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s.19(1) Nagy, Catherine -GNC From: Robson, Wayne -MXICO -TD Sent: 16 novembre 2012 16:12 To: ce: Subject: Cer ‘Alexandre -MXICO -TD; Hradecky, Sara -MXICO -HOMICDM; Castro, Gabriela -MXICO -TD We lock forward to continuing our work with you in the upcoming year. Wayne Rabson Senior Trade Commissioner / Délégué commercial principal Minister Counsellor / Ministre Conseiler / Ministro Consejero Embassy of Canada / Ambassade du Canada / Embgjada de Canada Schiller $29, Col, Polanco México, DF. 11540 Tet: (58)-5724-7930 Fx: (58)-5724-7982 itn 379-3350 E-mail wayne sobsonaintemationlgc.ca Excellon Resources Appoints New President Downioad POF November 18,2012 Toronto Stock Exchange - EXN TORONTO. Nov. 19, 2012 /CNWI - Excellon Resources Inc. (TSX:EXN)("Excellon” or “the Company"), Mexico's highest grade siver producers pleased to announce thatthe Board of Directors has appointed Mr. Brendan Cahil fo the position of President of the Company. Mr. Peler Crossgrove will continue in his roles as Executive Chairman and Chief Executive Ofc. Brendan has been a tremendous addition fo the Excellon team anc | am pleased to be transtioning leadership responsiblity over to him” slated Mr Crossqrove. “Excallon's high ade, low cost silver production from La Patosa provides a rare opportunty to expand our new CROISource-syle digcovery,” stated Mr. Cahill" ook forward 0 working with the great team at Excelon and further developing our already excellent relationships with the local communities of Bermejto and Mapimi that rely on La Platosa, as wel as with Mexican govecnment and business leaders" Me. Cail joined Excllon as Executive Vie President in summer 2012 and was instrumental inthe Company’ return to production following an itegal blockade that disrupted production during the thie quarter of 2012. He was previously Vice President Corporate Development of Pelangio Exploration In. a junior gold exploration company active in Ghana, West Afnca and Ontario, Canada, and served as Corporate Sacretary of Pelangio Mines Inc Dior to its merger with Detour Gold Corporation, Prior to Pelangio, he was a lawyer in the M&A and corporate securities practices at Davies Ward Philips & Vineberg LLP. At Davies, he advised on public and prvate transactions valued at over $15 billon, including Barick’s acquisition of Placer ‘Dome in 2005. He also advised on public offerings totaling over $2 bllon dollars fr various Canadian companies Mr. Cahill holds a law degree from the University of Western Ontario and an undergraduate degree from the Unversity of Toronto, 2012-12-28 ‘000001 8.15(1) - International 8.21(1)(b) FW PROTECTED A Excellon - Letter to Mexican Authorities From: Cerat, Alexandre -¥xzco ~TD Sent: August 7, 2012 10:25 aM ' To: Martin, Ginette -¥XICO ~GR; Hemingway, Shauna -MxICO -EC; Cole, Laurie: -wxico -GR : Subject: FW: PROTECTED A: ExceTlon - Letter to Mexican authorities chéres collégues, pvr. -original Message- From: Cerat, Alexandre -WXICO -TD Sent: August 6, 2012 6:30 PH To: watson, Lynda -GNC; Rousseau, Louise -GNC; Demers, Normand -GNC Cc: Robson, Wayne -MxICO -T0; McPherson, Glen’-BTA; Kavchak, Andrew -BTA; Pagé, Martial -GGA; Staruch, Dianne -GGA; Dubé, Roxanne ~GND Subject: RE: PROTECTED A: Excelion’- Letter to Mexican Authorities PROTECTED A Wi Lynda, Please find below a few lines taken from past QP notes from BTA and reports from MKICO. Hope this helps: Excellon Resources is a silver, lead, and zinc metal producer with assets in Mexico and Canada. In Mexico, Excellon operates the La Platosa mine in the state of Durango near the local community of Berneji119, Excel lon's Mexican assets also include a mi1] and an exploration project. in the state of zacatecas. The company reported cON $48 million of revenues and $4.4 million of net income for 2011. ‘On April 8th, 2011, the office of the CsR Counsellor received the first ever request under its Review Process relating to a complaint against Excel lon Resources's La platosa mine in Mexico. The request was brought by (Mexico's) National Mining Union (SNTMMSSRM) and ProDesc, a local human-rights NGO. The review was related to alleged violations of the Voluntary Principles on Security and Human Rights dealing with Excellon’s relationships with public and private security forces, as well as alleged violations of principles of the OECD Guidelines for Multinational Enterprises including those that deal with safety and labour Conditions and workers attenpting to unionize. The company opted to withdraw from ‘the Review Process in September 2011 on May 28th, 2012, the Secretariat of Canada's National Contact Point (NCP) received a request for review of the compliance of Excellon’s La Platosa operations with the OECD's Guidelines for Multinational Enterprises (the OECD Guidelines). The Tequest alleges lack of compliance regarding unionization rights and conmunity-related rights such as access to water, The request to the NCP was jointly submitted by Mexico's National mining Union (SNTHMSSRM), ProDESC, the Canadian Labour Congress, United Steelworkers, and Miningwatch Canada, In consultation with Mexican authorities, Canada's NCP advised the notifiers on June 28th that Mexico's NCP would lead on this request for review as per OECD normal guidelines and procedures. on uly 8th, 2012,,a group from the, Toca] community started an blockade Preventing on, excellon/s land thereby preventing access to the mine. The lockaders. which are being supported by Provesc, and Mexico's National Mining Union (SNTMMSSRM), allege that the company is in breach of a 2008 land access agreement. MXICO-TD has sustained numerous calls with amongst others, Page T ‘000002 '8.15(1) - International 21(1)(b) FW PROTECTED A Excellon - Letter to Mexican Authorities on August 6th, 2012, Excellon copied Post on a letter sent to senior Mexican authorities, Including President’ calderén, \(ourango's) Governor Herrera, Secretar of Interior Poiré, and Secretary of Economy Ferrari. The letter states that, in the absence of a plan'of action with clear timelines, Excellon's Board may declare Force Majeure and shut down its La Platosa mine by Tuesday August 7th. As of August 6th, Excellon's stock was down by 30% since the start of the blockade a month earlier. As per TCS guidelines, MxICO-TD has not pronounced per se on the core issue related ‘to the commercial dispute between private parties. original Message From: watson, Lynda. =GNc Sent: August’6, 2012 4:56 pM To: Cerat, Alexandre -NXICO -TD; Rousseau, Louise -GNC; Deners, Normand -GNC ci Robson, wayne -MXICO -TD; McPherson, Glen ~BTA; Kavchak, Andrew -BTA; Pagé, Martial -GGA; Staruch, Dianne -GGA; Dubé, Roxanne ~cND Subject: Re: PROTECTED A: Excellon’- Letter to Mexican Authorities Thanks. we will consult tomorrow on media lines. we would welcome a short backgrounder and suggested lines from MxICO. original Message ----- Cerat, Alexandre -WXICO -TD. Monday, August 06, 2012 04:38 PM To: watson, Lynda -GNC; "Rousseau, Louise -GNC; Demers, Normand -GNC ce: Robson, Wayne -MXICO -TD; McPherson, Glen’-BTA; Kavchak, Andrew -BTA Subject: Fw: PROTECTED A: Excellon - Letter to Mexican Authorities PROTECTED A Dear Lynda, Louise, Normand: Excellon is delivering today a letter (Spanish only) to Mexican authorities Cinc. President Calderon, Governor Herrera, Sec. Poiré, and Sec. Ferrari) stating that, short of a blockade removal by tomorrow, they may declare force majeure and shut down their operation as of tomorrow. FYI, please note that a copy of Excellon's letter was also sent to MINA (which is Best, alex ‘original message Page 2 ‘000003 .15(1) - International 8.21(1)(0) FW PROTECTED A Excellon - Letter to Mexican Authorities From: Cerat, Alexandre -MXICO -TD Sent: August 6, 2012 3:33 PM To: Hiradecky, Sara -YXICO -HOM/COM; Robson, Wayne -MXICO -TD Subject: PROTECTED A: Excellon - Letter to’Mexican Authorities Importance: High PROTECTED A Ambassador, wayne: Excellon is delivering today a letter to Mexican authorities (inc. president Calderon, Governor Herrera, Sec. Poiré, and Sec, Ferrari) stating that, short of a blockade’ removal by tomorrow, they may'declare force majeure and shut down their operation as of tomorrow. Note that a copy of Excellon's letter was also sent to minister Baird (this is news to us). Alex PS: Re-sent with Protected classification given that letter was already received on SIGNET platform. original Message Brendan Cahill [mailto:bcahi11@excellonresources .com] Sent: August 6, 2012 11:58 aM To: Cerat, Alexandre -MXxICo -TD Cc: Bishop, Dexter -MxICO -TD; Peter Crossgrove; Rob Moore Subject: Excellon - Letter to’ Mexican Authorities Alex, FYI, please find attached a letter that we are delivering today to a number of Mexican governmental authorities. We still have not received any concrete gane plan or timeframe from the authorities and need to make a decision regarding the declaration of force majeure, basically tomorrow. Federal and state authorities have both recognized the completely unreasonable demands of the €jido, the clear links between the £jido and Napoleon's union via ProDESC, and the illegality of the blockade. We have received suggestions of action but, again, no plan or timeframe, As always, we would appreciate your help. As discussed last week, we have also contacted Minister saird's office regarding the situation, and hope that he will be Contacting his counterparts in Mexico this week. Best Regards, Brendan Page 3 ‘000004 Nagy, Catherine -GNC s24(t\(a) - — — Cerat, Alexandre -MXICO -TD 29 octobre 2012 13:36 ‘Martin, Ginette -MXICO -GR; Robson, Wayne -MXICO -TD Cole, Laurie -MXICO -GR; McLaughlin, Andrew -MXICO -GR; Hemingway, Shauna -MXICO -EC; Demers, Normand -GNC; Nagy, Catherine -GNC. ‘Subject: Protected A: ProDESC & Excellon PROTECTED A Additional notes to close the loop on this latest request from ProDESC. had a msg from ‘on my voicemail and called him back upon my return to Embassy this morning Alexandre From: McLaughlin, Andrew -MXICO -GR ‘Sent: October 24, 2012 1:43 PM ‘To: Martin, Ginette -MXICO -GR; Robson, Wayne -MXICO -TD; Cerat, Alexandre -MXICO -TD Cc: Cole, Laurie -MXICO -GR ‘Subject: RE: Accién Urgente: Amenazan de muerte, queman y destruyen viviendas de ejidatario/s y trabajadores del Sindicato Nacional Minero PROTECTED A Just to provide some additional contextual info from my end: This morning | received @ somewhat frantic call from! - advising of the situation, more or less as detailed below. She did not have any specific reque: mt ‘mentioned that 'd follow up with her after discussing internally Following discussions with both Ginette and Wayne. | contacted {In my follow-up discussion with | mentioned that | had raised this issue internally, and that we had been in contact with Excelion as well. | ‘we would like to be kept apprised of further developments. She remarked that, at the time of our conversation, 2012-12-28 ‘000005, $.21(1)(b) 8.19(1) Andrew From: Cole, Laurie -MXICO -GR Sent: October 24, 2012 12:38 PM To: Martin, Ginette -MXICO -GR; Robson, Wayne -MXICO -TD; Cerat, Alexandre -MXICO -TD; McLaughlin, Andrew -MXICO - GR ‘Subject: FW: Accién Urgente: Amenazan de muerte, queman y destruyen viviendas de ejidatario/s y trabajadores del Sindicato Nacional Minero fyi Fro Sent: October 24, 2012 12:36 PM To: ProDesc ‘Subject: Acci6n Urgente: Amenazan de muerte, queman y destruyen viviendas de ejidatario/s y trabajadores del Sindicato Nacional Minero ACCION URGENTE Amenazan de muerte, queman y destruyen viviendas de ejidatarios y ejidatarias de la sierrita y trabajadores de la seccidn 309 del jindicato Nacional Minero. Plantén Pacifico La jerrita, 24 de octubre 2012. El dia de hoy alrededor de las 6:30 de la maftana llegaron 180 provocadores miembros del Sindicato Minero Metaliirgico, Siderirgico Don Napoleén Gémez Sada armados con palos y piedras al plantén pacifico que realizan ejidatarios de La Sierrita y trabajadores de la Seccién 309 del icato Nacional de Trabajadores Mineros, Metalirgicos, Sidertirgicos y Similares de la Repiblica Mexicana, Los provocadores legaron en cinco camiones de ruta suburbana y en un camién de propiedad de Excellon Resources Inc. Robert Moore, Director de Operaciones de Excellon Resources Ine, participo directamente en las acciones de violencia contra los y las ejidatarias de la Sierrita quitando el cerco de alambre que mantenian los ejidatarios para resguardar su campamento, y con el apoyo de los integrantes del Sindicato Gémez Sada, sin ser trabajadores de la empresa Excellon, abrieron el paso a maquinaria pesada, Los integrantes del Sindicato Gémez Sada con actitud agresiva inereparon a los ejidatarios y sin posibilidad de dialogo comenzaron a destruir y a quemar las viviendas de los ejidatarios. Asi mismo, parte de este grupo amenazé de muerte a los ejidatarios diciéndoles “Traemos érdenes de quitarlos a trancazos 0 con muertos, como ppas6 en Coahuila”. 2012-12-28 ‘000008 En el lugar se encontraba una patrulla de la policia municipal la cual no hizo nada para detener los hechos. En el transcurso de la mafana, legaron dos camionetas con elementos del ejército y un vehiculo de la policia federal quienes se encuentran apostados en las inmediaciones del lugar. Es importante sefialar, que el dia de ayer 23 de octubre, la policia de Mapimi amenazé a los ejidatarios de que los desalojaria este proximo jueves si no se retiraban del plantén. Los ejidatarios asi como los trabajadores mineros no cayeron en Ia provocacién y solo atestiguaron los hechos realizados por la empresa y el Sindicato Gémez Sada. Actualmente, los provocadores se encuentran cercando a los ¢jidatarios y trabajadores del Sindicato Nacional Minero sin dejarlos salir ni entrar del lugar. Este ultimo hecho de violencia es uno més de varios que se han realizado en los iltimos meses y, a pesar de que los gobiernos Federal y de Durango tienen conocimiento de la situacién no han tomado las medidas suficientes para salvaguardar la vida e integridad fisica de los ejidatarios y trabajadores, todos estos defensores de sus derechos humanos. Las acciones de represién por parte de la empresa en colusién con los gobieros federal, estatal y municipal, asi como por elementos del Ejercito, violentan el derecho de los ejidatarios y trabajadores de protesta y defensa de sus, derechos humanos establecidos en los articulos 1, 5, 6, 7, 8, 9, 11, 12 y 13 de la Declaracién sobre los defensores de los derechos humanos y el articulo 6° constitucional. Ademds del derecho de Ia tierra y el tertitorio de los ejidatarios establecido en el articulo 27 constitucional y el articulo 100 de la Ley Agraria. Asimismo, se esta violando el derecho a la libertad sindical de los trabajadores de la seccién 309 establecido en el articulo 123 fraceién XVI del apartado A constitucional. Finalmente, la empresa esta incumpliendo las Lineas Directrices de la OCDE para Empresas Multinacionales y los Principios Rectores sobre las empresas y los Derechos Humanos de la ONU. Por lo anterior, hacemos un llamado para que el gobierno mexicano cumpla su obligacion de respetar, garantizar los derechos humanos de los ejidatarios de La Sierrita, los trabajadores de la Seccién 309 y sus asesores de ProDESC para que: PETICIONES 2012-12-28 ‘000007 1. Se tomen de manera inmediata las medidas apropiadas para garantizar la seguridad e integridad fisica de los jidatarios y trabajadores que estin en el campamento pacifico en La Platosa, Durango. 2. Garantizar el derecho de los ejidatarios de La Sierrita, de los trabajadores de la seceién 309 y de sus asesores (ProDESC), como defensores de derechos humanos, a exigir legitimamente su derecho a la protesta por el incumplimiento del contrato de ocupacién temporal y derecho a la libertad sindical. 