouble with the natives at Platosa
2008-01-16 17:00 ET - News Release
Mr. Richard Brissenden reports
EXCELLON CORPORATE UPDATE
Excellon Resources Inc. wishes to update investors with respect to two recent events concerning the company's Platosa test-mine operations.
Excellon Resources Inc. has learned that workers at Penoles Naica mine went on strike on Tuesday in a pay dispute. The company understands that Penoles normally has good relations with its workers and unions, and that strikes at its mines and smelters are not that common. Penoles has said that it will continue to try to reach a pay agreement with the union. The company understands that, for the duration of the strike, the Naica mill, to which the company currently sells the production from its Platosa test mine, will be unable to accept any further shipments from Platosa. The company is of the view that a strike of short duration will not materially affect the company's operations, but that a prolonged strike could have a material adverse effect on its cash flow from operations. If it appears that the strike will be prolonged, the company will take appropriate steps to reduce its operations and thereby conserve its cash resources.
The company also reports that a number of individuals, some of whom are from the neighbouring Ejido La Sierrita, have instituted a peaceful protest that is restricting access to its Platosa test-mine. The company believes this protest is a tactic in connection with the negotiations between the company and La Sierrita with respect to the purchase or lease by the company of certain Ejido lands, and is extremely disappointed that certain members of the Ejido appear to have precipitated this action. While the protesters are permitting a skeleton crew to enter the mine and maintain water pumping, ventilation and other critical activities, general mining operations have been suspended while the protest is in place.
An Ejido is an agricultural co-operative, in which individual members of the Ejido have the right to use and/or cultivate specific portions of the lands owned by the Ejido. Excellon has been an integral part of the local community from the beginning of its operations at Platosa, supporting and initiating a large number of projects at Ejido La Sierrita, and in the nearby town of Bermejillo. The company has been negotiating with La Sierrita in good faith for months with respect to the proposed land acquisition, and has involved local, state and federal governments to ensure the company has complied with all relevant Mexican laws and requirements in its dealings with the Ejido. In late 2007, all parties received the results of a valuation of the property carried out by a recognized Mexican authority. The company has offered La Sierrita far more than that value, so far to no avail. The dealings with the Ejido have been a priority of the company for months and it will continue to work diligently trying to come to an agreement satisfactory to both parties. The company understands that Mexican government officials are hoping to meet with the protesters today or tomorrow with a view to ending the protest in a peaceful manner and returning to negotiations. The company is hopeful that the protest will be lifted shortly, but it is not in a position to determine how long it may last. Although the company is willing to return to negotiations with the Ejido, it will not do so as long as the protesters are in place.
The company will provide updates on the Naica strike and Ejido protest as the matters progress.