Agoracom Blog Home

Posts Tagged ‘Emerita Resources’

Emerita Resources (EMO:TSXV) Vindicated As Tender For Past Producer Fraudulently Awarded To Competing Bidder

Posted by AGORACOM at 8:02 AM on Monday, September 21st, 2015

When Emerita Resources (EMO:TSXV) lost out on its bid to acquire the Aznall Collar mine in Spain this past February, the company suspected that something was wrong in Denmark … it turns out they were right.  In a press release issued Thursday, the company stated as follows:

“Court No. 3 Of Seville initiated an investigation into the tender process for the Aznalcollar mine has indicated that corruption may have occurred and seven government officials including the Director of Mines that have been imputed by the court in relation to prevarication charges…”

As a result, the 7 government officials will have to appear before the court in September to defend their decision.  However, this may turn out to be more of a formality, as it appears the bid definitely involved fraud and corruption according to the following excerpt:

“This investigation included the participation of the UDEF (Unidad de Delitos Economicos y Fiscales), which is the special police unit created to prosecute economic crimes such as corruption. ….. The conclusion of the UDEF’s report was that the Aznalcollar tender was fraudulently granted to Minorbis – Grupo México. The UDEF continues to investigate certain aspects of the tender process but the conclusions in its report are final.”

Following the issuance of judicial findings, there was a major outcry in the Spanish media and local social media from political opposition parties and others expressing concern about the lack of transparency of the tender process. Subsequently, the Junta de Andalusia relieved the Director of Mines of her duties.

Now here is the best part for those of you asking “What are the chances of Emerita Resources being awarded the mine?”.  According to company counsel, here is your answer:

“According to Ramon Escudero Espin, Spanish legal counsel for Emerita, “Spanish mining law states that as long as there is one bidder that has fulfilled all the requirements of the tender, the tender cannot be declared invalid and the tender must be awarded to the next qualified participant. In this case, the only remaining participant in the process is Emerita Resources.”

How big could this be for the company? You can find the details here – but here are some highlights of Aznallcollar:

  • The Aznalcóllar Project is a past producing property within the famous Iberian Pyrite Belt that
    hosted the Aznalcóllar and Los Frailes open pit zinc-lead-silver mines.
  • The focus of the project is re-development of the Los Frailes deposit which was developed in
    the mid 1990s. The historical open pit mineral resource as calculated by the previous operator
    of the mine was estimated to be 71 million tonnes grading 3.86% zinc, 2.18% lead, 0.34%
    copper and 60 ppm silver
  • Reports by the operation’s mine department and a review of the diamond drilling data for the
    mine indicate the existence of a higher grade portion of the resource that is estimated to
    contain 20 million tonnes grading 6.66% zinc, 3.87% lead, 0.29% copper and 84 ppm silver. The
    Aznalcollar and Los Frailes deposits are open for further expansion by drilling at depth, as
    historical drilling was primarily constrained to depths accessible by open pit mining
  • A qualified person as defined in National Instrument 43-101 has not done sufficient work on behalf of
    Emerita to classify the historical estimate reported above as current mineral resources or
    mineral reserves and Emerita is not treating the historical estimate as current mineral
    resources or mineral reserves.

With a market cap of just $3.8 million, Emerita could be a massive winner if this tender concludes in the favor. We should know the answer very shortly.