3. Retirar de manera inmediata a las personas terceras no relacionadas con el conflicto que estén poniendo en peligro a los ejidatarios de La Sierrita y trabajadores de la seccién 309 que son los verdaderos duejios de las tierras cen las que se encuentra la mina La Platosa y/o son trabajadores en activo de dicha mina. s.19(1) 2012-12-28 ‘000008 .15(1) - International Nagy, Catherine -GNC 8.20(1)(6) From: Cerat, Alexandre -MXICO -TD Sent: 18 octobre 2012 19:27 To: Robson, Wayne -MXICO -1D; Nagy, Catherine -GNC Cc: Ruston, Bettivo -MXICO -TD; O'Neil, Kim -MXICO -TD ‘Subject: RE: Commercial Disputes - We will add a few more Wayne, Catherine: Three additional (mining) disputes, for your perusal. Excellon Resources: September 2012 ‘On July 8th, 2012, a group from a local community of Bermejillo, Durango started an unlawful two-month blockade preventing access to Excellon Resources’ La Platosa mine. The blockaders, who were being supported by ProDESC, a local human-rights NGO, and Mexico's National Mining Union, alleged that Excelion was in breach of a 2008 land access agreement. The blockade was removed on September 7th. While Excellon now has regained full access to La Platosa, the Situation remains tense. Both he company andthe NGO are now proceeding wih legal chalenges against each other before Mexican courts. Alex From: Robson, Wayne -MXICO -TD Sent: October 18, 2012 3:33 PM ‘To: Nagy, Catherine -GNC Cc: Cerat, Alexandre -MXICO TD; Ruston, Betti-Jo -MXICO -TD; O'Neil, Kim -MXICO -TD ‘Subject: Commercial Disputes - We will add a few more PROTECTED A Public Controversies Involving Canadian Companies 2012-12-28 ‘000009 as Wayne 8.15(1) - International 8.20(1)(b) 8.20(1)(6) 2012-12-28 ‘000010 5.19(1) Nagy, Catherine -GNC Brendan Cahill 5 décembre 2012 15:54 Robson, Wayne -MXICO -TD erat, Alexandre -MXICO -TD; Castro, Gabriela -MXICO -TD; Subject: Re: Excellon - McMaster Thesis Thanks very much Wayne. (point taken...) On 2012-12-05, at 3:46 PM, Wayne.Robson@international ge.ca wrote: Please take a look at the following websites prior to choosing whether or not to engage. | suspect that the viewpoints of j re strongly held and unikely to change. http://wagingnonviolence.org/author/paulbocking/ hutp://www.torontothebetter.net/2tzbd-201 Imovies.html Wayne From: Brendan Cahill [mailto ‘Sent: December 5, 2012 2:00 PM To: Cerat, Alexandre -MXICO -TD; Robson, Wayne -MXICO -TD Cc: Castro, Gabriela -MXICO -TD; Peter Crossgrove ‘Subject: Re: Excellon - McMaster Thesis Just FYI - I would direct you particularly to footnote 19 on page 56 of the document, which is actually critical of the Canadian Embassy in Mexico, On 2012-12-05, at 2:57 PM, Brendan Cahill 2012-12-28 000011 Brendan Cahill President Excellon Resources Inc, E beahill@excellonresources.com W ExcellonResources com T 4163641130 C 6473006891 F 416 3646745 IMPORTANT NOTICE: This message i intended ony fo he use of hed rent Lo whic is advessed. The Inessage may consi formation hat i prvloged coninta and exempt om sosure under applica aw ifthe reader Sms message snot the mended repent, othe employee or agent responsible for celiverng the message tothe intanced ‘ecpiem, you are noted tat any dssemnaton, astrbuton, of copying of tis communal sscly probed. Ifyou hove received the conmuniation ner please rotiy Excellon medley at fo@excellnresaurces com Esta ransmsion os para uso excusivo dea persona o enidad quien est digita.y ede contener formation prvileiada © comdenca que por ey no puede ser dulgada. Por favor tenga en cvea qe cual dvulgacon.deiouCaN © Uso oe festa comuntacion a cusiuora de ss adpnts eta otalate prchiada Susie feabe pr era ete eoreo elecuOnco, poe ‘aver comonquot imodatomerte® Exeston a inte@ercalonresoures com 2012-12-28 ‘000012 PRESS RELEASE- August 31, 2012 Page 1 of 6 MacCallum, Caitlin -GNC From: Brendan Cahill [bcahill@excellonresources.com] Sent: August 31, 2012 2:56 PM To: Cerat, Alexandre -MXICO -TD; Robson, Wayne -MXICO -TD Ce: Peter Crossgrove; Rob Moore ‘Subject: Interaction ID 1-XO9AP: PRESS RELEASE- August 31, 2012 ‘Alex and Wayne, Please see the release just made from ProDESC. The inaccuracies no, les - are just astounding 2013/01/07 ‘000013 PRESS RELEASE August 31, 2012 Page 2 of 6 EXCELLON Brendan Cahill Executive Vice President Excellon Resources Inc. E beahill@excellonresources.com W ExcelionResources.com T 4163641130 C 647 3006891 F 4163646745, IMPORTANT NOTICE: This message i intended ont forthe us of he invita or entity ta which tis addressed, The message may contain 'ermaron thee prvleged. content ara exempt fom Sacosure unser aopiati nw. the fear ofthe mesnage eno he nerd recipient, brine amplayee of agent espaneie fo delivering te message ote mlended reopen ou are Noted that any deseminaton detrbtonor Sopyingal tvs commaneaton fe ily pronbted you vave ceive ta communesion n eter. esse nottyExcsion mea) st infoRexcetonresaees cam sta tranemiaon es para us exclusve dela persona o entad a gion eet ing, y puede canner infracn eivlegida @cenfidencial aus gor ley no puede sr duigda, Por tavor tanga en cionta que cuslaulr clgacan estibvaon 3 uso de esa comuricacion 0 cualquera Je shun {34 olamante prohido 8 usted feabe por oror este cored elocvonco por avo" comunigahmedatamente a Excetan 5 infogbexcelonresouroes cam Rather than negotiate in good faith with La Sierrita, Excellon defames human rights defenders and places community at risk La Platosa, Durango, August 31, 2012 ~ The Mexican government's aet of force against the families protesting outside Excellon Resources’ mine in Durango, Mexico, may be the result of previously unreported high-level lobbying in Ottawa. On August 29, approximately 100 soldiers and officers of the Mexican Army and federal and state police agencies used foree to break through the peaceful protest taking place in front of, the La Platosa mine, owned by a subsidiary of Excellon Resources, Inc. The Ejido is demanding that the Company comply with the land rental agreement signed between the two parties in 2008. Workers present at the camp are also demanding that Excellon and the government guarantee their right to freedom of association. Sinee August 23", Will Stewart of Ensight Canada has been registered as a hired lobbyist of Excellon’s new Executive Vice President, Brendan Cahill. According to the Canadian Lobby Registry, he was hired to seek “government support for Excellon Resources’ operations in Mexico.” Mr. Stewart's previous post as chief of staff of John Baird, Minister of Foreign Affairs, places him in an advantageous position to deeply influence the Harper administration on issues abroad. One source states that Mr. Stewart was recently sanctioned for illegal fundraising in 2010, Communications records for lobby activities have to be filed within 30 days. As such, it is not clear what meetings Mr. Stewart has so far requested on Excellon’s behalf. Nonetheless, his registration indicates that he was hired to lobby the Department of Foreign Affairs, the House of Commons, Natural Resources Canada, and the Prime Minister's Office, That Mexican police and army entered the La Platosa mine less than a week after Mr. Stewart's registration raises serious questions about whether Mexican authorities were responding to pressure from Canada. 2013/01/07 ‘000014 PRESS RELEA‘ + August 31, 2012 Page 3 of 6 Before last Wednesday, as stated in ProDESC’s press releases of July 26 and August 13 of this year, the Mexican government had maintained a role as mediator in the conflict at the La Platosa mine. The government, at both the state and federal levels, has assured the members of Ejido La Sierrita that it supports their right to protest and is outraged by Excellon's failure to negotiate in good faith with the community. The federal government's reversal of position and choice to send 100 police officers and soldiers to the mine comes only days after Excellon’s lobbyist was put to work on this issue. Instead of peacefully resolving the conflict, Excellon has resorted to indirect intimidation and pressure, which only ensures prolonged social upheaval in the region, Ejido and ProDESC Respond to Excellon’s Untrue Allegations At the same time as Excellon maneuvers in Ottawa to repress human rights defenders in Mexico, it continues to mislead shareholders. Excellon halted trading for an entire day on August 29, only to submit a press release defaming the Fjido La Sierrita and the Project for Economic, Social, and Cultural Rights (ProDESC), a non-profit Mexican human rights organization that has advised the Ejido since 2008. ‘The Company's allegations regarding these two parties are extremely misleading and put them at risk. In what follows, ProDESC and the Fjido provide a transparent view of themselves and their role in this fight. What is ProDESC? ProDESC is a Mexican non-profit organization that focuses on the defense of economic, social, and cultural rights. As any Spanish speaker reading its website can attest, ProDESC achieves its objectives through the use of interdisciplinary efforts that include non-judicial tacties. In other words, ProDESC does not rely solely on litigation. ProDESC focuses on broader strategies that include consulting, organizing, education, and advocacy with governmental and non-governmental actors. This is particularly important in a country such as Mexico where the judicial system often lacks impartiality in labour and agrarian matters. In no way does ProDESC condone or support illegal actions, and it has always consistently advised its partners to act accordingly. ProDESC’s funding is varied and transparent. Since its inception, ProDESC has received the majority of its funding from well-recognized philanthropic institutions including the Open Society Foundation, Ford Foundation, General Service Foundation, Fund for Global Human Rights, Umvertelein Foundation, Oak Foundation, Solidarity Center, American Jewish World Service, and Semillas A.C. This money supports ProDESC’s diverse projects. ProDESC will be posting letters of support from each of its funders on its website over the next several days. ProDESC’s staff has direct experience in human rights, labour law, colleetive bargaining, and civil transactions, It is highly trained in community development and organizing, and it has also worked with consultants to create successful community development plans not only in Durango but also in Guerrero. ProDESC staff includes alumni of prestigious universities, such as CIDE, Columbia University, Fordham University, Universidad Iberoamericana, and UNAM. One of ProDESC’s overarching goals is the defense of workers’ human right to freedom of association throughout Mexico, irrespective of union affiliation. ProDESC has been an ally of Los Mineros since 2007, 2013/01/07 ‘000015, PRESS RELEASE- August 31, 2012 Page 4 of 6 particularly to accompany local unions that have fought for independent union recognition in Mexico. ProDESC supports Los Mineros as one of the only national unions that allows for internal union democracy within its leadership and among its members. ProDESC is also thankful for the important solidarity of the usw. Nonetheless, ProDESC receives no funding from either Los Mineros or the USW. Since 2005, ProDESC has worked on several suecessful campaigns to defend the human rights of workers and communities. ProDESC autonomously decides its own goals, objectives, and strategies without influence from any outside group. ProDESC accompanies a broad range of communities and workers unrelated to either Los Mineros or the USW. ProDESC has worked with the Bjido La Sietrita since 2007, a full three years before there was a union presence at the La Platosa mine. ProDESC has worked with the Ejido La Sierrita for five years to fully develop an equal relationship with Excellon Resources. The Ejido’s struggle is a human rights struggle and not a mere contract matter. The Ejido is defending its fundamental human right to autonomy regarding its land and its right to fair and just local development. The Company, by blatantly ignoring and failing to comply with the Ejido’s contract, direetly ignores its obligations to provide for sustainable and respectful development for stakeholders in the region where it operates. Who is the Ejido La Sierrita and what are their demands? jido is a communally owned land entity in Mexico. The Ejido La Sierrita is comprised of 127 member- families who have communally owned for generations the land where the La Platosa mine currently operates. Because of the dismal economic reality of the region, many of these members have had to seek work elsewhere, Nonetheless, it is their human right to protect their heritage and their land and to use this important asset as a source of development for their families and neighbors. Ejido members hope to attract more of their families back from the United States and other locations with a sound community development plan that provides more locally autonomous sources of employment. The camp in front of La Platosa mine consists of representatives from each of these families along with other neighbors who live on the Fjido’s land. Excellon has violated the Ejido’s right to a clean environment and economic development by not providing, concessions and not building a water treatment plant and by blatantly violating the land rental agreement without consequence. The s that the Company respect its rights, comply with the agreement, and remedy the violations of the land rental agreement. Fjido insis Excellon’s Failure to Respect the Ejido’s Right to Development and Its Obligations to the Ejido ‘The Ejido entered into its land rental contract with Excellon in 2008 with the goal of securing its right to social development. ‘The members hoped to be able to attract the community back to the land and to prosper, not just from rent payments, but from the various social clauses included in the contract. They also wanted to ‘ensure that the mining activities would not damage their patrimony. “The Ejido has struggled for four years for Excellon to comply with this contract. In those four years, aside 2013/01/07 ‘000016 PRESS RELEASE- August 31, 2012 Page 5 of 6 from two meetings in June of this year, Excellon’s local management failed to even sit down with the Bjido for more than an hour to discuss its non-compliance with the contract. Excellon’s Failure to Guarantee a Clean Environment Mexican federal law requires mining companies to construct a water treatment plant for all water extracted from an underground mine, even if it is pumped in its natural state, if it has the potential to damage the surrounding lands. Irrespective of the permitting process, the water extracted from the La Platosa mine is harming surrounding lands. The Bjido has hited experts from large educational and governmental entities to test the water as it leaves the ground. These tests show that the water contains a high level of salt and heavy minerals and will render the surrounding land unsuitable for agricultural use in the next several years without appropriate precautions. This water was not meant to be pumped from the aquifer and spread over the drought-ridden. land at approximately 10,000 gallons/minute, which is the result of La Platosa’s operations. The Fjido has provided the results of these tests to the Canadian National Contaet Point for the OECD Guidelines on Multinational Enterprises (NCP for the OECD Guidelines). The Ejido has also provided Excellon with fairly cheap options to treat this water, without any response from the Company. Rather than provide water to the small farmers of the Ejido, Excellon currently provides this extracted water to several large-scale farmers for their agricultural use. These farmers have stated to members of the Ejido that they pay Excellon for the use of this water. These current recipients of the water do not own the land that they are farming and will have little consideration for the quality of the soil in 3-4 years. But the farmers of the Ejido will have to live with the consequences of water contamination for generations. Excellon’s Blatant Violation of Ejido’s Trust and the Land Rental Agreement More importantly, the Company has failed to disclose that it violated a primary clause of the land rental agreement by conducting exploration activities on the Ejido’s land not included in the 1,100 hectares rented under the contract and without the Ejido’s permission, The Company has acknowledged its violation of this clause in several meetings with the Ejido and the government over the last year, but it has failed to disclose this material fact to shareholders. ‘The Ejido has asked to negotiate certain changes in the contract that would remedy the Company's violations. These minimal changes would ensure a better relationship with both parties over the 30-year life of the contract. If the Company is unwilling to negotiate, the Ejido has only one other remedy: reseission of the contract. Rescission of the contract would put at risk all land on which the Company is currently operating, including its main offices and access to the mine proper. For more details on the Company's failure to comply with the contract, please see the complaint filed with the 2013/01/07 (000017 PRESS RELEASE- August 31, 2012 Contact: Alejandra Ancheita ProDESC (Proyecto de Derechos Econémicos, Sociales y Culturales) ‘Tel. +52-55-5212-2230, +52-55-5212-2229, +52-55-3334-6045 alejandra@prodese.org.mx 2013/01/07 Page 6 of 6 ‘000018 Page | of | MacCallum, Caitlin -GNC From: Brendan Cahill [bcahill@excellonresources com] Sent: August 28, 2012 3:44 PM Te Cerat, Alexandre -MXICO -TD; Robson, Wayne -MXICO -TD Ce: Peter Crossgrove; Rob Moore; Joanne C. Jobin Subject: Interaction ID 1-SWYFGU: Excellon - Update and Huffington Post Article ‘Attachments: Excelion Blockade Mexico Conflct Highlights Shortcomings Of Canadian Mining Oversight pdf, ATTOOOO'. hr; imageO01-png; ATTOOOG2.htm Alex and Wayne, [haven't updated you in a while, so here goes: « following meetings last week, a mixed state/federal/army group were supposed to open and protect an alternative access to the mine site, approximately one mile from the current access. This access was either not blockaded, or only very minimally blockaded by one or two persons ata time. Although this action was planned for 6am yesterday morning, only the state police showed up. ‘* a representative of the federal Ministry of the Interior is meeting with local officials, including the local army and police chiefs, to plan to complete the new access opening tomorrow morning. Both state and federal governments have finally agreed (only took seven weeks) that they have authority to make arrests in the face of this ongoing illegal trespass. The outstanding state, and pending federal, criminal charges will be justification for opening the second access tomorrow. Fingers crossed, we'll see what happens - at least the authorities finally seem to be fully seized of the situation. On another front, please see the attached article in the Huffington Post, just released today. Exceptionally damning for the Mexican authorities, and problematic perhaps for Canada as it seeks to reopen the Bill C300 debate. Obviously, it's not good for us or the Canadian mining industry in general. Generally, I expect this article would have been avoided if Mexican authorities had acted quickly to enforce the rule of law and defend the law of contract, rather than letting this situation linger on for closing on two months now. 1 spoke with the journalist a few weeks ago and provided here with much information regarding the situation - most of which was completely disregarded or ignored. While the facts in the piece are not necessarily completely inaccurate, without the full story they are completely biased and misleading. We would appreciate the Canadian government's awareness of this article, as it fallaciously undermines the image of all parties involved (Canada, Mexico and the Canadian mining industry), while being willfully ignorant of the political and labour realities on the ground, Happy to discuss if you have any questions regarding the attached. Thanks, 2013/01/07 ‘000019 Excelon Blockade: Mexico Confit Highights Shortcomings OF Canadhan Mining Oversight 2012-08-28 9:29 AM wt BUSINESS CANADA # Excellon Blockade: Mexico Conflict Highlights Shortcomings Of Canadian Mining Oversight Powe 08/28/2012 6:14 am Updtea082872012 6:14 a ‘The blockade outside La Platosa — a high-grade, Canadian-owned silver mine in the northeastern Mexican state of Durango ~ is by all accounts a peacetul protest Since early July, about 70 community members have camped out on the remote, sunscorched patch of land to demonstrate against ‘what they see as repeated breaches of contract by Excellon Resources, a small scale mining fim headquartered in Toronto. ‘Against the backdrop of a bloody labour standoff in South Altica, where 34 armed miners were recently shot dead by police, the Excelion blockade would seem a relatively auxiliary dispute. Athough the blockade has halted production at the company’s only revenue-generating asset, the demonstrators — a group ol ‘communal land owners known as Ejdo La Sierita — cit only minor disturbances. For the most par. they spend their days gathering wood, preparing meals and Keeping the encampment clean. When time allows, the aduls can be found playing bingo of reading newspapers, while the kids kick around a soccer ba But the appearance of calm belies a deep and ongoing conflict that strikes at the heart of many of the complex issues surrounding the ‘growing presence of Canadian mining companies in developing countries. W's a glimpse at the shortcomings of a system that observers say stil relies primarily on industry to sel-police, and lacks the transparency, standards or mechanisms needed to prevent and resolve conflicts, even as Canadian mining firms expand their reach in this space. PHOTOS: EXCELLON MINE BLOCKADE IN LA PLATOSA While the publicly traded Excelion has had an agreement with the Ejido to operate on their property since the mid-2000s, the landowners claim the company has not fuliled many of its promises to the community, such as ulding a water treatment plant and offering preferential hiring. They say they started the blockade as a last resort, after the company cancelled @ meeting scheduled to iscuss their concerns. Excollon is also at odds with some of the 250 workers in the mine, who cite health and safety issues and allege that management ‘wolated labour rights with a campaign of intimidation fo thwart a regent union organizing crv. ‘According to Excellon, however, the demonstrators are being manipulated by union interests inthe mine. "| understand the concern of our shareholders regarding what is effectively a confrontation between competing unions for control over the workforce at La Platoss,” said CEO Peter Crossgrove in a recent press release, Calling the blockade ilegal, the company has filed criminal trespassing charges with local authorities, and is refusing to negotiate until the blockade is lited. Despite complaints to Canadian authorities fled by the Ejido and the workers, negotiations have completely broken down, with both sides aigging in for what could be a long — and costly — haul. With its stockpile of ore exhausted, Excellon declared “orce majeure” al latosa on Aug. 8, a contract clause that absolves a company of shipment obligations in the event of circumstances beyond its contol Meanwhile, the workers in the mine — many of whom have thrown their support behind the Elido — aren’ being paid, and the landowners say they will not move until negotiations show signs of progress, creating an impasse that is jeopardizing a crucial source of local income, Battles such as this one are not uncommon. In recent years, concems among labour activists and human rights groups have been mounting over the activities of Canadian mining firms in developing countries, where they have been implicated in charges of abuse ‘and environmental degradation. The allegations are serious: In Guatemala, security guards employed by HudBay Minerals have been caused of deadly shootings afd rape; in Papua New Guinea, guards workin for Barrick Gold have been implicated in alleged gang np: huftingtonpost.ca/2012/08/28/encelion-blockade-proest-mexico,n1828923hunlview=psnt&comm,sefafalse Page Lot ‘000020 Excelon Blockade: Menlo Conflict Highlights Shortcomings Of Canadian Mining Oversight 2012-08-28 9:29 AM But due to weak local regulations and an absence of Canadian rules governing the activities of mining firms abroad, local communities ‘continue to have litle recourse against alleged inustices even in the most serious cases, observers say. “AL the moment, [Canadian mining firms] don't even have to answer to any of these allegations,” said Cory Wanless, a lawyer at ‘Toronto-based Kiippensteins, which is pursuing several lawsuits agains\ HudBay Minerals. “They/te not held to account anywhere." Yet despite these concerns — and the tremendous reach of Canadian mining firms — activists, politicians and legal experts ‘characterize the federal government's recent efforts to introduce more accountabilty as hall-hearted and ineffective. According to these ‘rtics, the conflict in Durango shines a light on the utter inabiity of egulators to intervene in -- or even assess ~ the operations of these ‘Companies in some of the most vulnerable places in the world. All of which, they say, has put local communities, shareholders — and the global reputation of Canadian mining firms — at risk. BAD EXAMPLE? While the involvement of mining firms in developing countries (and allegations of abuse in these settings) is not a uniquely Canadian Phenomenon, Canada is a global leader in this space. Move than 20 per cent af glabal mining equity financings. and one-third of the eauiy raised for mining globally happen on the Toronto Stock Exchange and the TSX Venture Exchange, which together list the most mining companies in the world. Seventy-five per cent of the world's mining and exploration fms are headquartered in Canada, But there have fong been questions about the kind of example Canada is setting. According to 2.200 report by the Canadian for the Study of Resource Confer (CCSAO), in the previous decade Canadian mining fms were responsible for more than one-third ot the 171 reported incidents of human rights abuses, community conflict, uniawful practices or environmental degradation in developing Countries. That figure was tiple the involvement of Australia, Canada’s closest peer. (Incidents included in the report were corroborates by two sources of information and assessed by researchers) ‘The report, commissioned by the Toronto-based Prospectors and Developers Association of Canada (PDAC), was not made public ‘until 2010, when itwas obtained by media, ‘The findings also challenged the perception that Corporate Social Resoonsibilly (CSR) policies are in themselves an effective safeguard against abuse: the authors observed that nearly eight in 10 of the Canadian mining fims involved in incidents in developing Countries from 1999 to 2009 had CSR policies in place. “There are stil significant improvements that these companies must undertake if their efforts are to be seen as legitimate by local communities,” the report concluded, PHOTOS: THE 10 DEADLIEST COUNTRIES TO BE A UNION MEMBER But despite numerous attempts by Ottawa to hold Canadian mining firms operating abroad accountable to more than their own ‘voluntary standards, Liberal MP John McKay said the current regulatory framework resembles "a vacuum.” In the fall of 2010, shortly after the CCSRC report surfaced, Bll €-300 ~ McKay's so-called Besponsible Mining Bil ~ was narrowly defeated in tho House of Commons. The private member's bil, which drew constemation from the Conservative government and industry groups, would have established a process forthe federal government to Investigate credible allegations of wrongdoing against Ganadian mining firms. Potential consequences for fms found to be guily of abuse included a withdrawal of financial support from Export Development Canada, and a removal of poliial support fom local embassies. While PDAC and other industry groups praised the death of the bil, which they argued “would have jaog: ‘and local jabs in the communities in which we work,” Amnesty International called the defeat ‘enutalion as a leader in the pratection of human sights.” Foreign Affairs and International Trade Canada (DFAIT) dectined an interview request for this story. But in an email to The Hutfington Post, spokeswoman Caitlin Workman said, "Canadian mining companies lead the world in responsible mining practices.” 1 0bs hero 1 Gi shar blow to Canada's iesnational In voting down Bill C-200, the Conservative government appeared to put is faith in the Corporate Social Responsibility Counsellor, a position it created in 2003 to mediate disputes involving Canadian mining companies on a voluntary basis. Under the umbrella ‘of DFAIT, the counsellor is intended to be “an honest broker that brings parties together to help address problems and disputes" and “create space for constructive dialogue and problem solving," according to a government website. But that goal was not achieved in the conflict involving Excollon — one of INEFFECTIVE INTERVENTION aly two complaints the olfice has probed to date. Excelion’s experience in Durango — where it has rented the surtace rights to land from the Ejido since 2004 — has not been without its bumps. Before signing a new deal in 2008 with Excellon to expand its surface holdings to 1,100 from 27 hectares, the landowners. staged a three-manth-iong blockade after the company relused to include provisions for Social programs and the construction of a water treatment plant. In the end, the Ejido were successful. According to Excellon, the company has paid a total of $2 milion to the Ejido tp: hutfingronpostca/2012/08,/28/excellon-blockade-protest-mexico_n_1828923.hemlviewssprint&comm ret=false Page 20f ‘000021 [Excelon Blockade: Mexico Conflict Mighights Shortcomings OF Canadian Mining Oversight 2012-08-28 9:29 AN} since 2008 for rent and a community fund, Canadian authorities did not get involved in the company’s dealings at La Platosa until April 2011, at the behest of workers in the mine. In their request to CSR counsellor Marketa Evans, the workers maintained that the company had violated a number of voluntary policies governing the behaviour of mining companies in developing countries. The alleged infractions included condoning the beating Of two workers by police following a reported copper theft, and threatening workers involved in a union organizing drive ~ a bid to join the National Mining Union (NMU) to address health and safety concerns. ‘The company disputed these allegations, blaming the dispute on the medaling of ProDESC, a local NGO that filed the claim on behalt of the workers, and which Excelion \ng_an its wn aceOXd, according to a CSR report published in October, 2011. Excelion told the CSR counsellor t would support any successful unionization bid, but that the workers were already represented by ‘another union — a position this group had held since 2005. The company characterized the National Mining Union, a Mexican labour ‘group affiliated with the United Steelworkers (USW), as llega, ‘Workers claimed to have had no prior knowledge of this other union, however. Dubbed the “Adotfo Lopez Mateos" union, the USW and ProDESC reprosentatives have derided this group as a “protectionist union’ established to protect the rights of management. But the process never made it to the dialogue stage. Following a six-month investigation, Excelion withdrew its participation from the CSR process and Evans suspended her efforts, which depended on the willingness of both parties to negotiate. In the October report, the CSR counsellor said she had conducted dozens of interviews with Excellon's “direct stakeholders,” and ‘confirmed that "bona fide project-affected people underpinned the request.” “This request for review had every reason to move fruitfully to the structured dialogue,” the report concluded. “Excellon’s withdrawal represents a significant missed opportunity for the company to meet its stated interests of building relationships and reputation with Mexican stakeholders.” “The office said it found “no indication that the NMU had been declared illegal According to Excelion executive vice-president Brendan Cahil, the company withdrew from the process because it believed the CSR Counsellor was biased. “Her position was very much swayed and influenced by the other parties. She didn't really take a very balanced view of the facts or have very much concemn for the facts at all," he sai. Cahill said the company has instead opted to seek assistance from “every single lever” of government in Mexico, where officials are ‘Spanish speakers familiar wth local labour law. “Im not sure why we'd bring in a Canadian CSR counsellor to deal with Mexican issues,” he said. “I don't think there's any value init whatsoever.” Evans's office declined a request for an an interview for this story, and DFAIT did not respond to questions about the Excellon conflict ‘the CSR counsellor. But in her email, Foreign Affairs’ Workman pointed to the recently announced Canadian Intemational Institute for Extractive Indus! ‘and Development as the way “our government is helping developing countries better manago thelr natural resources." “Specific incidents are investigated by local authorities,” she said "THIS VOLUNTARY STUFF AIN'T WORKING’ Since the CSR counsellor closed her case, the advocacy groups representing the Ejido and the La Platosa workers have been attempting to appeal to Canadian authorities through other means, In May, these groups took their concerns over o Canada’s National Contact Point for the OECD Guidelines for Multinational Enterprises, an interdeparimental committee chaired by DFAIT that has the authoniy to carry out investigations and datermine whether laws were broken. Co-signed by ProDESC, MiningWatch Canada, and several labour groups, the complaint maintains that Excellon has not upheld its social obligations to the Ejido, such as building a water treatment plant and providing preferential