TORONTO (miningweekly.com) – The British Columbia Court of Appeal has dismissed the appeal by First Majestic Silver former employee Hector Davila Santos and Minerales y Minas Mexicana (MMM), the Mexico-focused precious metals miner reported on Thursday.

On April 24, the Supreme Court of British Columbia ruled in favour of First Majestic after lengthy litigation against Santos and Minera Arroyo Del Agua, which subsequently became MMM, and awarded it $93.84-million.

In November 2007, First Majestic and its subsidiary First Silver Reserve (FSR) started an action against Davila, the previous director, president and CEO of FSR, alleging, among other things, that while Davila held the company positions, he violated his fiduciary duty to FSR and that subsequently, through Minera Arroyo, he acquired the Bolanos mine from Grupo Mexico for his own personal interest.

FSR became a wholly owned subsidiary of First Majestic in September 2006.

Justice Myers concluded that the Bolanos opportunity belonged to FSR and that Davila did in fact breach his fiduciary duty by acquiring the mine.

Santos and MMM appealed the judgment.

First Majestic in June received C$14.85-million as partial payment of the judgment.

On June 27, the Court of Appeal ordered Davila and MMM to post security or provide a letter of credit in the amount of $79-million by September 25, which they failed to do and, as a result, under the terms of the June 27 ruling, First Majestic and FSR had applied to dismiss the appeal.

Further, the Supreme Court has granted orders restricting any transfer or encumbrance of the Bolanos mine by Davila or MMM and limiting mining at the mine. The orders also required that Davila and MMM preserve net cash flow from the Bolaos mine in a holding account and periodically provide to the company certain information regarding the Bolanos mine and the holding account.

First Majestic received the Court of Appeal's reasons for judgment dismissing Davila and MMM appeal on Wednesday. Davila and MMM now have seven days in which to initiate an application to vary or discharge the dismissal order.

The company warned, however, that judgment against Davila and MMM should not be regarded as final until such time as all avenues for appeal had been exhausted, adding that even if the results of all such appeals were in the company's favour it might need to take action in Mexico and/or Canada to try to recover the unpaid portion of the judgment.