Fresnillo facing possible $630m bill in gold dispute - report

(Sharecast News) - Gold and silver miner Fresnillo could have to pay out $630m to a Mexican community in a long-running mining dispute, it was reported on Thursday. According to The Times, an independent review settled on the sum in January, although Fresnillo - which is disputing the amount - has yet to detail the report's findings in shareholder disclosures.

The blue chip halted operations at the Soledad-Dipolos open-pit gold mine in 2013, when a court ordered it to vacate the area in Sonora, north west Mexico.

It ruled that Fresnillo had illegally mined for gold on land that belonged to a local community, and that the gold should either be returned or the value of it paid to the people who live in the area.

The review was commissioned to establish the value of the mined gold.

According to The Times, the report has concluded that the land was granted to an agrarian community called El Bajio. It also set the value of the gold at more than $630m.

The report has been seen by both the Times and investigative journalism group SourceMaterial.

Fresnillio, which has long denied accusations of any wrongdoing or illegal activities at Soledad-Dipolos, is challenging the review, however.

The Times said chief executive Octavio Alvidrez told attendees at last week's annual general meeting that the expert opinion containing the valuation was "grossly deficient in technical and legal aspects".

He also noted the report was not a court document and was instead "merely an opinion that should aid the court".

The Times added that a hearing was due to start on Thursday to discuss the settlement.

Fresnillo, which is headquartered in Mexico and listed in London, did not immediate respond to a request to comment.