hiring and other Concessions. It also alleges that the company conducted exploration activites outside of its terory, causing significant environmental damage, and reiterates the workers’ concerns about the company's alleged interference in their attempt to unionize. ‘Then, in mid-July, about a week afer the blockade started, another complaint was filed with the Ontario Securities Commission — a regulatory body with much more significant investigative and punitive powers. Acting on behalf of ProDESC, a group of volunteer lawyers and students at Osgoode Hall Law School's Justice and Corporate Accountability Project alleged that Excollon violated securities regulations for faling to adequately disclose to sis shareholders the significance of the conflict atthe mine, and the effect ofthe blockade on its bottom lin. ‘According to Shin Imai, an Osgoode Hall law professor who helps run the accountability project, the company downplayed the severity buep:/ma.hutfingtonpost.a/2012/08/28/excellon-blockade-protest-mexico_n_1828923.ntmivew=print&comm_refsfalse Page 3of 4 ‘000022 Excellon Blockade: Mexico Conflict Highlights Shortcomings Of Canaan Mining Oversight 2012-08-289:29 aM ‘of the conflict. A few days after the blockade started, Excellon issued a p1ess release saying it would be meeting with the Ejido and ‘other parties involved, The company said it expected the blockade to end “within the next 24 ta 48 hours.” Excellon dismissed the charges filed with the OSC as “baseless,” maintaining in a press release that It “has met and continues to meet all ofits disclosure obligations.” The OSC would not discuss the case, or even confirm that it had recelved correspondence from the accountability project. But Individuals or companies that violate securities regulations can be subject to tines and restrictions on their ability to conduct business transactions. Imai said the complaint is an attempt to “go beyond the traditional human resources instruments.” “If something terrible is happening on the ground, you have to tell shareholders because people who might be investing in companies ‘should know and people who are already Investing in a company might want to sel,” he sald, “This is ust straight corporate law.” ‘And as the recent violence in South Africa shows, mining disputes can spiral and send commocily prices soaring. Other efforts are also underway to build more accountabilty into the system. Law firm Klippensteins is fighting to have the allegations against HudBay heard in a Canadian court of law, which would set a precedent for such cases. And McKay has begun work on a draft bill that would echo 2010 legistation in the U.S. requiring mining companies to 07/01/2013 ‘000030 8.18(1) - International Page lof 8.19(1) 8.21(1)(b) To: Cera Azan UKICO 10 ce: ; Reese, Wye MRICO-TO ‘Subject: fe oquest or meeting wih Govemer “Thankyou very much for your help a support Regards Peter (On 2012-0728, t 1:50 PM, ‘Sent: Sat Jul 28 11:04:16 2012 ‘Subject: Re: request for meeting with Governor ‘ex. ‘As noted, we met withthe federal ministry ofthe nero st night, for abou te hours. We belive a meting wih the governor may now Toner be necessary (or wis) ashe Federal government snow seiing elf ofthe problem, ‘By way of background + Enrique (ur cours!) and I provided background onthe station including Thursday's meeting with the id) and we advised tern that we would be forced wo declare force majeure on Morsay (ith the atendant reasons im short Ie fire of Mexican authris t0 prosecute criminal charges for espa: «+ the eds recognized that hey needed to ac, and that the sate was not capable of resolving he station one member in particular noted (ad ths sa rough varsation, but the order and general thoughts comet ‘the Blockage must be removed © wil be removed by fore. ‘© or t wil be emoved by neposation (strange that he pt Force before negation, both Enrgue and | picked upon the ordering of| the conclusion itmay be the ulm that wil be delivered wo the blockaders the authorities will emove the blockade unless sa remove the blockade ad neg) + the federal goverment has sezed ei ofthe stuation, but needs met contr ccumstances as they have only really been aware of the station fora week o en dys which f possible, as we onginally used the sate reach aesluton). + private goverment meeting hat been scheduled for Monday morning in Torreon the local ary base (era), which wil include the folowing "Federal minsties ofthe Interior, Esonomy and Labour, © Slate ministries of the Interior, Economy and Labour, © Local and federal pole, 6 theamy, + Weshould have an ntl sense of diretion/game plan by Monday evening (thinking Wednesday or, conservatively, Thustay, or 8 resto) 07/01/2013 ‘000031 '8.15(1) - International eae Page 2 of 3 + We will be mecting with with the federal goverment he abou sition on Tuesdsy morning to ensure that we are completely nine ‘on tha bas our labour has assured ws that we ae and is sue seemed to have been an tempts the meting to wriggle ou of aking ‘tion To give the feds a chance to apprise and act we are going to push back agaist declaring force majeure on Monday though we will need to explain he suation and request fre leniecy from our customer The fed are well aware now tha th lok ell i icing and we don't fave much ime before making some very hard decisions. ‘We understand through various sures tha the state governor i geting quit desperate, sos possible though unlikely tat he manages © come up wih resolution to remove te locade (we understand that a esoleton hasbeen promised by Tuesday fom th governor's fice, ‘Athi time, though, with he Feds seied ofthe mater, we do thik a meeting with he governor woud be usefUl a it would key just confse the sue | am in Mexico City over the weekend and an Monday. Ifyou hae tine for ace on Monday, would be peat 0 meet in person ave a great weekend, and hanks agin fr your continued help Best Rega, Brendan (0m 2012.07-27, at 00 PM, Alexandr Certiwerratinal.g.ca wrote: Hi Brendan, | wie you know once a request has been made Alex From: Brendan Cahill (maito:bcahllfexcellonresources. com) ‘Sents July 27, 2012 1:47 PM To: Cera, Nexandre -¥XICO-TD Ge: Bishop, Dexter -MXIC0 -TD; pecossgrove@excllonesources.com ‘Subject: Interaction ID 1-9W/1032: Re: Google Net -Excallon Resources Ales, Pease let me now when you ar available to chat ain “Thanks, Brendan (On 2012-07-27, 12:21 PM, “Alexandr Cincom ci Alnande Cra@inethonal esa wrote: HiBrendan, 1am ree to speak now ithe timing suts you. end B Cea rater (ate) Peni Serta Cmmersl) Pri Sota Ena ofan nade Guan Pj dC Sehr 2, Cl Poa oe Nese, DF SE meme, From: Brendan Cah [mato:beahil@excellonresources.com) ‘Sents ly 27, 2012 12:00 PM ‘To: Cerat, Alexandre -MXICO -TD; Blshop, Dexter -MKICO -TD Ce: Peter Crossorove ‘Subject: Fvd: Google Alert - Excllon Resources 07/01/2013 ‘000032 07/01/2013 Page 3 of 3 _AlexDexter «FYI please ee the atached ‘The Ejdo and PoDESC lel dow realize that we hold the mining ight tothe property ‘Once you have had a chance to review: | would appreciate an opportunity chat. Thanks, Brendan Begin forwarded message: From: Google Ales Date) 27. 2012103826 AM MDT ‘sjahiidexcloncesomsesam Sshjct Google Alert Enaon Resources “Tp Use ran pn (Worf ers in you query at ou wane Laan me Baeate do tet enoter art Mnase you ars ‘000033 s.24(1)a) Page | of 4 8.24(1)(b) Demers, Normand -GNC From: Brendan Cahill [bcahill@excellonresources.com] Sent: July 27, 2012 12:23 AM Te Cerat, Alexandre -MXICO -TD. ce: Peter Crossgrove Subject: Re: Possible confrontation between gray union and ejdo Importance: High Alex, believe Peter spoke with you earlier today with an update on the current situation. Following that discussion, we learned thai the gray union will be marching on the mine tomorrow morning, once again, As per your suggestion below, we will be putting out a press release very early in the morning (well before the march) disassociating ourselves from the march and any possible consequences. I'm back in Mexico City for a meeting with the federal Ministry of the Interior tomorrow evening - hopefully we get to meet while I'm here, though I have a feeling tomorrow morning may not be good to be away from the phone and computer. 1 expect we will be speaking in the morning though. Best Regards, Brendan On 2012-07-25, at 3:24 PM, wrote: Dear Brendan, we've recalled similar situations in recent years where a confrontation between disgruntied workers and mine blockaders led to violence. Despite mining companies best efforts not to associate with the Confrontation, companies have often bare the blame in the public eye, and elements of civil society, and media have accused the companies of being responsible forthe violence by sponsoring “mine thugs’ ‘Such altercations, and accusations, have unfortunately too often resulted in a public relation nightmare for the companies. We leave it to you and the team in Toronto to reflect whether such a strategy makes sense in the current context, considering what you see on the grounds. best, 07/01/2013 ‘000034 Page 2 of 4 rrendan Cahill [mailto:bcahill@excellonresources.com] ‘Sent: July 25, 2012 10:42 AM To: Cerat, Alexandre -MXICO -1D Cc: Bishop, Dexter -MXICO -TD; Peter Crossgrove ‘Subject: Interaction ID 1-9WGO7N: Fwd: EXN - Meetings with State Government Alex, ‘Thanks for your contact details. I've forwarded the notes below to update you on yesterday's meetings. Note that the actual number of demonstrators is about 120, comprising gray and white union members and a number of townspeople. 1 also understand that they are marching on the mine as I type, escorted by the state police. Please let me know when you have had a chance to review and have a moment to speak, as I would like to discuss the current situation further with you. Best Regards, Brendan Begin forwarded message: ‘On Jul 24, 2012, at 9:58 PM, Brendan Cahill wrote: Peter, ‘Some interesting developments this afternoon/evening. As discussed earlier, we met with the Minister of the Interior this morning, along with Eduardo Silva and Salvador. We met with them again in the early afternoon and advised them that we would agree to meet with the Ejido in Torreon tomorrow (Wednesday). The SG is effectively looking to confirm "due process" so that it can move to a secondary stage, which may involve the removal of the blockaders. The Governor (who is seeking a resolution as quickly as possible) was looking for the SG to try to bring us and the Ejido together one last time to confirm that a resolution by negotiation alone at this stage is impossible. ‘We were very clear that we do not intend to negotiate while the blockade is in place. We would, however, discuss the items that could (trucking, cafeteria, etc) or could not (increased rental fees) be negotiated once the blockade was lifted, and try to convince the Ejido to lift the blockade so that we might return to negotiations in 07/01/2013 ‘000035 07/01/2013 Page 3 of 4 good faith, The SG was completely in support of these limits on what we would say/agree at the meeting. Later in the evening, we met with the Minister of Labour and the Undersecretary of the Interior. The primary purpose of the meeting was to (a) update the ML regarding the current situation and (b) suggest that his presence at tomorrow meeting wasn't, optimal, as we do not want to confuse or mix the Ejido and Union issues. We very particularly did not want any union reps at the meeting tomorrow, and would likely refuse to attend if any were there. During the meeting (around 7 or 8pm), we were informed that the Ejido and ProDESC now wish to meet on Thursday, rather than tomorrow (Wednesday). I don’t think we were given a straight answer as to why. Problematically, Eduardo cannot make a meeting on Thursday. Our proposed solution, and this needs further discussion with you in the morning, is that I will attend the meeting without Eduardo ‘on Thursday in Torreon - though with, probably, Marisa, or someone else from the mine, to help with translation. I will simply deliver our message - that we cannot negotiate while there isa blockade in place, that there are a number of items that we can progress with further negotiation, and that we hope the Ejido will remove the blockade so that we can continue negotiating in good faith - Eduardo and I will work on further specifics in the morning. As my Spanish is rusty (or non-existent), we won't be inevitably drawn in the very negotiations we are trying to avoid, but we will have satisfied the "due process” that the SG looks to be seeking. As noted, we should discuss this approach first thing in the morning. ‘Two key points: both the Minister of Labour and the Undersecretary of the Interior stated very, very clearly that the Governor was completely aware of the situation, wanted a resolution as quickly as possible, and under no circumstances would countenance the loss of the mine and/or the associated jobs. I can't express by email how explicitly they stated this. Also, the Gray Union is organizing a 400 person demonstration tomorrow in Bermejillo or Palacio, which may help our case on ‘Thursday as demonstrating the community and worker disfavour of the ongoing blockade - this may indirectly have been why our meeting with the Ejido was moved to Thursday. Eduardo - please fill in any key points that I may have missed. Talk to you in the morning, Brendan (000036 Page 4 of 4 07/01/2013 ‘000037 s.19(1) Page 1 of 2 Demers, Normand -GNC From: —Hradecky, Sara -MXICO -HOM/CDM. Sent: July 29, 2012 6:40 PM Ce: erat, Alexandre -MXICO -TD; Robson, Wayne -MXICO -TD; Martin, Ginette -MXICO -GR ‘Subject: Re: Mensaje para el uj, Excellon Resources, y la visita de su ‘Muchas gracias por la informacion. Nos ponemos en contacto con Excellon tambien para saber mas de sus, planes en el DF antes de llegar a Durango. Sara Hradecky To: Hradecky, Sara -MXICO -HOM/COM ‘Sent: Sun Jul 29 13:39:30 2012 ‘suj. Excellon Resources, y la visita de su Buenas tardes Sra Embajadora Me permito informar a Ud el interes que tiene el Q de Excellon Resources ‘Me comunique con el. ftipara ponernos de acuerdo en la hora en que llegarn a Durango el proximo martes y me informo que manana lunes tendran reuniones en la Ciudad de Mexico con funcionarios del gobierno federal y el quedo en avisamos dependiendo de los avances de esta reunion si continuan con el viaje a Durango le entrevistarse con el lo desde mi oficina mévil BlackBerry® de Telcel From: Date: To: HE Ce: Subject: M 1 suj. Excellon Resources, y la visita de su Quisiéramos solicitarle amablemente le haga legar este mensaje al 07/01/2013 ‘000038 s.19(1) Page 2 of 2 Por este medio, ademas de enviarle un cordial saludo, nos dirigimos a Usted con respecto a la situacién actual de la Mina La Platosa que pertenece a la empresa canadiense Excellion Resources, Como es de su conocimiento, fa operacion de la mina se ha visto afectada a ralz de los eventos recientes y del bloqueo de las tttimas semanas, Directivos de la empresa Excellon Resources han estado en contacto con esta Embajada a raiz de la presente situacion. Nos comunicaron que la empresa esta teniendo pérdidas financieras importantes y que estan reconsiderando la viabilidad de la operacién de Ia mina La Platosa. Es de nuestro conocimiento que el de dicha compaitia, viajaré de Canada a Durango el martes 31 de julio y é! tiene gran interés de reunirse con Usted para platicar de tan importante ‘asunto. Debido a la magnitud de la inversién canadiense en su Estado, considerariamos adecuado que se lieve a cabo dicha reunién, ‘Me permito ponerlo en contacto con el ‘de Excelion Resources, quien est encargado de este asunto: Excollon Resources Inc. ‘900 - 20 Victona Street Toronto, ON Canada M5C2NB Website: www excellonresources.com Le manifiesto nuestro agradecimiento por el apoyo de su Gobierno y reiteramos la excelente relacion entre dos paises hermanos como lo son México y Canada. Sin mas por el momento, quedo de usted, Sara Hradecky Embajadora de Canada en México 07/01/2013 ‘000039 s.24(1)(b) Demers, Normand -GNC. Demers, Normans From: Bishop, Dexter -MXICO -TD Sent: July 12, 2012 11:30 AM To: Hemingway, Shauna -MXICO -EC; Hartery, Lynn -MXICO -GR; Morgan, David -MXICO -GR; Cerat, Alexandre -MXICO -TD ce: Castro, Gabriela -MXICO -TD Subject: RE: FW: Urgent request to meet with representatives of Ejido ‘La Sierita' pertaining to Excellion Resources-owned mining operation Uhave had a call from Excellon, In brief: Dexter Original Message-— From: Bishop, Dexter -MXICO -TD ‘Sent: July 11, 2012 1:01 PM ‘To: Hemingway, Shauna -MXICO -EC ‘Subject: RE: FW: Urgent request to meet with representatives of Ejido La Sierita’ pertaining to Excellon Resources- ‘owned mining operation ‘Thanks, and thanks. I'l let Gabi know. Original Message-— From: Hemingway, Shauna -MXICO -EC Sent: July 11, 2012 12:07 PM To: Bishop, Dexter -MXICO -TD ‘000040 8.21(1)(0) Subject: RE: FW: Urgent request to meet with representatives of Ejido ‘La Sierrta’ pertaining to Excellon Resources- ‘owned mining operation Yes, 3pm tomorrow - and Gabi wasn't on your email to me. Original Message-— From: Bishop, Dexter -MXICO -TD Sent: July 11, 2012 12:06 PM To: Hemingway, Shauna -MXICO -EC Subject: RE: FW: Urgent request to meet with representatives of Ejido ‘La Sierrita' pertaining to Excellon Resources ‘owned mining operation Helio Shauna, ‘There is @ note that we can share. Gabi can you send please? Is there a time set for the meeting? Dexter —-Original Message— From: Hemingway, Shauna -MXICO -EC Sent July 11, 2012 11:54 AM To: Bishop, Dexter -MXICO -TD; Morgan, David -MxICO -GR Ge: Cerat, Alexandre -MXICO -TD; Martery, Lynn -MXICO -GR Subject: RE: FW: Urgent request to meet with representatives of Ejdo ‘La Sierrta! pertaining to Excelion Resources- ‘owned mining operation Hi Dexter, Do you have any briefing materials on the Excellon mine in Durango that you could share? Perhaps something since the case was reviewed by the CSR office in Toronto? Shauna -—Original Message——- From: Bishop, Dexter -MXICO -TD Sent: July 11,,2012 6:17 AM To: Hradecky, Sara -MXICO -HOM/CDM; Hemingway, Shauna -MXICO -EC; Morgan, David -MXICO -GR Ce: Cerat, Alexandre -MXICO -TD; Hartery, Lynn -MXICO -GR ‘Subject: Re: FW: Urgent request to meet with representatives of Ejido " ‘owned mining operation Sierrta’ pertaining to Excellon Resources- ‘and we will identify a Trade representative as part of the team. We will need at some point to determine how we respond to any subsequent requests. Original Message —- From: Hradecky, Sara -MXICO -HOM/CDM To: Hemingway, Shauna -MXICO -EC; Morgan, David -MXICO -GR; Bishop, Dexter -MXICO -TD Ce: Cerat, Alexandre -MXICO -TD; Hartery, Lynn -MXICO -GR Sent: Tue Jul 10 19:59:43 2012 Subject: Re: FW: Urgent request to meet with representatives of Ejido 'La Sierrita' pertaining to Excellon Resources- ‘owned mining operation | agree that the Embassy needs to receive these folks, to listen and not comment, just as we would if someone came to present a petition to us. | am happy if Shauna receives them, but | would think a TO rep - to listen, possibly to gather intel helpful to the company - would also be appropriate. if these folks had come to protest outside the embassy, TD and FSDP would normally receive together, incl so that 2 people receive them vs someone alone. Dexter, if u choose to exempt yourself, do you have someone else who can step in with a view to gathering useful info, and providing a whole-of- Embassy meeting? —— Original Message ~ From: Hemingway, Shauna -MXICO -EC ‘To: Morgan, David -MXICO -GR; Bishop, Dexter -MXICO -TD Ce; Cerat, Alexandre -MXICO -TD; Hradecky, Sara -MXICO -HOMICDM; Hartery, Lynn -MXICO -GR Sent. Tue Jul 10 18:00:33 2012 Subject: Re: FW: Urgent request to meet with representatives of Elid ‘La Sierra’ pertaining to Excellon Resources- owned mining operation 2 ‘000041 .15(1) - International s.21(tya) Hi Dexter, David, 8.21(1)(0) if So, I'd be grateful for any background before tomorrow. agree with David that it doesn't make sense for GR to report internally to TD on issues directly affecting TD clients. Other views welcome, of course. ‘Shauna <= Mensaje original —— ‘De: Morgan, David -MXICO -GR ara: Bishop, Dexter -MXICO -TD; Hemingway, Shauna -MXICO -EC CC: Castro, Gabriela -MXICO -TD; Cerat, Alexandre -MXICO -TD; Hradecky, Sara -MXICO -HOM/CDM; Hartery, Lynn - MXICO-GR Enviado: Tue Jul 10 17:11:42 2012 ‘Asunto: RE: FW: Urgent request to meet with representatives of Ejido'La Sierrita’ pertaining to Excellon Resources- ‘owned mining operation Just to note, Dexter and | spoke, and | presented other arguments that | thought have a bearing on this as well. For ‘example, that the issue determines the responsibilty and that stakeholders ‘iow with the issue’, whomever they are; that if this was primarily labour-related, Shauna you would possibly lead, but Dexter should be there, that GR shouldn't "report internally" to a section that is often lead on the issue; and that a adverse perception is risked too by being seen to have chosen not to listen”. ‘The question as | understand itis “is this a special case” (per Dexter's paras 283). Dexter mentioned he'd write. | hope I'm ‘not mischaracterizing the conversation Dexter D Original Message— From: Bishop, Dexter -MXICO -TD ‘Sent: July 10, 2012 4:55 PM To: Hemingway, Shauna -MXICO -EC; Hartery, Lynn -MXICO -GR Ge. Morgan, David -MXICO ~GR; Castro, Gabriela -MXICO -TD; Cert, Alexandre -MXICO -TD; Hradecky, Sara -MXICO - ‘Subject: RE: FW: Urgent request to meet with representatives of Ejido ‘La Sierrit’ pertaining to Excellon Resources- ‘owned mining operation { spoke with Excetion this mornin Dexter ‘00042 s.21(1)(a) Original Message-— From: Hemingway, Shauna -MXICO -EC Sent: July 10, 2012 12:52 PM To: Hartery, Lynn -MXICO -GR; Bishop, Dexter -MXICO -TD Cc: Morgan, David -MXICO -GR; Castro, Gabriela -MXICO -TD; Cerat, Alexandre -MXICO -TD. Subject: Re: FW: Urgent request to meet with representatives of Elido ‘La Sierrita! pertaining to Excellon Resources- ‘owned mining operation | am happy to meet with them on Wednesday with others. | noted the issue to HOM, and she is fine with Dexter, Lynn and | meeting the folks from the ejido Shauna Mensaje original — De: Hartery, Lynn -MXICO -GR Para: Bishop, Dexter -MXICO -TD CC: Morgan, Davi -MXICO -GR; Casto, Gabriela -MXICO -TD; Cert, Alexandre -MXICO -TD; Hemingway, Shauna - MXICO -EC Enviado: Tue Jul 10 12:43:50 2012 ‘Asunto: FW: Urgent request to meet with representatives of Ejido‘La Sierrte' pertaining to Excellon Resources-owned mining operation Related to same issue, here is a message from MiningWatch Cda with some specific complaints about the company and pressing for a meeting between Embassy officials and the communty representatives. Lynn Original Message-~ From: Jen Moore [mailto jen@miningwatch ca} Sent: July 10, 2012 12:25 PM ‘To: Hemingway, Shauna -MXICO -EC Co: Hartery, Lynn -MXICO «GR Subject: Urgent request to meet with representatives of Ejido ‘La Sierrita’ pertaining to Excellion Resources-owned mining ‘operation Dear Ms. Hemingway and Ms, Hartery, | am writing to you as the Latin America Program Coordinator for MiningWatch Canada, which is also a co-notifier on a specific instance recently submitted to the Canadian National Contact Point in Ottawa under the OECD Guidelines for Multinational Enterprises from workers and ejidatarios at Excetion Resources’ La Platosa mine in Durango. In particular, | would ask for your prompt attention to a request from representatives of the Project for Economic, Social and Cultural Rights (ProDESC) who have been in touch with your office in order to arrange a meeting with community members from the Ejido'La Sierita’ who willbe in Mexico City on Wednesday and Thursday ofthis week. ‘The Ejidatarios have made multiple attempts to dialogue with Excellon Resources over the company’s lack of compliance with a land-use contract that was established between the two parts in 2008. The company has not followed through on important aspects of this contract, including fo construct a water treatment plant that would make water being pumped out of the mine useful for local agricultural purposes and to respect Ejido decision making processes around where exploration work and other mining activities may take place. Nor has the company demonstrated its wilingness to dialogue in good faith with the Ejido, despite their repeated efforts. As a result of talks breaking down once again last ‘week, the Ejido ‘La Sierrita' is now blockading the mine operations. Representatives of the Ejido will be in Mexico City in coming days and are interested in speaking with the Canadian Embassy about this situation and about how your offices. might play a role toward resolving this conflict ‘Once again, | would ask that you respond to ProDESC in order to set up a meeting with the Ejido representatives and to hear their suggestions about how the Embassy might contribute to achieving a satisfactory resolution to this dispute ‘Thank you very much for your time and consideration in responding to this request. Sincerely, Jennifer Jennifer Moore ‘000043 Latin America Program Coordinator MiningWatch Canada eww. miningwatch.ca ‘email: jen@miningwatch.ca tel: 613.569.3439 / fax: 613.569.5138 ‘00044 .15(1) - International Page | of 3 s.19(1) 8.20(1)(c) Demers, Normand -GNC From: _Cerat, Alexandre -MXICO -TD Sent: September 27, 2012 12:13 PM To: ‘Brendan Cahill Ce: Robson, Wayne -MXICO -TD; ‘Peter Crossgrove’; Rob Moore’; ‘Peter Crossgrove’ ‘Subject: RE: EXN - New Blockade Forgot to say that we'd be pleased fo make an introduction should you decide to talk to him. Alex From: Cerat, Alexandre -MXICO -TD Sent: September 27, 2012 11:09 AM To: ‘Brendan Cahill Ce: Robson, Wayne -MXICO -1D; ‘Peter Crossgrove'; Rob Moore; ‘Peter Crossgrove! Subject: RE: EXN - New Blockade Dear Brendan, ‘As discussed with Rob and you earl black union illicit strikes at their 6 actually the union accredited to the mine. Nevertheless, it teligence on how their company was able to come to a might be worth talking to. ‘compromise with the ‘You will find below the contact info for Best, Alexandre B. Cérat First Secretary (Trade) | Premier Secrétaire (Commercial) | Primer Secretario (Comercial) Embassy of Canada | Ambassade du Canada | Embajada de Canada Schiller 529, Col. Polanco, 11560 México, D.F. Mitnet: 379-3356 tel +52(55) 5724-7933, From: Robson, Wayne -MXICO -TD 07/01/2013 ‘000045, Page 2 of 3 3.19(1) ape" ‘Sent: September 26, 2012 9:35 AM To: ‘Peter Crossgrove'; Brendan Cahill Ce: Cerat, Alexandre -MXICO -TD; Peter Crossgrove ‘Subject: RE: EXN - New Blockade Thank you for the update gentlemen, I have advised the Ambassador (who was just returning from Durango last evening as well). We have also noted your press release of this moming. Please let us know if we can facilitate in any way. Wayne From: Peter Crossgrove Sent: September 25, 2012 5:30 PM To: Brendan Cahill Ce: Cerat, Alexandre -MXICO -TD; Peter Crossgrove; Robson, Wayne -MXICO -TD ‘Subject: Re: EXN - New Blockade STEVE VAUGHAN IS ARRANGING A MEETING WITH THE MEXICAN AMBASSADOR TO CANADA.UNDER NAFTA WE ARE ENTITLED TO THE FULL PROTECTION OF THE MEXICAN LAW.WE ARE ALSO GETTING AN OPINION AS. TO WHETHER WE CAN SUE NAPOLEON FOR DAMAGES AND HIS ASSETS IN CANADA. On Tue, Sep 25, 2012 at 5:58 PM, Brendan Cahill wrote: It appears that a new blockade has started at La Platosa, this time with a far more Black Union (Napoleon's) tone. This morning there was a union certification hearing in Torreon to certify the results of the vote of our workers on July Sth, which the Grey Union (Carlos Pavon) won based on the initial results. No decision was made at the hearing, but I understand from our representatives that it sounded like the judge was likely to certify the grey union. A new blockade made up primarily of black union members, along with some Ejido, commenced about an hour after the hearing terminated. We're working as usual with all levels of government (Peter will be calling the Governor this evening), and will be discussing further with the Grey Union and the Concemed Women of Bermejillo. Just wanted to update you on the current situation. At this juncture, however, I think we will be shutting down and flooding the mine on Friday if we don't achieve an immediate and lasting resolution. I'll be in touch with further developments. EXCELLON 07/01/2013 ‘000046 Page 3 of 3 Brendan Cahill Executive Vice President Excellion Resources Inc. E_ beahil@excellonresources.com W ExcellonResources.com T 416 3641130 C 647 3006891 F 416.364.6745, IMPORTANT NOTICE: Ths messages atended onl forthe use a he individual ox eny to which Ms adoressed. The message may contain infomation has prvlegod.confdental and exempt fom dcosure undo apoeaoio lw. fhe reader of ts messages not Ve mended Tecilen or the enployee of agent respons fr delwerng the message the ntenced repent, you ae noted at any esernnaton. ‘isttouton or copying of tis communion ig Srety prone. i you Nave recevea this communtaton neror ple natly Excalen Inmediataly t nfogexcelomesources com Esta ransistn 6 pera uso exchshvo de la persona o entidad a quien es digi, y puede contener informacion prvlegiada oconfidencia que ‘or ley no puede ser iulgada Por favor. tanga on cuenta que cuakulrcwalgacion,dtPeacgn 9 Usa de eta comunicadono cualquiera de Sus Sijutos esta ealmente protbo.Susied rece por ero este caren elecroico or favor consniquelompeatamente a Exceion ‘3 ife@excelonresaurces. com 07/01/2013 ‘000047 ee Page 1 of 3 '8.18(1) - International s.24(1)(a) Demers, Normand -GNC. From: Robson, Wayne -MXICO -TD Sent: August 10, 2012 12:57 PM To: Cerat, Alexandre -MXICO -TD; 'beahill@excellonresources.com Ce: ‘perossgrove@excellonresources.com rmoore@excellonresources.com’ ‘Subject: RE: Excellon - Update PROTECTED A Unfortunately, | am the only Canadian in the trade section today (of what is normally eight) and am: not available at 13:30. Wayne Robson Senior Trade Commissioner / Délégué commercial principal Minister Counsellor / Ministre Conseiller / Ministro Consejero Embassy of Canada / Ambassade du Canada / Embajada de Canadé Schiller 529. Col. Polanco México, B.F. 11560 Tel: (55)-5724-7930 Fax: (55)-5724-7982 Mitnet: 379-3350 Email: wayne.robsonginternational.gc.ca 07/01/2013 ‘000048 Page 2 of 3 5.1941) From: Cerat, Alexandre -MXICO -TD Sent: August 10, 2012 11:34 AM To: ‘bcahill@excellonresources.com’; Robson, Wayne -MXICO -TD Ce: ‘pcrossgrove@excellonresources.com’;'rmoore@excellonresources.com Subject: Re: Excellon - Update Hello Brendan, ‘Thank you for update. | am unfortunately j ‘but adding our Minisiter-Counselior, ‘Wayne Robson, to this exchange to see whether we have anybody suitable to attend the 1:30 meeting with SEGOB and Procuradoria Agraria (PA). Incidentally is a good contact of the Embassy and knows Canada well. He is a man who holds a balanced view of community development needs while very much conscious of the benefits that mining investment can bring. His organization could be a credible interlocutor in assisting a renewed dialogue with the community, especially now that public opinion in Bermejilla is starting to change. Best, Alex From: Brendan Cahill To: Cerat, Alexandre -MXICO -TD Ce: Peter Crossgrove ; Rob Moore Sent: Fri Aug 10 09:42:18 2012 Subject: Excellon - Update Alex, FYI, I'm back in Mexico City for a meeting at 1:30pm this afternoon with SEGOB and the agrarian counsellor. We will be discussing the possibility of an alternate road access, as well as other potential avenues for a resolution. We understand that ProDESC approached the government earlier this week for a meeting on Friday. We're not sure of their intention, but hoping that they're starting to break. Public opinion in Bermejillo has gone completely against the blockade, so they may be seeking a way out or some concession to claim a victory. 