Chesapeake Gold appeals against cancellation of concession in Mexico

Vancouver-based Chesapeake Gold has filed an appeal with Mexico's collegiate court against the decision of a regional chamber of the federal administrative court to uphold the cancellation of the San Vicente 3 mining concession by the general directorate of mining (DGM).

The company argues in its appeal that the chamber erroneously found that the DGM had complied with mandated cancellation procedures, violating the company’s fundamental rights, such as due process and adequate judicial protection.

Last month, the firm initiated legal proceedings against the DGM in response to the cancellation of San Vicente 3, one of 12 mineral concessions comprising the Metates project in Durango state.

The US$359mn Metates initiative covers 4,260ha, of which San Vicente 3 accounts for 700ha.

Should Chesapeake be unsuccessful in reinstating the concession, the company's current resource estimate for Metates may be affected. Likewise, the ability to develop the project as described in the Metates' preliminary economic assessment (PEA) may be “materially affected,” it said in a release.

Chesapeake previously said it remains committed to advancing the Metates project and will continue to develop its proprietary oxidative leach technology concurrently with these legal proceedings. 

“Additional activities, such as environmental baseline work and related studies in support of the pre-feasibility study, will remain a priority for the company,” it said.

Metates is 100% owned by Chesapeake and is located 175km northeast of Mazatlán in Durango state. According to the miner, it is one of the world's largest undeveloped disseminated gold and silver deposits.