EMERITA ANNOUNCES THAT THE SEVILLE COURT HAS RULED IN EMERITA’S FAVOUR WITH RESPECT TO THE AZNALCÓLLAR APPEAL
Toronto, Ontario, October 28, 2016 – Emerita Resources Corp. (the “Company” or “Emerita”) (TSX-V: EMO) is pleased to announce that the Provincial Court of Seville, an appellate court, has ruled in favour of Emerita in its appeal of the lower court’s decision that there was not sufficient evidence of any criminal act in the Aznalcóllar project tender process (See press release issued November 25, 2015).
The Aznalcóllar project public tender process consisted of two stages. The first stage required bidders to provide detailed corporate information and demonstrate industry expertise. The second stage required submission of a detailed plan for the development of the Aznalcóllar project. After the first stage of the public tender process was completed, the Andalucian government panel responsible for awarding the Aznalcóllar project (the “Panel”) determined that the only qualified bidders were Emerita and a group comprised of Minorbis and Grupo Mexico (“Minorbis-Grupo Mexico”).
The appeal was heard by four judges of the Provincial Court of Seville (the “Court”) who ruled unanimously in Emerita’s favour in a 59 page judgement. The judges’ decision was based on: (i) Minorbis-Grupo Mexico failing to submit the necessary documentation as required by the tender process; (ii) a failure by the Panel to consider the technical merits of the tender bids; and (iii) granting the mining rights to the Aznalcóllar project to Los Frailes Mining, a company that did not participate in the tender process, contravened applicable laws governing public tenders in Spain.
The judges found that there is evidence of gross negligence and misconduct and indicated that there may be evidence of possible corruption and prevarication. As such, the Court has ordered the criminal case to be reopened against the Panel.
Emerita’s Spanish legal counsel has summarized the key findings from the Court’s ruling below.
Deficiencies with the Bid by Minorbis Grupo-Mexico
The judges found that the bid submitted by Minorbis-Grupo Mexico should not have passed to the second stage of the tender process. The relationship between Minorbis and Grupo Mexico was not properly demonstrated in the documentation submitted to the Panel. Among other things, Grupo Mexico never registered in Spain or with the Spanish consulate, which was a requirement of participation in the Aznalcóllar tender. Further, Minorbis-Grupo Mexico never submitted the necessary documentation demonstrating its solvency, which was a mandatory requirement established in the tender process, as set out by the Panel. The Panel contradicted the tender requirements by declaring that the Minorbis-Grupo Mexico bid was submitted solely by Minorbis and that Grupo Mexico had just provided technical and financial support.
The Court determined that this was not possible since Minorbis had been formed just 3 weeks prior to the deadline for submission of the tender, and according to administrative law in Spain, a company participating in a public tender has to demonstrate minimum experience and track record in that particular industry.
Failure to Consider the Technical Merits of the Tender Bids
The judges concluded that the Panel had failed to consider the technical details of the tender bids. As an example, the Panel did not consider that Emerita’s bid contemplated double theinvestment compared to Minorbis-Grupo Mexico’s bid. This decision fails to consider one of the principal objectives of the tender process, promoting investment to the region and creating opportunities for the community.
Los Frailes Mining did not Participate in the Tender Process
The judges concluded that awarding the Aznalcóllar project rights to Los Frailes Mining, a company that never participated in the tender process, contravened the laws and regulations governing public tenders in Spain. Although it is not clear if it was Minorbis or Minorbis-Grupo Mexico that participated in the tender, the Aznalcóllar project was granted to Los Frailes Mining, a company that was created after the completion of the tender process.
The conclusion by the Court is that there are numerous administrative irregularities of a serious nature which occurred during both stages of the public tender process and as such the crime of “Prevarication” cannot be discounted. The judges have ordered the case reopened against the Panel. This is a firm decision by the Court which cannot be appealed.
The Court’s decision is a lengthy document written in Spanish. The Company is having it translated to English and is working with its Spanish legal advisors to fully analyze the ruling and will provide a more detailed update in the near future. The Company is also seeking advice on the legal process moving forward. The Company’s Spanish legal counsel has advised that under Spanish law, if it is found that the awarding of a tender involves the commission of a crime, the tender is automatically awarded to the next qualified bidder. In the Aznalcóllar tender, Emerita is the only qualified bidder.
The Aznalcóllar project hosts the past producing Aznalcóllar and Los Frailes zinc-lead-silver deposits. If awarded the tender, the Los Frailes deposit would be Emerita’s focus of development for restarting mining operations at the site. The local community is strongly supportive of an environmentally and socially responsible approach to developing the site.
According to Joaquin Merino, President and CEO of Emerita; “We are excited by this development. Emerita continues to maintain that its bid was superior and it should have been awarded the Aznalcóllar project pursuant to the tender process. We are fully committed to working with the Government and the community to develop the Aznalcóllar project to the highest environmental and social standards.”
About Emerita Resources Corp.
Emerita is a natural resource company engaged in the acquisition, exploration and development of mineral properties with a primary focus on exploring in Spain and Brazil. The Company’s corporate office and technical team are based in Sevilla, Spain with an administrative office in Toronto, Canada.
For further information, contact:
+34 (628) 1754 66 (Spain)
+1 416 309 4293 (Toronto)