COEUR d’ALENE – A Mexican mining company is seeking a multi-million dollar judgment against Coeur d’Alene Mines Corporation as compensation for the Idaho company’s alleged breach of contract, according to a lawsuit filed in a Mexican court.

Constructora de Carreteras MYGSA S.A. De C.V. alleges that Coeur d’Alene Mines has been unresponsive to claims that the company failed to pay for rock fragmentation work performed in Chihuahua, Mexico, as part of an eight-year contract between the two companies.

MYGSA, which purchased approximately $3 million in specialized equipment specifically for the job, is pushing for a resolution in absence of a response from Coeur d’Alene Mines. The case has been pending for more than a year and a half in the Eighth Civil Court of the Judicial District of Morelos in Chihuahua, Chihuahua.

“We provided services to Coeur d’Alene Mines according to our agreement and are asking to be compensated per the terms of our mutually agreed upon legal contract,” said Mario A. Rodriguez Morales of MYGSA. “Unfortunately, we have had to request assistance from the courts in resolving in a timely manner what was clearly spelled out by the terms of the contract.”

MYGSA is seeking more than $25 million in compensation.

Coeur issued a response Friday.

“There is an outstanding legal matter in Mexico regarding a claim made by MYGSA in late 2010 regarding work performed at the Palmarejo silver-gold mine in Chihuauhua, Mexico,” the release said. “We maintain that this claim has no merit and we will continue to vigorously pursue the matter in the Mexican courts.”

Coeur d’Alene Mines has missed several deadlines established by Eighth Civil Court Judge Jose Humberto Rodelo Garcia, including one earlier this month related to subpoenas requesting responses from company executives, according to MYGSA.

Several senior Coeur d’Alene Mines officials were subpoenaed, including President and CEO Mitchell J. Krebs, K. Leon Hardy, senior vice president and COO, and Donald J. Birak, senior vice president of exploration, Kelli Kast and Dennis E. Wheeler. None have responded, according to court documents.

Coeur d’Alene Mines planned to use the crushed rock by MYGSA as underground backfill at Palmarejo Mine, but has not paid for services provided or fulfilled its responsibilities under the contract signed in 2009, MYGSA alleges.

Palmarejo Mine, a silver and gold mine, is the company’s largest contributor of sales and operating cash flow, according to a description on the Coeur d’Alene Mines website. It produced $513 million in total metal sales in 2011, or about half of the company’s total metal sales.


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