(Adds quote from statement, share price)
MEXICO CITY, Feb 2 (Reuters) - Canada’s First Majestic Silver Corp will pursue all legal avenues, including those under international law, in a prolonged dispute with Mexico over taxes, unless it can reach an amicable settlement with authorities, the company said.
Mexico has calculated that First Majestic owes 11 billion pesos ($544 million) in delinquent taxes, sources told Reuters in a story published on Monday.
“First Majestic continues to amicably resolve its differences with the government of Mexico,” the company said in a statement to Reuters late on Monday.
But if a “mutually satisfactory” solution is not reached, First Majestic said it will “continue to pursue all legal avenues available under Mexican law and international law.”
The precious metal miner is in the crosshairs of the local tax authority for an arrangement that involved silver pricing and dating back to 2010.
Mexico is the world’s largest silver producer, responsible for nearly a quarter of global output, with production of about 6,300 tonnes in 2019, according to the U.S. Geological Survey.
Many Canadian miners operate in the country.
Under President Andres Manuel Lopez Obrador, who pledged not to introduce new tax hikes in his first three years in office, officials have threatened criminal charges and even possible jail time if companies with outstanding bills do not pay up.
Mexico’s tax authority has to date sought 5.5 billion pesos in back taxes from First Majestic, with the remaining half yet to enter into formal dispute, sources with knowledge of the case told Reuters.
First Majestic declined to comment on the size of the government’s claim, saying the company would not “be drawn into a debate” in public on matters it argues should be private.
“First Majestic maintains a policy of not commenting on the details of ongoing legal proceedings and will respect the confidential nature of its settlement discussions,” it said in its statement.
The government is also aiming to criminally prosecute First Majestic’s local unit, Primero Empresa Minera, for fraud related to the pricing arrangement, even after a judge held off on filing charges last week, the sources said.
In May, First Majestic said it had notified Mexico of its intent to file a claim relating to the tax dispute with a trade dispute settlement panel.
Shares of Toronto-listed First Majestic were down more than 21% on Tuesday, trading at C$22.36. ($1 = 20.2200 Mexican pesos) (Reporting by David Alire Garcia; Additional reporting by Daina Beth Solomon; Editing by Frank Jack Daniel, Bernadette Baum and Jonathan Oatis)