'm not sure if this is to protocol, but we would welcome your presence at the meeting, if that's possible and you can fitit into your schedule. Please let me know when you have a moment. Best Regards, EXCELLON Brendan Cahill Executive Vice President Excellion Resources inc. 07/01/2013 ‘00049 Page 3 of 3 E_ beahill@excellonresources.com W ExcellonResources.com T 4163641130 C 6473006891 F 416 3646745, IMPORTANT NOTICE: This message is intended onl forthe use of the nda or ey to which itis addressed, The message may contin ‘sfocmaton als prlages, confidential and exempt fom discesure under applcabl av. he eader of hs messago set he mendod recipient forthe empayee oF agent responsible for deeang the message he ntended recent ou are Nod hal ary assarabon,aEMutON ©” opying otis commurseaton i tity pone, you have receved the commureaion m er, pase nly Excelon medley # Feta transmsn es pare uso exclisia de la persona o eta a quion esta digi, y pode cononarinlrmacion privogiada 0 congenial ave por ey pede Ser draigada. Por tava, tenga en venta ue cuaguerdvagacion asttucon o Uso de esta comunizacion ocuatulera de sus ‘Sojurns esta tatamente pronino, 8 usted rei pa arrest conten secwonico, por favor comuniquelnmedatamerts @ Excofon Snomercelonesouees con 07/01/2013 ‘000050 s.19(1) Page 1 of 2 Demers, Normand -GNC From: Brendan Cahill [bcahill@excellonresources.com) Sent: August 22, 2012 11:24 AM To: Robson, Wayne -MXICO -TD Ce: erat, Alexandre -MXICO -TD; Peter Crossgrove ‘Subject: Re: Excellon - Request for Meeting with Governor of Durango re Closing La Platosa ‘Thanks Wayne. Yes, met with the Governor on Monday and the meeting went quite well - yesterday was spent struggling to get back to Toronto, We may be getting somewhere in the next few days, but I've spent enough time down there now not to make predictions. Tl keep you updated on events as they become more clear (muddily promising at the moment) - but thanks again for arranging the me Best Regards, Brendan Cahill Executive Vice President Excellion Resources Inc. E beahil@excellonresources.com T 4163641130 C 6473006801 F 416 3646745 On 2012-08-22, at 10:03 AM, ‘To: Castro, Gabriela -MXICO -TD Ce: Cerat, Alexandre -MXICO -TD; ; Robson, Wayne -MXICO -TD; ‘Sent: Sat Aug 18 10:46:01 2012 ‘Subject: Re: Excellon - Request for Meeting with Governor of Durango re Closing La Platosa Gabriela, It would probably be useful for the Governor to have some background about Peter prior to the meeting. I've attached a brief backgrounder - would you be able to provide a copy to the Governor through his staf? Thanks, Brendan Cahill Executive Vice President Excellon Resources Inc. E. beahill@excellonresources.com T 4163641130 C 6473006801 F 4163646745 07/01/2013 ‘000082 PROTECTED A (UNCLASSIFIED without background) (QP Note 4: 00203-2012 Excellon Resources Inc. La Platosa mine in Mexico - Request for review received by Canada's National Contact Point. Last Modified: 2012/06/04 The Canadian National Contact Point has received a request for review of Excellon Resources Inc.'s compliance with the OECD's Guidelines for Multinational Enterprises in its, operations in Mexico. Responsive Lines: (>> indicates updated line) » A request for review of Excellon's compliance with the OECD's Guidelines for Multinational Enterprises has been received by the Canada's National Contact Point (NCP). » Canada's NCP Secretariat has initiated contact with its Mexican counterparts regarding the initial assessment of the request. We look forward to working with the Mexican National Contact Point in handling this request for review. » The Government of Canada has available two voluntary dispute resolution mechanisms to assist affected stakeholders with issues that may arise in the extractive sector; the CSR Counsellor and Canada's National Contact Point. » These mechanisms are intended to benefit all the parties who make use of them to. resolve disputes. Stakeholders are demonstrating an increasing interest in these mechanisms as they pursue effective implementation of international CSR standards and successful issue resolution. » The Canadian Government encourages and expects all Canadian companies working globally to respect all applicable laws and international standards, to operate in a socially and environmentally responsible manner, and in consultation with host governments and local communities. ‘000083 8.15(1) - International PROTECTED A (UNCLASSIFIED without background) QP Nove #: 00203-2012 Background: On Monday, May 28, 2012, the Secretariat of Canada's National Contact Point (NCP) received a request for review of the compliance of Excellon’s La Platosa operations with the OECD's Guidelines for Multinational Enterprises (the OECD Guidelines). The notifiers indicated that they were simultaneously filing a request for review with the NCP of Mexico. ‘The request cites issues related to labour rights and water quality, The request to the NCPs was jointly submitted by Local 309 of the National Mining Union of Mining, Metallurgic and Similar Workers of the Mexican republic (SNTMMSSRM), the Economic, Social, and Cultural Rights Project (ProDESC), the Canadian Labour Congress, United Steelworkers, and MiningWatch Canada (collectively, the "notifiers"). Representatives of the notifiers met with Canadian NCP representatives on May 28, 2012 to present the issues Each country that adheres to the OECD Guidelines is required to establish an NCP. While the OECD allows for flexibility in the format and composition of individual NCPs, it stipulates that the role of each is identical: to promote the Guidelines and contribute to the resolution of issues that arise related to their implementation. While the Guidelines clarify that it is generally the NCP of the country in which the issues arose (the host country NCP) that deals with the Specific instance, in consultation with the NCP of the country in which the relevant company is headquartered (the home country NCP), this need not always be the case. The Canadian NCP Secretariat, housed in DFAIT, has initiated contact with its Mexican counterpart regarding the processing of this Specific Instance to determine which NCP is to take the lead. ‘On Tuesday May 29, 2012, MiningWatch Canada posted a press release which refers to the NCP submission and summarizes some of the issues contained therein. This press release also makes reference to the April 2011 request for review by the CSR Counselor's Office of Excellon's La Platosa Mine. The first Review Process to be handled by the Office of the CSR Counsellor was the one related to Excellon’s La Platosa Mine. The review was related to alleged violations of the Voluntary Principles on Security and Human Rights as well as violations of several principles of the OECD Guidelines. in November 2011 Excellon withdrew from the Review Process and the Office was required to end the Process. Several of the parties that submitted the request to the CSR Counsellor's Office are included in the group of notifiers in the submission to the NCP. Of note, one of the notifiers in this case is the Canadian Labour Congress (CLC). The CLC is a stakeholder with a long-standing interest in NCP issues, particularly the implementation Page 2 ‘000054 PROTECTED A (UNCLASSIFIED without background) (QP Note #: 90203-2012, of the Guidelines’ labour chapter provisions. The CLC has engaged in activities to promote awareness of the Guidelines among its members and participated in NCP consultations regarding the most recent review and update of the OECD Guidelines in 2010-2011 Prepared By: Andrew Kavchak/BTS Approved By: Consulted Wit ‘000055 s.15(1) - International Page 1 of 6 Demers, Normand -GNC From: Cerat, Alexandre -MXICO -TD Sent: October 3, 2012 4:50 PM To: EXTOTT (GNC); EXTOTT (GGA); MXICO (TD); MXICO (GR); Watson, Lynda -GNC; Nagy, Catherine -GNC; Rousseau, Louise -GNC; Pagé, Martial -GGD; Staruch, Dianne -GGA Ce: Crosbie, William -CFM; Dubé, Roxanne -GND; Hradecky, Sara -MXICO -HOM/CDM; Anderson, Mary -MXICO -GR; *MXICO-TD; *MXICO-GR; *MXICO-PRG; *MXICO-CS; *GJARA-TD; *MNTRY-TD; Demers, Normand -GNC; Bongard, Karen -GGA; Yung, Jason - GGA; Wetmore, Colin -GGA; Cowl, Terrence -GGA; EXTOTT (CNA); EXTOTT (CNO); Menard, Josée -CNO; MacDougall, Glenn -CNO; Bertram, Eric -CNA; Chase, Stephen -BBR; McCabe, Sean -BBR; McPherson, Glen -BTA | Subject: PROTECTED A - XVTD 0252- Ambassador Hradecky's visit to the State of Durango Attachments: 120925 HOM Visit to Durango.pdf, Imagen.wma PROTECTED A Summary. Ambassador Hradecky conducted her first official visited to the state of Durango on September 23rd-25th, 2012, accompanied by Embassy -TD/Cérat, -GSRP/McLaughlin, and -CS/Lopez. The Ambassador undertook an ambitious program by meeting with Governor Jorge Herrera Caldera and participating in a series of meetings with Cabinet Secretaries from the Durango Government including Economic Development, International Affairs, Tourism, Natural Resources, and Education. Key elements of this visit also included conducting a roundtable with Canadian investors operating in the state and meeting the Mennonite communities living in Durango. This visit is part of a concerted Embassy effort to reinforce Canada’s profile in key states, not least because democratic and structural changes have given Governors increasing power and autonomy. 1. Context Ambassador Hradecky's visit took place in the aftermath of one of the worst droughts in 80 years in Durango (22 months without rain), resulting in significant internal displacement, with reports of up to 330,000 rural inhabitants seeking refuge in the state’s larger urban centres of Durango, Gémez Palacio and Pueblo Nuevo and in the death of over 200,000 cattle. Despite its challenges, the state of Durango remains an important commercial partner for Canada and is Mexico's third largest recipient of FDI from Canada (9% of CDIA in Mexico goes to Durango) and one of the country's main producers of gold and silver. Canada’s reputation on the ground goes beyond our presence as foreign investors, and our government is seen as a partner of choice for potential cooperation on a range of issues including labour 07/01/2013 000056 $.15(1) - International Page 2 of 6 mobility; education; capacity building on forestry management; agricultural & cattle management; and science and technology. 2. Governor Herrera HOM met with Governor Jorge Herrera Caldera on the morning of September 23rd in the setting of the beautiful former hacienda, La Ferrera. Mr. Herrera, the former mayor of the city of Durango and now a PRI Governor two years into a six-year tenure is a well-respected politician who has earned the reputation of a hard-worker striving to promote Durango's competitiveness by attracting investment and tourism, and for his efforts in addressing issues such as migration and security. Governor Herrera, who was accompanied by his Secretary of Economic Development, Francisco Gutiérrez Fragoso, highlighted the openness of his administration to be true facilitators of foreign investment. In that regard, Governor Herrera recognized the situation that Canadian mining company Excellon Resources was in following a two-month site blockade, but to remain engaged and to continue working with federal counterparts to ensure a predictable investment environment. Ambassador Hradecky thanked him for having met twice personally with senior management from the company. On the agriculture front, the Durango Government is interested in engaging with Canadian greenhouse companies. The Governor also highlighted how Durango is transforming itself to become a hub for industry, citing by way of examples the massive new $1.5 billion superhighway that will connect Mexico's Pacific coast with the Gulf coast (dubbed by the Governor "Mexico's answer to the Panama Canal"); a multi-modal transport and logistics hub; the establishment of an inland tariff-free zone; and the development of a new industrial park with a dedicated training centre. The Governor also mentioned that Durango is an active member of the NASCO Corridor (North America's Corridor Coalition) — Note: NASCO annual conference was set to take place later the next week in Winnipeg, Manitoba, with participation by Durango's Secretary of Economic Development. Furthermore, the Governor aiso highlighted Durango's interests in collaborating with Canada with regards to forest firefighting, forestry management, and pest control. The Ambassador announced that a "Canada-Mexico Arrangement for the Exchange of Wildland Fire Management Resources" was in the final stages of drafting and that through CONAFOR (Mexico's National Forestry Commission), Durango would be able to benefit from this arrangement. Other areas of interest mentioned by Governor Herrera included education, cooperation, and S&T. Ambassador Hradecky illustrated the potential for Canada-Durango cooperation in terms of education, building on Canadian programs such as International Experience Canada, Emerging Leaders in the Americas Program, 3 Idiomas, and the IMAGINE education fair. She also highlighted that the Embassy manages a Canada Fund program and would be delighted to have a first project in Durango, namely under the development assistance priorities such as sustainable economic growth; food security; democracy; security and stability; as well as climate change. Following the one-on-one meeting, the Governor hosted a breakfast for the Ambassador in the presence of some 80 business representatives from Durango's Business Coordinating Council and from the Mining community. In his address, the Governor reiterated 07/01/2013 000057 Page 3 of 6 $.15(1) - International 3. International Affairs On September 23, HOM met with the Secretary of Tourism of the state of Durango, Juan Avalos, the Director of International Affairs, Maria Elena Castafios Castafios, the Director of Civil Protection, Arturo Galindo, and other state government representatives. The meeting began with the Secretary of Tourism providing an overview of the state’s tourism strategy, which includes: e Promoting Durango’s famed history as the filming site for many classic Western movies (note: many old movie sets have been converted into tourist attractions, such as “John Wayne’s Ranch’), and growing the state’s film industry. e Capitalizing on the massive new $1.5 billion superhighway that will connect Mexico’s Pacific coast with the Gulf coast. Contacts said that this project, set for completion by the end of 2013, will pass through the northern portion of Durango State, and will cut drive time between the interior city of Durango and the Pacific port of Mazatlan from six hours to 2-%. The crown jewel of this project is the Baluarte Bicentennial Bridge that unites the states of Durango and Sinaloa; which at 403 metres above the Baluarte River, is the highest bridge in the Western Hemisphere and second-highest in the world. Contacts said that this project will result in an economic boom to the historically isolated region. e — Attracting tourists from the coastal resort town of Mazatlan in the neighbouring state of Sinaloa. The impact of security issues on the state’s tourism sector was discussed at length — The Director of Civil Protection then turned to discussing the devastation wrought by the recent drought on agricultural and forested lands, as well as thousands of communities throughout the state. Examining ways Canada could assist in more general terms, HOM advised participants of the draft “Agreement for the Exchange of Wildland Fire Management Resources between Canadian and Mexican Participants” and also cited the “Memorandum of Understanding on Cooperation” on sustainable forest and wildland fire management between the province of Alberta and the State of Jalisco. The Director of Civil Protection displayed much interest in this initiative, remarking that he would like to engage Canadian counterparts in sharing best practices and assisting in joint-firefighting operations (e.g. taking advantage of the fact that Canada and Mexico have different forest fire seasons during the year). HOM recommended that the Director of Civil Protection get in touch with CONAFOR to encourage them to explain ways that Durango could benefit from this new government-to-government agreement. The Director of Civil Protection also suggested the possibility of collaborating in other areas such as search and rescue and the handling of hazardous materials. In discussing possible state-provincial cooperation, the Director of International Affairs noted that they had received some very preliminary overtures from Saskatchewan, and HOM remarked that the province of Saskatchewan has much in common with the state (e.g. in terms of geography and resources). HOM also touted the Canadian Fund for Local Initiatives (CFLI); encouraging meeting participants to seek out proposals in Durango - particularly given that there have not been any CFLI projects in the state to date. Finally, HOM cited potential opportunities for Durango’s citizens under Canada’s Seasonal Agricultural Workers Program (SAWP) and various educational programs. 4. Canadian Direct Investment On September 24, Ambassador Hradecky hosted a roundtable to have a frank, unhindered discussion with the Canadian business community in Durango and to obtain their views regarding the investment climate in the region. 