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Silver Bull stops work at Sierra Mojada zinc property due to blockade

Silver Bull Resources Inc. suspended work at its Sierra Mojada zinc-silver property in Mexico due to a blockade by local miners demanding royalty and wage payments.

Sociedad Cooperativa de Exploración Minera Mineros Norteños SCL owns a 2% production royalty, capped at US$6.9 million, on two mineral licenses covering the eastern part of the project.

Silver Bull said that since 2014, it has been fighting a lawsuit by Mineros Norteños over royalty payments even though no revenue has been produced from the mining concessions. It added that the group also demanded salary payments to its members despite none of them having performed work.

Mineros Norteños recently challenged a federal appeals court ruling that upheld a previous judgment that barred the group from bringing the case. Silver Bull noted that if Mineros Norteños loses the appeal, the company will win the case.

Silver Bull said Sept. 30 that the blockade is an attempt by Mineros Norteños to force the company into making a settlement before a final court ruling is issued.

The company is working with authorities to resolve the situation and said it is committed to a dialogue with Mineros Norteños. Major Drilling De Mexico SA de CV agreed to not charge a standby fee during the suspension.

In June 2018, Silver Bull granted South32 Ltd. an option to acquire a 70% stake in Sierra Mojada for US$100 million.