Emerita not to appeal criminal trial

Executive Summary

• Emerita Resources Corp. has decided to petition the Administrative Court of Andalucia to issue a final ruling regarding alleged irregularities in the awarding of the Aznalcollar public tender, rather than appealing the recent criminal trial ruling.
• The company will not pursue an appeal of the criminal case, as legal counsel believes the administrative route is the most effective path to securing the development rights for the Aznalcollar project.
• Emerita alleges significant procedural errors in the tender process, including the ineligibility of the winning consortium (Minorbis), non-compliant bids, incorrect scoring, and the illegal substitution of the winning entity with Minera Los Frailes.

Key Details

• Legal Strategy Shift: Emerita is petitioning the Administrative Court of Andalucia (Seccion Primera Sala de lo Contencioso-Administrativo del Tribunal Superior de Justicia de Andalucia) to complete its ruling on the Aznalcollar public tender dispute.
• Criminal Appeal Forgone: The company will not appeal the recent criminal trial ruling. Legal counsel determined that appealing to the Supreme Court would only address technicalities, is unlikely to change the sentencing, and would delay the administrative court resolution by 18 to 24 months.
• Timeline: There is no firm estimate for the administrative court's resolution, but counsel suggests a timeline of two to three months based on past experience.
• Alleged Tender Irregularities: The complaint filed with the administrative court cites rulings from Provincial Court No. 7 of Seville supporting the following errors:
  • The Minorbis consortium failed to meet the requirements for the first stage of the public tender and was ineligible for subsequent stages.
  • The Minorbis bid was incomplete, non-compliant, and failed to meet defined tender criteria.
  • Scoring and evaluation criteria were potentially interpreted and applied incorrectly.
  • The concession was accepted by Minera Los Frailes, an entity that did not participate in the tender, instead of the bidding entity Minorbis-Grupo Mexico. This substitution allegedly violates Spanish administrative and EU procurement law.
• Strategic Objective: The primary goal remains acquiring the rights to develop the Aznalcollar project. Management believes focusing on the administrative court is the best way to achieve this, as the criminal appeal is unlikely to impact the tender award.

Notable Quotes

• "To best serve our shareholders, management believes it is important to keep the focus of the legal battle on the objective to be awarded the rights to develop the Aznalcollar project. As a result of the detailed police investigation and the body of evidence collected over the lengthy criminal trial, Spanish counsel considers that Emerita's case is very strong to demonstrate that significant administrative errors were made in awarding the public tender." — David Gower, PGeo, Chief Executive Officer