07/01/2013 000058 $.15(1) - International Page 4 of 6 s.20(1)(c) With the exception of Linamar, all of Canada's largest investors in Durango participated in the meeting, namely: Canadian Pacific Railways, First Majestic Silver, Great Panther Silver, and PanAmerican Silver; as did representatives from junior companies such as Primero Mining, Excellon Resources and Esperanza Resources. As a reflection of Canada's presence in Durango, the discussion mainly focused on the mining sector. Companies acknowledged that while mining falls under federal jurisdiction in Mexico, "the industry could do more in ways of advocating the importance of the sector to authorities". While participants were in agreement that the state government offers relatively good access, TD/Cérat asked whether Durango's new reform to attract investment truly represents a game changer. Participants were in agreement that the current reform does mark a new era and that Durango now has a value proposition that meets the needs of the private sector. The Mazatlan-Matamoros highway axis can indeed become a viable alternative for small- to mid-size loads. For instance, studies have demonstrated that utilizing the Mazatlan port could prove more cost-effective than competing US-based ports such as Long Beach, California (the Mazatlan port currently has a capacity of 200,000 containers a year). Participants also used the occasion to discuss some best practices amongst themselves, including pitfalls to avoid in dealing with unions; noting in particular the 5. Natural Resources On September 24, HOM met with the Secretary of Natural Resources, Jestis Soto Rodriguez, and his Deputy Secretary for the Environment, Rigoberto Medina Herrera, for a roundtable discussion with close to 30 representatives from the forestry industry, including SEMARNAT (federal Environment ministry), CONAFOR, and forest and lumber associations. Secretary Soto explained that the state of Durango possesses a great variety of natural resources, including mining, agriculture, cattle farming, and forestry. HOM observed that parts of Durango’s countryside boast striking resemblance to Canada’s picturesque landscapes, with pine forests, rivers, lakes and valleys. Durango has the largest forest reserve in the country and an important softwood lumber industry. The state also has rich agricultural resources: it has a vibrant cattle-farming industry and is the birthplace of Mezcal. Durango is also one of Mexico’s main producers of gold, silver, and non-metallic minerals such as marble and quarry stone. While Canada’s commercial interests in the natural resources sectors in Durango are predominantly related to mining, the Secretary exclusively focused on the forestry industry during the meeting. Secretary Soto noted that, as. a result of the 2010-11 drought, the state of Durango has over 80,000 hectares of forests affected by pests. Pest- control management and forest firefighting are the two areas where his government would like to initiate partnerships with Canada. Some of the participants furthered that they would welcome technical collaboration with Canada, through initiatives similar to the training offered under the Alberta-Jalisco MOU. In particular, the Hinton Training Centre (Alberta, Canada) was recognized as a centre of excellence on forest planning, inventory & health; fire detection and suppression; fire management; and wildfire prevention and education. We learned that some 4-5 officials from Durango visited the Hinton Centre about five years ago and they would welcome reestablishing and obtaining more technical advice especially given new conditions in their forests due to the drought. Ambassador Hradecky explained that a "Canada-Mexico Arrangement for the Exchange of Wildland Fire Management Resources" was in the final stages of drafting and that through CONAFOR (Mexico's National Forestry Commission), Durango would be able to benefit from this arrangement. HOM also mentioned the existence of programs such as the Canada Fund for Local Initiatives (CFLI), including CDN $150,000 dedicated specifically for climate change mitigation and adaptation projects. TD/Cérat also expressed that much of Canada's world-class expertise in wood production, forestry management, and forestry firefighting originates from our private sector and that the Trade Commissioner Service could assist the industry in Durango should they be interested in considering cooperation in the commercial sphere. In this regard, a parallel was made with that has partnered with the Government of Durango to assist with reforestation efforts. The comment was well-received but the audience seemed to be interested more in (free) capacity-building cooperation than in private sector synergies. 6. Education On September 24, HOM met with the Secretary of Education of the state of Durango, Hector Eduardo Vela Valenzuela, for a roundtable discussion with close to 30 representatives from various educational institutions throughout the state (including university Chancellors). Following an opening address by the Secretary of Education and a video presentation on the education system in Durango State, HOM offered some introductory words about the education links that exist between Canada and Mexico, commenting that Canada represents an attractive destination for Mexican students with its safe and multicultural learning environment focused on world- 07/01/2013 000059 ae Page 5 of 6 class academic achievement. She noted that in 2011, approximately 9,000 Mexican students chose Canada as a study destination, making Mexico Canada’s 8th largest source of international students. HOM observed that this was the first time in recent history that Canadian Embassy officials visited Durango to discuss education and remarked that to her knowledge, there was currently little in the way of formal links between educational institutions in Durango and Canada; thus presenting a great opportunity. HOM provided a brief overview of various educational and work experience programs promoted by the Canadian Embassy, (e.g. Youth Mobility, Emerging Leaders in the Americas, Tres Idiomas and the IMAGINE Education Fair), which garnered much interest from meeting participants — as demonstrated by the number of follow-up questions. Participants’ questions focused mainly on questions relating to the visa process, and requirements regarding age limits and application time limits for specific programs. Representatives from the University of Juarez in Durango State voiced their interest in setting up interchanges between its professors and students with their counterparts at Canadian universities, to which HOM replied that the Embassy could assist in making such linkages. HOM also reiterated on several occasions her recommendation that participants attend the IMAGINE Education Fair that is taking place in February 2013 in four Mexican cities: Guadalajara, Querétaro, Leon and Mexico City. The Secretary of Education closed the session by noting his enthusiasm for the creation of such links with Canadian educational institutions and by remarking that Durango is “pushing to be the development centre of the North”; a strategy that he said could be bolstered by strong partnerships with Canada. 7. Outreach to Canadian community (Mennonites) On September 25, representatives from the Canadian Embassy in Mexico City travelled to Nuevo Ideal, Durango to meet with the local Mennonite community. These Mennonites originally emigrated from Saskatchewan in the 1920s and bought over 20,000 hectares in a valley two hours north of the city of Durango. Today, there are 8,000 Mennonites living in the state of Durango, 3,500 of which are estimated to be Canadian citizens. HOM was received . an intermediary who acts on behalf of the Mennonite community and the Embassy's consular section, primarily by providing assistance with the completion of passport and citizenship applications. [Note:The consular section of the Embassy has also developed a close relationship with Mennonite community leaders in Chihuahua, Durango and Zacatecas over recent years.] described a particular demographic and economic challenge for his and other Mennonite communities in Mexico. Family sizes are large (approx. 7 children per family), and the Mennonites devote themselves entirely to farming vs seeking employment outside the colony. As the colony has grown in numbers, the original land allotment has been successively subdivided to grant land to younger members of the community, to the point where the land parcels have become so small that they do not provide sustainable incomes to individual farmers. While the community does lease additional land from neighbouring ejidos (Mexican communal landowners) to graze their cattle, there is no room for expansion of the overall land allotment to the community. As a result, young Mennonites are, for the first time, exploring work opportunities either on neighbouring farms within the colony, or increasingly, going to Canada to work on farms ownd by distant relatives. The colony as a whole is also looking for large parcels of arable land to which they can move parts of their community. They have already purchased a plot of land in the state of Campeche where some 300 community members will move. The Mennonites expressed the importance for them of retaining Canadian citizenship while living in Mexico and expressed their appreciation for the on-going consular support and positive relationship they maintain with the Embassy. They made reference to the changes encompassed in Bill C-37 which came into effect in April 2009, essentially limiting Canadian citizenship only to the first generation born outside Canada. [Note: Pursuant to this Law, Children born outside Canada on or after April 17, 2009, will only be Canadian at birth if they are born to a Canadian parent who was either born in Canada or became a Canadian citizen by immigrating to Canada as a permanent resident and subsequently being granted citizenship (also called naturalization). This new provision affected most new born babies in the Mennonite communities. ] provided a tour of the Mennonite Colony, which exhibited a marked level of prosperity in contast to an otherwise poorer Mexican rural environment. The visit included a tour of a nursing home built by the community to provide care for community members who can no longer support themselves. HOM also had to opportunity to have coffee with a couple who were in the first generation to arrive in the Mennonite colony from Saskatchewan in the 1920s. The visit then included a tour of Queseria Holanda, a local cheese factory which directly employs 30 people and supports approximately 200 community members when also considering dairy farmers. The Embassy delegation also had the opportunity to have lunch with Mennonite leaders and management of Caja Solidaria, a co-op credit union which the Mennonites co-founded with their Mexican neighbours in Nuevo Ideal. Caja Solidaria originated as a co-op credit union for agricultural and cattle producers and has evolved to now 07/01/2013 000060 | | | / | | s.20(1)(c) Page 6 of 6 provide a range of financial services to both commercial and individual clients across the state of Durango and is the largest financial co-op institution of its kind in Mexico. Notably, Caja Solidaria has previously received training and support from The management of Caja Solidaria expressed their intention to seek further support from and to organize a visit to Quebec in spring 2013 with a view to strengthen their organizational capacity in order to expand further. 8. Comments / Relevance to Canada The visit of Ambassador Hradecky to Durango on Sept 23-25, 2012 contributed to reinforce Canada's profile in a key Mexican state. Through a series of high-level meetings with interlocutors of the Durango state government, local industry, Canadian investors, and Canadian community members on the ground, the HOM succeeded in strengthening institutional linkages towards a more vibrant Canada-Durango collaboration, namely in terms of investment, labour mobility, education, forestry management, and assistance through CFLI. More broadly, the visit served to strengthen the Embassy's dialogue with the state of Durango. Post is already following up on many cooperation opportunities, particularly vis-a-vis GoC programming such as CFLI, SAWP, Experience Canada, and Imagine! Education fairs. The trade relationship with Durango remains a very important one with regards to direct investment; this visit was important for continued access to, and support from, the Durango Government at the highest levels. Post will also follow-up and introduce the Government of Durango to Canadian companies operating in the greenhouse subsector and active in Mexico such as Looking ahead, there might be opportunities for the Embassy to work with Caja Solidaria in its endeavours with for example through a CSR project that would diversify from activities focused on extractive industries. 9. Press coverage. Press clippings below, and in attachments (courtesy of MXICO's media section). http://laguna.milenio.com/cdb/doc/noticias201 1/4cf1a28b338cb842d1202a18ee9ff1a7 s-en-durango/ -durango. html Drafted/released: MXICO-TD/Cérat, -GSRP/McLaughlin Consulted: -CS/Lépez Approved: HOM Hradecky Briefing notes & background material available on request. 07/01/2013 000061 : | | Proyecta Canad més inversiones y empleos en Durango, Pagina 1 de 1 Drange mrss rm 212 Proyecta Canada més inversiones y empleos en Durango Durango y Cana ncnon una colsoracibn sorte ates comer intrsclonal oportunidaes de inversion y ‘ispleo, trams, eduction y core, Byer teins pa de un enero aurcta entre al geberandor Jorge Hera ‘hier ys emafucore canadinse sara Sutan Hrndecy aursment eta aca de sper eran de enc y ten, ar sre aa recente cn | ‘ots cnn tm preccomartn su sera i ura Port Pe anus ae raga pes igre cr Dureme-Mecaan, el Cente Logistco Indunval de Curengo {CID}, ie puna etacien de frac, of Pert Seco yf Zone ae seer empresa dean seared ea oven erg. ‘or bles I Embaaora Ge Caad on Mba alters ave Diana Mog 5 tengo ms ‘mera et rnd wl eto apart soe eros Cols an sa at bl 4 me edgar “crater de grracin does, iat otros oto an sede an uso Egy 627m ws | nore S5 enor de capt econ incaron pjesma en oar re, sa, Por pte n sinor S Susan Hack he que Card rca pale ue meh io en Daan os ns ‘or, snre ado onal nrs, pao ya st ema anasan in one Conan en rene pre cite a sue anor oie sian mopar suspense to aes “estoy sense gu at emer sa ui east opti dere y erro cre eager Cal ose pre mc ce aria’, ars Haar Coe, seer que Como lad, se gables gir ea alder Se ‘ete ements an embaars de onds pis mi eta del mr, sation dn Vleet: Poscrt es an Duan Avalos Méndor a Owectora de Asis intenaconales, Haris Elen Casts Citing; Oscar Sncher Ventvewsb, Oelgsto de huip://www-elsiglodedurango.com.my/noticia/397478.proyecta-canada-mas-inversion... 25/09/2012 ‘000062 070, 25.09.2012 | Opinion > Contrarreloj | lsmado “reloj palamemario” lo solicona todo, a ea Jona de Coori- cin Plitcn dela Camara de Y coordinador de Is acid del PAN, Las ‘Alberto Villareal, anunei6 el acuerdo de ‘que I sesin del proto jueves 27 sea ‘Brdticarente inden, a fin de que los le Bisladores poedan cumplir con el mandato ‘onsttiiona de la incatvs peeferente, ex ‘este caso la reforms labora propuesta pore presidente Felipe Calderén, Dejar um plazn sin Tite para reviser y > LA EMBAJADORA de Canad, Sa Hradecky, y el gabernador de Durango, Jorge Herrera. REPUBLICA CContindaonsigionto ja 238, 2aorz0v2s ‘000065, 238. 