Win us with honest trifles

Fortuna Silver (FSM) (FVI.to) and the IKN First Law of Mining NRs

Your reminder of the Law:

“The IKN First Law of Mining News Releases: Considering that anything contained in a mining news release is presented in the best possible way for the company in question, any piece of information contained in a NR that comes across in any way negative means the real news and/or events behind it must be very, very bad indeed.”

And now, FSM’s news from this morning:

Vancouver, November 19, 2021 – Fortuna Silver Mines Inc. (NYSE: FSM) (TSX: FVI) is providing an update on the status of the appeal to the denial order (the “Denial Order”) received on November 10, 2021 from the Secretaría de Medio Ambiente y Recursos Naturales (“SEMARNAT”) with respect to the application to extend the environmental impact authorization (“EIA”) at the San Jose Mine, located in Oaxaca, Mexico.

Fortuna’s Mexican subsidiary, Companía Minera Cuzcatlán (“Minera Cuzcatlan”) is working with its legal advisors to file an appeal to the Denial Order prior to the end of November 2021. The appeal will be brought by Minera Cuzcatlan in the Mexican courts.

The grounds for the appeal are that Minera Cuzcatlan is in full compliance with all material environmental laws, and therefore Minera Cuzcatlan has the right to an extension of the EIA under applicable law.  The timing for a decision by the Administrative Court is uncertain, and Fortuna has been advised that such decisions may often take up to a year to be delivered.

The San Jose mine is currently operating under the protection of the Mexican courts which allows the continued operation of the San Jose mine beyond the expiry date of the EIA (refer to Fortuna news release dated October 25, 2021). Under the terms of the Company’s credit facility (refer to Fortuna news release dated November 11, 2021), the Company is required to obtain a permanent injunction or equivalent protection, in form and substance acceptable to the lenders acting reasonably, by November 20, 2021 to allow the Company to continue to operate the San Jose mine from October 23, 2021.  The lenders under the credit facility have agreed to waive that requirement until February 18, 2022, provided such permanent injunction or equivalent protection has not been lifted or stayed prior thereto.

The Company believes that it is fundamentally in compliance with all material aspects of the EIA and is entitled to an extension. The Company is continuing to work with authorities to resolve this matter.    Minera Cuzcatlan is continuing to pursue all legal protection available to it in order to continue to operate pending the appeal of the Denial Order.  

Soooooooo, apparently FSM tells us they are in full compliance with Mexico law despite the fact they have never run a prior consultancy and the law states they must. The Mexican SEMARNAT people, and now also the larger government, points to the country’s laws and says differently. The company’s bankers have given them a three month time limit to get an injunction and the larger black cloud now has timeline of roughly one year, basically all 2022. And that is the absolute best spin FSM managed to put on this story that nobody knew about until last week, because the company kept hermetically silent about their impending disaster.

Nobody except readers of The IKN Weekly, anyway. Enjoy the weekend, Jorge.


    I knew you were going to recommend this one 🙂


    These are pretexts. No one enforced a “consultancy” (whatever that means) for a decade, and now suddenly it’s so important! Please. This is an excuse to shut it down and probably give it to a friend of AMLO. Mexico pretended to be a serious country for awhile there, but it’s just another Latin tire fire.


      When are you going to realize that bias confirmation is expensive?

      Please feel free to correct me if I’m wrong, but I feel your attitude is, “Tell me the FVI side of the story…oh yes, I like that. Don’t tell me the SEMARNAT or local protesters’ side of the story, I don’t like that. Wait! That IKN guy is writing things I don’t like! Must comment quickly! Lahlahlah, I can’t hear you! Must refute with the things I like.” You’ve now shown up twice in the last 24 hours, in two separate posts on Fortuna Silver, doing the same thing, and it’s getting a little tedious this end.

      You don’t live in Mexico, you don’t speak Spanish, your only views are parrotted from people of the same ilk, your only real connection to this mess is via your back pocket. Though there’s also a bit of an ego thing in play as well.

      Can you admit that I called this situation better than you, your video pal Dave K, the IR desk at FVI? And did so to my paying subscribers several days before the fecal matter hit the ventilator? Are you capable of getting off that high horse and considering the reality this weekend? If you are, you’ll surely profit from this trade. Not necessarily via FVI, but in the valuable lessons you learn for your next trade.


        By the way, if you want to change the subject and talk about my bad trades, we can do that. I’ve made dozens of bad ones over the years, perhaps hundreds, but for some reason a lot of people still pay me for my views on mining stocks and I get tens of thousands of eyeballs on the blog.

        Confused? You won’t be, after the next episode of…Soap!


      What does “enforced” mean? These consultancies have been held for several years, usually after the mining firms intimdate, bribe, or murder opposition leaders. Don’t you pay any attention to the media (even the pro mining media) in the target country?


    To be fair, FVI did put a release out 10/25, more than two weeks before 11/11 announcement of denial, stating that they had not received a renewal by the date that the original permit had expired; that they had obtained a provisional injunction to continue operations; and that they had initiated legal proceedings to protest the lack of response. The market ignored it.


      Ok Adrian, we can do this. First let’s consider the style of that NR, published 5 minutes before the 3q21 heasdsup NR (lucky timing) and using phrases such as “… the administrative process has become more cumbersome and is taking longer than in the past.” Not lying to us, I will certainly grant you that. But the IKN First Law is definitely on show already.

      But in the same NR comes “SEMARNAT requested additional information pertaining to the application which has been provided.” FVI decided to give them information dating back to 2019, turns out the enviro-hatemob wanted records back to 2011, including the results of the public consultancy they should have run at the time (again according to SEMARNAT; don’t start shooting el mensajero, caballero). We know that now, it’s also reasonable to assume FVI wasn’t telling us everything on October 25th. However, they were definitely telling their union boss how bad it was, because on October 26th workers from FVI were in the streets of the regional capital, demanding the permit immediately and threatening to spill blood (that’s on record) if it wasn’t signed off.

      Have a great week.


    […] the company’s predicament has become. As a result, FSM was featured on the blog Friday afternoon (11) and, while the house comment was “bloggy” (let’s say) instead of The IKN Weekly’s style, […]


    […] the worst car-crash conference calls on record and four days before the company’s own “First Law of NRs” admission about the depth of issues at its San José mine in […]


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