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First Majestic Provides Update On SAT Tax Dispute - Quick Facts

Mining company First Majestic Silver Corp. (AG,FR.TO) announced Friday an update related to the ongoing tax dispute with the Mexican tax authority, the Servicio de Administracion Tributaria (SAT) in connection with the 2012 Advance Pricing Agreement (APA) granted to Primero Empresa Minera, S.A. de C.V., a subsidiary of the Company.

As previously announced on May 13, 2020, the Company served the Government of Mexico with a Notice of Intent to Submit a Claim under the provisions of Chapter 11 of North American Free Trade Agreement (NAFTA). The government has not responded to resolve the tax dispute even after the 90-day process deadline expired.

Its Mexican legal advisors informed that Primero will be served with a decision made by the Federal Court on Administrative Matters, nullifying the APA granted to Primero and directing the tax authority to re-examine the evidence and basis for the issuance of the APA. The Federal Court decision is appealable to the Circuit Courts.

The Company's legal advisors are of the view that the Federal Court's decision was not arrived following regular procedures, was undertaken hastily, and did not provide opportunity for the presentation of evidence from Primero.

In addition, the decision is inconsistent with previous legal precedents and violates the Federal Mexican Constitution. The Company continues to assess all of its legal options, both domestic and international including under the NAFTA.

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