In addition, while not formally the basis for SEMARNAT's dismissal, SEMARNAT communicated what it believes are additional issues with the Company's CUSF application, which SEMARNAT stated it was not able to resolve due to a lack of information, including:
- SEMARNAT's refusal to recognize the validity of the Temporary Occupation Permits granted to MPA by the Mexican General Direction of Mines, which are a pre-requisite to filing for a CUSF, on the basis that the project is located in an environmentally protected area over which the Mexican General Direction of Mines does not have jurisdiction;
- The National Commission for Biodiversity objects to the project on environmental grounds; and
- MPA's failure to obtain an official communication from the Mexican Natural Protected Areas Commission ("CONANP") acknowledging CONANP's conformity with MPA's application for the CUSF.
While the Company believes these comments are without legal merit and that several of the comments are beyond the scope of SEMARNAT's legal authority in connection with a review of a CUSF application, the Company expects the dismissal of the CUSF application will delay the commencement of construction, development and production of the Paredones Project. In addition to re-filing its CUSF application, the Company is working with its legal counsel and political experts in Mexico on a broader strategy for the advancement of the permitting process for the Paredones Project. This includes a potential court challenge to SEMARNAT's dismissal of the CUSF application as the Company's advisors believe the legal basis for the dismissal was incorrect. The Company will continue to provide information and updates as they become available.