MAC: Mines and Communities

Mexican landowners win first step in legal battle to reclaim their lands

Published by MAC on 2013-04-28
Source: ProDESC, United Steelworkers (USW)

Historic Legal Triumph For Communal Landowners In Struggle Against Toronto-based Excellon Resources

Project for Economic, Social and Cultural Rights, Mexico - ProDESC

20 April 2013

Gómez Palacio, Durango, México - On Thursday, April 18, 2013, communal landowners of the Ejido La Sierrita and representatives of Excellon Resources, Inc. gathered in the Agrarian Tribunal in Gómez Palacio, Mexico to address the lawsuit filed by the Ejido against Excellon for rescission of the land agreement signed by both parties in 2008.

After the hearing, the President of the Sixth District Agrarian Tribunal, Raúl Eduardo Covarrubias García, found that the Company should return 1,100 hectares to the Ejido as soon as possible. Ten of these hectares, however, remain in question and their status will be addressed in further litigation.

The court also set the date for an additional hearing on May 9 at which point Excellon will formally turn over the rented land area and fix deadlines for the return of remaining lands.

"We hope that Excellon complies fully and returns our land as promised today in court. Nonetheless, we consider this as a historic triumph for us landowners in our struggle to defend our human rights," said David Espinoza, President of the General Assembly of La Sierrita.

The landowners of the Ejido La Sierrita are hopeful at this turn of events. But they insist that the remaining matters in the lawsuit and further negotiations with the Company take place in a framework of respect for their human rights.

ProDESC, advisor to the Ejido, congratulated the landowners in this victory. Nonetheless, representatives of the non-profit organization remind followers of the conflict that this resolution is only a first step in the lawsuit, which also seeks to remedy the human rights violations that Excellon committed against landowners of La Sierrita.

Sara Eny Curiel Ochoa
Communication ProDESC (Proyecto de Derechos Económicos, Sociales y Culturales),
Office 55-5212-2230, 55-5212-2229, 55-3334-6045, Mobile 04455-3708-389

Barring Meaningful Change, Excellon Resources Risks More Trouble, Steelworkers Say

United Steelworkers (USW)

29 April 2013

TORONTO - The share price of Excellon Resources, a Canadian mining company operating in Mexico, has declined dramatically despite feel-good announcements of possible new ore finds, share buybacks, major insider purchases and a strategic plan including a reverse stock split.

Following a 62-per-cent share price decline over the last two years, more trouble can be expected for Excellon unless there is a meaningful change in direction from company management, the United Steelworkers (USW) says.
"The company has sought to undermine the National Miners' and Metalworkers' Union of Mexico (known as Los Mineros), the only democratic union seeking to represent workers," noted Ken Neumann, USW National Director.

"Excellon has refused to engage in any serious dialogue with communal landowners at its La Platosa mine in Mexico- the company's chief source of revenue," Neumann said.

"This company is a long way from being out of the woods. Shareholders and new investors should exert caution until the company moves to negotiate settlements with Los Mineros and the communal landowners."
Excellon's latest annual report to shareholders lists $8 million in net profits. However, this was almost entirely due to the same amount of deferred tax credits that will be used to offset future taxes, the USW points out.

In 2012, Excellon actually saw an 86-per-cent decline in earnings before interest, taxes, depreciation and amortization (EBITDA), which is a real measure of profitability and cash flow, a USW analysis of the company shows.

The USW has sent a letter to Excellon shareholders, stating, in part:
Since July 5, 2012, when a union election tainted by the presence of thugs and company interference was held at the La Platosa mine in Mexico, the Company's share price dropped by 43%, as compared to a 24% decline for comparable Mexican mining companies trading primarily on the Toronto Stock Exchange. Had Excellon's stock performance merely mirrored the activity of comparable companies, its share price would be 33% higher.

The USW maintains that investor confidence cannot be restored unless Excellon management changes direction.

The union previously sent letters to Excellon shareholders to raise awareness of questionable management actions; highlight concerns over the company's corporate governance; and point to the resignations of the CEO and CFO in 2012 as evidence of internal disarray.

The USW joined with the Canadian Labour Congress (CLC), representing over three million members, in filing a complaint under guidelines established by the Organization for Economic Cooperation and Development (OECD) for multinational corporations.
The USW also condemned the June 2012 destruction of a peaceful encampment that was established at the La Platosa mine to protest Excellon's treatment of communal landowners and attacks on Los Mineros. The CLC raised concerns about Excellon directly with the Canadian embassy in Mexico.

"It would be a mistake by investors to believe that Excellon's problems are behind it," said Neumann.

"The company clearly has credibility problems and we believe management intransigence will risk further damage to its reputation and decrease shareholder value."

Excellon's annual meeting will be held Tuesday, April 30, in Toronto.
For further information:
Ken Neumann, USW National Director for Canada, 416-544-5951
Joe Drexler, USW Strategic Campaigns, 416-544-6009 , 416-434 7907
Bob Gallagher, USW Communications, 416-544-5966 , 416-434-2221

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