Sierra Metals (TSX:SMT, Stock Forum) has been locked up in Mexican courts over an option agreement concerning the San Jose properties, located in Chihuahua, Mexico, since late 2009 when the company was sued by Polo y Ron Minerals S.A. de C.V. (“P&R”) (then known as Dia Bras Exploration Inc.). The company vigorously defended itself, stating the P&R's claim bore no merit.
According to the news release, the 8th Civil Court of the Judicial District of Morelos ruled in favor of the company in 2011, absolving it from P&R's claims, stating P&R had failed to provide evidence in support of its allegations.
Unfortunately P&R appealed that resolution in State Court and won its appeal on March 16, 2013 with the State Court ordering Sierra to transfer 17 mining concessions to P&R and to pay P&R US$422,674 in damages.
Sierra went on to appeal that resolution in the Federal Court in the State of Chihuahua, receiving a favorable ruling today that temporarily suspends the 2013 adverse ruling pending the writ of amparo.
The writ will be heard by the Federal Court and will challenge the previous State Court resolution. The Federal Court's verdict will be final and non-appealable.
The release went on to note that the San Jose properties are not included in any resource estimates of the company.
Sierra was in the news recently when the Vancouver-based company's South American subsidiary released Q2 2014 financial results yesterday.
Currently there are 159.5m outstanding shares with a market cap of $287.2 million.
FULL DISCLOSURE: Sierra Metals is a Stockhouse Publishing client.