First Majestic Silver suspends tax arbitration against Mexico

First Majestic Silver has agreed in principle to settle a long-running tax dispute with the Mexican government, leading to the suspension of its international arbitration proceedings. The tribunal has issued an order to pause the case until December 31, 2026, while the parties finalize and implement a settlement framework.

The dispute involves Primero Empresa Minera (PEM), a subsidiary acquired by First Majestic in 2018, regarding tax assessments related to the San Dimas mine. The conflict originated when Mexican tax authorities disregarded a 2012 advance pricing agreement, instead reassessing taxes based on market prices rather than the specific silver stream prices previously agreed upon. These reassessments, covering the period from 2010 to 2012, involved hundreds of millions of dollars in contested credits, including penalties and interest.

First Majestic initially filed a notice of intent under NAFTA Chapter 11 in May 2020 and a formal arbitration request in March 2021. The company described recent negotiations as constructive and expressed optimism that a deal will be completed by the end of the year, signaling a shift from litigation toward direct dialogue with Mexican fiscal authorities.