Canadian mining company Excellon Resources, Inc. provoked the break-up of negotiations with the Ejido La Sierrita and threatened to violate the land rental contract by returning the rented land to the Ejido

The Company's threat puts at risk access to important mineral deposits for production at the La Platosa mine.

GÓMEZ PALACIO, DURANGO, July 27, 2012 /CNW/ - The Canadian mining company Excellon Resources, Inc. provoked the break-up of negotiations with the Ejido La Sierrita and demanded the lifting of the peaceful camp that the communal landowners of the Ejido La Sierrita have made outside the La Platosa mine.

The Canadian company demanded that the protest end before the company would comply with the agreement, denying any relationship of equity and justice that it tried to create with the Ejido and continuing to violate their right to their land and territory.

Excellon was represented at a July 26 meeting primarily by Canadian Executive Vice-President Brendan Cahill without any legal representation. Mr. Cahill started his new position as Vice-President on Monday of this week. The Ejido was represented by its Negotiating Committee, approved by its governing body, the General Assembly. The government of Durango arrived to the meeting represented by Arturo Yañez Cuellar, Labor Secretary, and Eduardo Silva Olivo, Technical Secretary of the Subsecretary of Government in "La Laguna", Francisco Arroyo, General Subsecretary of Goverment and Emanuel Salvador, Particular Secretary of the Secretary of Government of Durango.

In the meeting, Mr. Cahill told the landowners that in order for the Company to negotiate, the community would have to lift the peaceful camp that their families have maintained outside the La Platosa mine since July 8.

The Company was unwilling to resolve the underlying conflict caused by its non-compliance and systematic violation of the contract. On the contrary, Mr. Cahill failed to recognize the efforts by the landowners to advance negotiations with the company since November of 2011. Since that time, the Company has toyed with the trust of the Ejido members and treated the social development clauses in the contract as favours. These include, among others, a concession for mineral transportation, a concession for food services, and the promise to build a water treatment plant.

The Ejido, on the other hand, tried to meet the Company in the middle. The Ejido offered to work with the company to lift the peaceful protest based on the progress of negotiations in the next several days. The Company did not reciprocate with any change in its position.

"Around 3 p.m., the government asked for two minutes to see if they could talk with Mr. Cahill to be more flexible with the Company's position. After a half an hour, the government returned to the table with Mr. Cahill and seven workers of the mine who are members of the Union led by Carlos Pavón and who have expressed their opposition with the Ejido," said Mr. David Espinoza, president of the General Assembly of the Ejido La Sierrita.

"The government informed the Ejido, without asking for permission, that these seven workers would attend the rest of the negotiation. Mr. Cahill then abruptly told us that, as he had said throughout the previous four hours, he would not negotiate while the blockade continued and stated that if they could not negotiate, the Company would hand over 50 per cent of the rented land and turn over the other 50 per cent of the rented land within the next year."

Given the presence of the uninvited workers and the threatening posture of both the government and the Company, the negotiation committee of the Ejido calmly left the meeting.

"After four hours of negotiations in which we weren't even able to start negotiating the first clause of the contract, the presence of third-party workers and the unwavering stance of the Company forced us to leave the facility. Outside, we found another 20 members of the Pavón Union and quickly left the premises," said Daniel Pacheco, a landowner of the Ejido La Sierrita.

According to participants, the government supported the Company during the process.

"During the meeting, the representatives of the Durango state government obviously supported the company. For example, representatives met several times with Mr. Cahill alone throughout the day," said Mr. Espinoza.

"Mr. Cahill's threat to return only 50 per cent of the rented land now and the other 50 per cent within the next year does not appear to have any legal foundation. What is clear is that the Company's violation of the contract is grounds for full rescission of the contract by the Ejido. The Ejido will now analyze the possibility of rescission of the contract because they prefer to terminate their relationship with the company rather than continue going through motions with the government's mediation which puts the interest of foreign investment ahead of the rights of us landowners." said Alejandra Ancheita, Executive Director of ProDESC and advisor to the Ejido.

The posture of the company puts at risk the entire risk of the La Platosa mine. As Excellon published in its press release of July 9, its most promising exploration sites are located in the so-called "Rincón de Caído," which is located on the rented lands of the Ejido.

"If they return 50 per cent of our land tomorrow, we would be happy to ensure that our returned land is located directly in that area because we know that another company will arrive that understands that they cannot run over our rights as landowners," concluded Daniel Pacheco, landowner of the Ejido La Sierrita.

Background:

In 2008, after three months of conflict between the company and the landowners, the two sides signed a new land rental contract that included significant progress. The contract also included clauses in which the company committed to contribute to development projects for the Ejido La Sierrita and to improve the quality of community life.

However, in the last four years the company has failed to comply with and has even violated the terms of this agreement. The landowners have tried without succeses since November 2011 to sit down with company representatives and review violations of the land rental contract to resolve the conflict.

"The landowners were forced to start this protest after nearly eight months of attempts at dialogue with Excellon to solve various breaches and violations of the land rental agreement the company signed with us in 2008," said Daniel Pacheco, a member of Ejido La Sierrita.

"It is unfortunate that a company that earned $30 million in gross revenue in a year, much of it from La Platosa mine, cannot meet the minimum commitments to support the development of our community," he said.

The General Assembly of Ejido La Sierrita, after exhausting all efforts for dialogue and due to the unwillingness of the company to work with the Ejido, decided to exercise its legitimate right to protest peacefully against the company's operations at La Platosa mine. The Ejido La Sierrita is confident that the company will comply with the terms of the land rental contract, including its obligation to build a water treatment plant for the mine's wastewater, to grant concessions for the transport of minerals and food services within the mine, and to make rent payments, among others.

SOURCE: Project on Economic, Social and Cultural Rights (ProDESC)

For further information:

Alejandra Ancheita, ProDESC (Proyecto de Derechos Humanos, Económicos, Sociales y Culturales), (Tel.) +55-5212-2230, +55-5212-2229, +55-3334-6045, alejandra@prodesc.org.mx.

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Project on Economic, Social and Cultural Rights (ProDESC)

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