Take physic, pomp

The funny thing about this First Majestic (AG) (FR.to) news today…

…is how it’s suddenly pretty important to the company. Here’s the NR and I’ve stuck the whole thing at the end of this post for reference purposes, but the matter to consider is this:
When the judgement originally came down, favouring First Majestic (FR.to) (AG) and going against Hector Davila, the market gave a small shrug and just carried on without giving FR.to much credit. That’s because on April 24th 2013 FR.to was a CAD$12.37 stock, the market cap was CAD$1.445Bn (with a B) and the CAD$96.3m awarded represented just 6.7% of the FR.to market cap, as well as probably realizing that there would be a whole long appeals process to go through as well.

But now, even with CAD$14.9m of the judgement banked, the CAD$81m that’s left to be collected by FR.to is important cash for the company because FR.to is now a mere CAD$4.90 share price and the award, if collected tomorrow (and that appeal has just been thrown out by the Supreme Court so where is Davila going next, The Hague?), would represent 14.1% of its current CAD$575.91m market cap. Or if you like, it’s 69c/share on a sub-$5 share price. It also compares to the U$37.23m it has in cash treasury as at its last quarterly filing….or if you prefer, FR collects and triples its treasury overnight.

Finally, note that FR.to has not accrued any of the outstanding CAD$81m to its financials yet (see note 25 of the 3q14 financials, if you care enough) so the day that cash arrives it’ll be a plop! oh look! big money from nowhere! moment. Anyway, here’s the NR. Beats me why this didn’t move the stock more significantly than the silver producer average today, seems to have been totally overlooked.


VANCOUVERDec. 1, 2014 /CNW/ – FIRST MAJESTIC SILVER CORP. (AG: NYSE; FR: TSX) (the “Company” or “First Majestic”) is pleased to announce that the Supreme Court of Canada has dismissed the leave to appeal application by Hector Davila Santos (“Davila Santos”) and Minerales y Minas Mexicanas, S.A. de C.V. (“MMM”) against the Company.
As previously announced, on April 24, 2013 the Supreme Court of British Columbia awarded judgment of CDN$96.3 million (USD $85.0 million) in favour of First Majestic in the litigation against Davila Santos and MMM. The subsequent appeal of this judgment by Davila Santos and MMM was dismissed on June 5, 2014 by the British Columbia Court of Appeal for failure by Davila Santos and MMM to comply with a court order.
On June 27, 2014Davila Santos and MMM filed an application for leave to appeal to the Supreme Court of Canada. On November 27, 2014, the Supreme Court of Canada dismissed their application. 
Other than the funds of CDN$14.9 million previously obtained by the Company, the Company has not received any payment of the trial judgment, leaving the amount of approximately CDN$81.0 million (USD$71.5 million) unpaid. The Company cautions that it may have to take additional legal actions to try to recover this amount. The outcome of any such proceedings is not presently determinable.
Dollar amounts referred to in judgments are stated in Canadian dollars and the U.S. dollar equivalents are based on the current exchange rate and subject to change due to currency exchange rate fluctuations, including changes to U.S. dollar equivalents previously reported.
First Majestic is a mining company focused on silver production in México and is aggressively pursuing the development of its existing mineral property assets and the pursuit through acquisition of additional mineral assets which contribute to the Company achieving its corporate growth objectives.

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