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Silver Elephant Mining (TSX:ELEF,OTCQB:SILEF) has announced plans to appeal the termination of its Pulacayo mining production contract (MPC) by Bolivia’s state-owned mining authority.
The company received a notice of cancelation on Tuesday (December 31) from Corporacion Minera de Bolivia (Comibol), which says the MPC was revoked due to alleged illegal mining activities within the contract area.
Silver Elephant maintains that its operations have been fully compliant with Bolivian regulations and that all required authorizations for mining activities in the Pulacayo area were properly secured.
The company has also denied knowledge of any unauthorized third-party mining activities within the MPC area.
The Pulacayo MPC was originally signed on October 3, 2019, and it granted Silver Elephant’s Bolivian subsidiary the right to explore and mine select Comibol concessions in Pulacayo and Paca for up to 30 years. The agreement remained subject to ratification by Bolivia’s congress, a requirement for formalizing mining production contracts in the country.
Despite the setback, Silver Elephant said in Tuesday’s press release that the notice from Comibol will not affect its Apuradita mining concession, which lies adjacent to the Paca concessions.
Apuradita is directly registered under the company’s Bolivian subsidiary and does not fall under Comibol’s jurisdiction. Development activities, including tunnel construction targeting silver sulfide deposits, are currently ongoing at the site.
Comibol, which operates under Bolivia’s Ministry of Mining and Metallurgy, oversees about 163 mining concessions.
In response to the contract termination, Silver Elephant said it plans to pursue an appeal under Bolivian law and in accordance with the dispute resolution mechanisms outlined in the MPC.
Until the dispute is resolved, mining operations within the MPC area are suspended.
The company also emphasized its longstanding engagement with local communities in Pulacayo and Paca, describing its community relations as a critical component of its decade-long presence in Bolivia.
Silver Elephant acquired Pulacayo, which was previously owned by Apogee Silver, in 2016. The project is estimated to contain a silver resource of approximately 100 million ounces, making it a key asset for the company.
The company has not provided a timeline for the appeal process, but indicated that it will continue to update stakeholders as the situation develops.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.