The share price of European exploration and project development company Emerita Resources rose sharply on the TSX-V on Friday, following a favourable ruling in the Aznalcóllar project appeal, in Spain.
Five judges of the Appellate Court of Seville have unanimously ruled in favour of Emerita’s appeal of the lower court’s decision to dismiss a criminal case against the Andalusian government panel responsible for awarding the Aznalcóllar project and the former Director of Mines of Andalucía.
The project was the subject of a multistage public tender process that the Appellate Court has concluded, based on a police investigation, was wrongfully awarded to Minorbis-Grupo Mexico.
Emerita explained that under Spanish law, bidders were disqualified if a crime was committed in the awarding of a public tender. In the case of the project, Emerita was the only qualified bidder.
The company said that the Appellate Court ruled that Minorbis-GM was in breach of the requirements of the first phase of the tender, for various reasons, such that its bid should have been disqualified and not allowed to proceed to the next phase. The panel committed an illegal act in allowing the incomplete bid to proceed to subsequent steps in the process.
Emerita also said that the court referred to facts as “patent illegality” and “gross and crude illegality”, in that Minorbis was nothing more than an instrument for delivering the project to a third party for financial consideration, in a manner contrary to the law.
Further, the court indicated there was evidence of not only the crime of prevarication, but that of influence peddling, fraud, bribery and embezzlement.
The Appellate Court had ordered that the lower court reconsidered and investigate the claims against the accused, and that the lower court investigated certain representatives of Minorbis-GM.
This is the second time that the Appellate Court had ordered the lower court to reopen its investigation.
The government of Andalusia and the province of Seville in 2014 announced the public tender for the past producing property in the Iberian Pyrite Belt that hosted the Aznalcóllar and Los Frailes openpit zinc/lead/silver mines.
The focus of the project is the redevelopment of the Los Frailes deposit, which was developed in the mid-1990s. The historical estimate as calculated by the previous operator of the mine was estimated to be 71-million tonnes grading 3.86% zinc, 2.18% lead, 0.34% copper and 60 ppm silver.
Reports by the operation’s mine department and a review of the diamond drilling data for the mine indicate the existence of a higher-grade portion of the historical estimate that was estimated by the previous operator to contain 20-million tonnes, grading 6.66% zinc, 3.87% lead, 0.29% copper and 84 ppm silver.
The Aznalcóllar and Los Frailes deposits are open for further expansion by drilling at depth, as historical drilling was primarily constrained to depths accessible by openpit mining.
Emerita president Joaquin Merino said that his team had a great deal of experience with deposits similar to the Aznalcóllar deposits, including successful mine developments in the Matagami and Bathurst mining camps in Canada.
“We have a strong technical team that put together an excellent proposal incorporating the most innovative technology and processes available to the industry globally. The company paid close attention to the technical aspects but more importantly also the social and environmental aspects of the project. Emerita’s team is confident that Aznalcóllar can be developed in a responsible manner that benefits all stakeholders.”
Shares in Emeritus closed 42% higher on Friday at C$0.10 a share.