Silver Elephant Accused Of Illegal Mining, Loses Production As Processor Also Fails To Pay
Silver Elephant Mining (TSX: ELEF) appears to be falling apart at the seams to close out 2024. The company has indicated that it received a notice of cancellation for its Pulacayo mining production contract, which it entered into with state-owned mining company Comibol in Bolivia.
The notice is said to allege that illegal mining was taking place, leading to the cancellation. While Silver Elephant disputes this claim, no mining activities may take place in the production area until the dispute is resolved.
The contract, established in 2019 between a subsidiary of Silver Elephant and Comibol, provided the company with the exclusive right to develop and mine certain Comibol concessions in the Pulacayo and Paca areas for a 30 year term. The firms only production comes from these concessions, with the company in November reporting 24,153 tonnes of material was processed, which contained silver at an average grade of 197 g/t. Since the operation began in October 2023, 261,530 tonnes have been processed at an average grade of 183 g/t, resulting in 1.44 million ounces of silver being produced.
Those wet tonnes were shipped to Andean Precious Metals Corp (TSXV: APM), who processed the silver-bearing oxide materials. Silver Elephant noted in November that at the current silver price and production run-rate, it expected to receive US$2.5 million before January 31, enabling Silver Elephant to remain debt-free.
That agreement however has also now been terminated, with Silver Elephant this morning indicating that it has cancelled both a management services agreement and a related sale and purchase of Paca materials agreement following Andean’s failure to make expected payments. A US$1.0 million payment was reportedly due on December 18, the cure period for which has now lapsed.
Silver Elephant has indicated it is “preparing appropriate steps” to collect payment.
Silver Elephant last traded at $0.37 on the TSX.
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As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.