35.09.2012 Repablica Durangoy Canada aumentan relacién comercial En este marco, ante la presencia de la embajadore de Canadé, Sara Suzan Hradecky, al hacer uso de la palabra, el gobernador Jorge Herre- ra Caldera manifests: “estoy seguro que este encuentro seré una exce- lente oportunidad de fortalecer y estrechar lo lazos de cooperacién entre Canada y Durango ‘Yes que con estacolaboracén bis ‘eral, serdn mayors las oportunidades ‘para ambas pares en materia de co- ‘mercio Intemacional,inversin y em plo turismo, educacién y cultura, Este acuerdo de cooperacién in- ‘lira ademés el intercambiode cen Gay teenologl asfcomo otts temas relacionados con la agricutura, el sector foresaly el medio ambiente. Este convenio se frmé precisa- ‘mente a una semana de que la tras- nacional Ports to Plains anuncié que ‘Durango podria integrase como so clo del Comredor Econémico Est os Unidos-Canadé, en virud de su reciente infraestructura, principal- _mente porla autopista Durango-Ma zalén, el Cento Logsticoelndustia) ‘deDurango (CLID) lanuevaestacién e ferrocari el Puerto Seco y la Zo na de Conectvidad de La Laguna El Sol be Mexico io Pigs 2 80 2 20120925, ‘000066 s2ttixay Page 1 of 3 MacCallum, Caitlin -GNC From: Brendan Cahill cahill@excellonresources com] Sent: July 25, 2012 4:30 PM To: Cerat, Alexandre -MXICO -1D Subject: Interaction ID 1-9WGOSS: Re: Possible confrontation between gray union and ejido ‘Thanks Alex, Latest update is that the state govt has managed to halt the gray union's march, by committing to order the Ejido tomorrow that the blockade must be lifted. I will also be attending that meeting in Torreon (unless there is a large union presence there - right now we have no stance regarding either union). A positive development, perhaps, but we'll have to see tomorrow. Tl let you know if anything else develops. As I noted, we need this situation to be sorted before next week. Tl be back in Mexico City on Friday to meet with the federal Minister of the Interior at Spm. Best Regards, Brendan On 2012-07-25, at 3:24 PM, "Alexandre,Cerat@international.ge.ca” wrote: Dear Brendan, Further to consultations within the Trade section of the Embassy, we've recalled similar situations in recent years where a confrontation between disgruntied workers and mine blockaders led to violence. Despite mining companies best efforts not to associate with the confrontation, companies have often bare the blame in the public eye, and elements of civil society ‘and media have accused the companies of being responsible for the violence by sponsoring “mine thugs ‘Such altercations, and accusations, have unfortunately too often resulted in a public relation 2013/01/07 ‘000067 Page 2 of 3 From: Brendan Cahill (mailto:bcahill@excellonresources.com) Sent: July 25, 2012 10:42 AM To: Cerat, Alexandre -MXICO -TD Ce: Bishop, Dexter -MXICO -TD; Peter Crossgrove ‘Subject: Interaction ID 1-9WGO7N: Fwd: EXN - Meetings with State Government, Alex, Thanks for your contact details. I've forwarded the notes below to update you on yesterday's meetings. Note that the actual number of demonstrators is about 120, ‘comprising gray and white union members and a number of townspeople. I also understand that they are marching on the mine as | type, escorted by the state police. Please let me know when you have had a chance to review and have a moment to speak, as 1 would like to discuss the current situation further with you. Best Regards, Brendan Begin forwarded message: ‘On Jul 24, 2012, at 9:58 PM, Brendan Cahill wrote: Peter, Some interesting developments this afternoon/evening. As discussed earlier, we met with the Minister of the Interior this morning, along with Eduardo Silva and Salvador. We met with them again in the early afternoon and advised them that we would agree to meet with the Ejido in Torreon tomorrow (Wednesday). The SG is effectively looking to confirm "due process" so that it can move to a secondary stage, which may involve the removal of the blockaders. The Governor (who is seeking a resolution as quickly as possible) was looking for the SG to try to bring us and the Ejido together one last time to confirm that a resolution by negotiation alone at this stage is impossible. We were very clear that we do not intend to negotiate while the blockade is in place. We would, however, discuss the items that could (trucking, cafeteria, etc) or could not (increased rental fees) bbe negotiated once the blockade was lifted, and try to convince the 0 to lift the blockade so that we might return to negotiations in good faith, The SG was completely in support of these limits on what we would say/agree at the meeting. 2013/01/07 ‘000068 2013/01/07 Page 3 of 3 Later in the evening, we met with the Minister of Labour and the Undersecretary of the Interior. The primary purpose of the meeting was to (a) update the ML regarding the current situation and (b) suggest that his presence at tomorrow meeting wasn't optimal, as we do not want to confuse or mix the Ejido and Union issues, We very particularly did not want any union reps at the meeting tomorrow, and would likely refuse to attend if any were there. During the meeting (around 7 or 8pm), we were informed that the Ejido and ProDESC now wish to meet on Thursday, rather than tomorrow (Wednesday). I don't think we were given a straight answer as to why. Problematically, Eduardo cannot make a ‘meeting on Thursday. Our proposed solution, and this needs further discussion with you in the morning, is that I will attend the meeting without Eduardo ‘on Thursday in Torreon - though with, probably, Marisa, or someone else from the mine, to help with translation. I will simply deliver our message - that we cannot negotiate while there is a blockade in place, that there are a number of items that we can. progress with further negotiation, and that we hope the Ejido will remove the blockade so that we can continue negotiating in good faith - Eduardo and I will work on further specifics in the morning. ‘As my Spanish is rusty (or non-existent), we won't be inevitably drawn in the very negotiations we are trying to avoid, but we will have satisfied the "due process" that the SG looks to be seeking. As noted, we should discuss this approach first thing in the morning, Two key points: both the Minister of Labour and the Undersecretary of the Interior stated very, very clearly that the Governor was completely aware of the situation, wanted a resolution as quickly as possible, and under no circumstances would countenance the loss of the mine and/or the associated jobs. | can't express by email how explicitly they stated this. Also, the Gray Union is organizing a 400 person demonstration tomorrow in Bermejillo or Palacio, which may help our case on Thursday as demonstrating the community and worker disfavour of the ongoing blockade - this may indirectly have been why our meeting with the Ejido was moved to Thursday. Eduardo - please fill in any key points that I may have missed. Talk to you in the morning, Brendan ‘000069 Page | of 6 s.19(1) MacCallum, Caitlin GNC From: Peter Crossgrove [ Sent: August 9, 2012 7:26 AM To: —_Cerat, Alexandre -MXICO -TD Ce: Brendan Cahill ‘Subject: Fwd: va desplegado For your info.p Begin forwarded message: From: ! Date: 9 August, 2012 1:11:25 AM EDT. To: "Peter Crossgrove™ Subject: RE: va desplegado If the email is genuine (I see no miners as signatories as suggested in his email) and not prompted by us or our consultants and not otherwise subject to challenge, it is a major testament. If not, we should archive the whole thing, My suggestion is that we should ask the government agencies to whom the email is addressed to give us their immediate response failing which we propose to release an independent, certified translation of the email (no offense to!) to a variety of news media (with an emphasis on Mexican media). From: Peter Crossgrove [mailtc Sent: August-08-12 2:33 PM To: | Subject: Fwd: va desplegado Begin forwarded message: From: Brendan Cahill Date: 8 August, 2012 5:20:47 PM EDT To: "Peter Crossgrovet 4 , “Joanne C. Jobin" , Rob Moore 2013/01/07 ‘000070 2013/01/07 s.19(1) Page 2 of 6 Cer s Pablo Gurrola com>, Rocio Zavala urces.com>, | 2013/01/07 ‘000075 .19(1) Page | of 4 MacCallum, Caitlin -GNC From: Peter Crossgrove Sent: July 31, 2012 7:34 AM To: erat, Alexandre -MXICO -TD Subject: Fwd: EXN ‘Thanks for your help some info on PRODESC Forwarded message Date: Tue, Jul 31, 2012 at 2:17 AM Subject: Re: EXN - ProDESC Info , rzavala@excellonresources.com, jjobin@excellonresources.com, Te ; ; A: Pablo Gurrola : : Peter Crossgrove ,Rob Moore Rocio Zavala ,"Joanne C. Jobin" ‘, Guys - any word at all regarding the federal meeting in Torreon today? Can we confirm that it actually 2013/01/07 000077 5.19(1) Page 3 of 4 took place? Also, ! the info below may be of a bit of interest to. as well. On 2012-07-30, at 6:20 PM, Brendan Cahill Date: 16 August, 2012 10:57:59 AM EDT To: Brendan Cahill Ce: “Joanne C. Jobin" Subject: Blockade forces Excellon to shut Platosa mine _ The Northern Miner Dear all, As per Jo's request, please find attached the article published on the Northern Miner on Aug.14, 2012. Best regards, Rocio Rocio Zavala Executive Assistant Excellon Resources Inc. E_ rzavala@excellonreso W ExcellonResources.com T 4163641130 F 416 3646745 IMPORTANT NOTICE: This message is intended only for the use of the individual or entity to which it is addressed. The message may contain information that is privileged, confidential, and exempt from disclosure under applicable law. If the reader of this message is not the intended recipient, or the employee or agent responsible for delivering the message to the intended recipient, you are notified that any dissemination, distribution, or copying of this communication is sirictly prohibited. If you have received this communication in error, please notify Excellon immediately at 2013/01/07 ‘000085, Page 2 of 2 Esta transmisin es para uso exclusivo de la persona o entidad a quien esta dirigida, y puede contener informacién privilegiada o confidencial que por ley no puede ser divulgada. Por favor, tenga en cuenta que cualquier divulgacién, distribucién 0 uso de esta comunicacién 0 cualquiera de sus adjuntos esté totalmente prohibido. Si usted recibe por error este correo electrénico, por favor comuniquelo inmediatamente a Excellon a 2013/01/07 ‘000086 NORTHERN MINER The Global Mining Newspaper DAILY NEWS Aug 14, 2012 7:35 PM - 0 comments Blockade forces Excellon to shut Platosa mine 2012-08-14 VANCOUVER — Excellon Resources (EXN-T) continues to be plagued by labour and community issues at its Platosa mine in Mexico's Durango State, with the company recently forced to suspend operations. ‘On August 8 the company declared force majeure on its concentrate delivery contracts because of an ongoing blockade at its mine that started on July 8. The company states that the local communal landowners group known as the Eyido de La Sienita started the blockade, with assistance and funding from the non-govermmental organization Project on Economic, Social and Cultural Rights (ProDESC) and the union Sinaicato Nacional de Trabejadores Mineros Metalurgicos, Siderurgicos y Similares de la Republica Mexicana, afiliated with the United Steelworkers Union of Canada. The blockade relates to a dispute over a land rental contract from April 2008, The local landowners are calling for the ‘company to comply with provisions of the deal that include community contributions, construction of a water treatment plant, granting of concessions, and ‘tair rental prices’ for the land. ‘The 2008 contract was itself reached atter a three-month blockade by the landowners, upset with an initial contract signed in 2004. The landowners say they have been trying to reach a new agreement with Excellon since November 2011, and had a meeting scheduled with the company for July 6. When the meeting was cancelled shortly before the date, the landowners decided to blockade the mine, ‘000087 Further complicating the situation is the existence of multiple unions fighting for control over the workforce at La Platosa. The Sindicato Nacional de Trabejadores Mineros Metalurgicos, Sideruigicos y Similares de la Republica Mexicana looks to have sided with the local landowners on this issue, while the competing Proyecto de Derechos Econdmicos Sociales y Culturales A.C. Sindicato Nacional Minero, Metalingico Don Napolen Gémez Sada union, has allied with the company. Excellon, which employs no priate security in the country, has asked government oficials to enforce criminal charges for trespassing laid against those at the blockade, but the government has yet to act on the matter. The blockade, initially consisting of some 70 landowners, is reported to remain peaceful. The mine is on care and maintenance as the blockade continues. ‘As to operations at La Platosa, for the three months ending June 30 the company reported net income of $478,000 and a total comprehensive loss of $826,000 from production of roughly 374,000 oz. silver and 6,5 million Ibs. lead and zinc. Cash operating costs per oz. of siker, net of byproduct credits, came to $4.25, with ore grades of 825 grams per tonne silver, 7.07% lead, and 13.52% zine. As of a July 2011 resource estimate the Platosa project hosts 637,000 tonnes grading 836 grams silver, 8.95% lead, and 10.58% zine, plus inferred resources of 69,000 tonnes carrying 1,011 grams silver, 11.36% lead, and 11.34% zine. Just before the blockade news broke Excellon had reported it had hit ‘source style’ mineralization in hole EX12LP- 1019 on the Rincon del Caido area northwest of the Platosa mine. The hole hit a 55.5-metre interval grading 132 grams silver per tonne, 3.13% lead, 1.74% zinc, and 0.075 gram gold per tonne. The company reports that this is the first time it had encountered persistently anomalous gold at Platosa, which suggests increasing proximity to the ‘source of the high-grade Platosa mantos. Excellon is now trying to connect the new mineralization to Platosa, with three rigs now deployed to the Rincon del Caido area. (On August 10 Excetion appointed Rupy Dhadwar as chiet financial oficer after the sudden resignation of Steve Poad. Dhadwar has been the company’s corporate controller since 2010. The appointment comes not long atter the ‘company appointed Brendan Cahill to the position of executive vice-president, and roughly two months after Jeremy ‘Wyeth stepped down as chiel executive officer of Excellon, after which executive chairman Peter Crossgrove stepped in as interim CEO. Excellon’s share price has been under pressure since the blockade started, falling from a brief run up to 71¢ on July 9 to as low as 35¢ in recent days. The company has 275.9 milion shares outstanding. © 1918 -2012 The Northern Miner. All Rights Reserved ‘000088 Page 1 of 2 MacCallum, Caitlin GNC From: Robson, Wayne -MXICO -TD Sent August 29, 2012 5:12 PM 1 Hradecky, Sara -MXICO -HOMICDM ce: Cerat, Alexandre -MXICO -1D; Anderson, Mary -MXICO -GR Subject: FW: EXCELLON PROVIDES UPDATE INFORMATION REGARDING LA PLATOSA ILLEGAL ACTION Attachments: NR25.pdf Ambassador, We have a request fo ensure that the attached information is forwarded to Ambassador Barrio with the advice that tomorrow the decision wil either be taken to fully reopen the mine, or fully shut it down on’ care and maintenance. As you know, the company accessed the mine today with the assistance of the Federal, State and Municipal police as well as the military. They will not, however, be likely 10 maintain a presence moving forward so there must either be @ negotiated solution with the Ejido or a shut down. The atfached News Release is quite hard hiting and direct, particularly in respect to their views of ProDesc and the union, Best it makes its way to the Ambassador in advance. Shall we send it on your behalf. or would you wish to send it? Wayne From: Robson, Wayne -MXICO -TD ‘Sent: August 29, 2012 4:00 PM To: ‘Brendan Cahill’; Cerat, Alexandre -MXICO -TD Ce: Peter Crossgrove ‘Subject: RE: EXCELLON PROVIDES UPDATE INFORMATION REGARDING LA PLATOSA ILLEGAL ACTION Thank you Brendan. We wil provide this fo Ambassador Baitio, likely Via Ambassador Hradecky here at the Embassy. Wayne : Brendan Cahill [mailto:beahill@excellonresources.com] Sent: August 29, 2012 3:54 PM To: Cerat, Alexandre -MXICO -TD; Robson, Wayne -MXICO -TD ‘Subject: Fwd: EXCELLON PROVIDES UPDATE INFORMATION REGARDING LA PLATOSA ILLEGAL ACTION ‘Alex and Wayne, Can you please make sure the Mexican Ambassador to Canada receives this? We will be following up 2013/01/07 ‘000089 Page 2 of 2 with a release tomorrow either announcing the reopening or providing a letter to shareholders that we are putting hte mine fully on care and maintenance and suing the Ejido for recission of the property This will be dependent on the government's actions this evening/overnight. Thanks, 2013/01/07 ‘000090 €} EXCELLON FOR IMMEDIATE RELEASE: AUGUST 29, 2012 Toronto Stock Exchange — EXN No. 25—2012 EXCELLON PROVIDES UPDATE INFORMATION REGARDING LA PLATOSA ILLEGAL ACTION Toronto, Ontario - August 29, 2012 - Excelon Resources Inc. (TSX:EXN) (“Excellon” or “the Company") today provided the following background information on the illagal action at the Company's La Platosa mine. Background on Excellon’s Platosa Property Excellion is the highestgrade silver producer in Mexico from its 100% owned La Platosa mine in the state of Durango. The Company produces sive, lead, and zinc ore at La Platosa, which is then trucked to the Company's Miguel Auza mill operations in the state of Zacatecas. On July 8, 2012, members of a local communal land ownership group, the Ejido de La Sierrita (the Ejido), under the direction of a non-governmental organization, ProDESC, and with the assistance of certain union ‘members, commenced an illegal blockade of La Platosa, The following provides background information regarding the source of the blockade, the Ejido and ProDESC. Key points: + ProDESC acknowledges that it is associated with Sindicato Nacional de Trabajadores Mineros Metalirgicos, Siderirgicos y Similares de la Republica Mexicana (the "USW Union’), a United Steel Workers ("USW’) affiliated union, and has represented the USW Union at various meetings with state and federal governments. + For the past 12 months, the USW Union has attempted to force itself upon La Piatosa mine workers, including an attempt to coerce the Company into accepting the USW Union as the Mine's sole union in contravention of Mexican labour laws + Ata vote held on July 5”, immediately prior to the commencement of the blockade by the Ejido, approximately 60% of workers at the La Platosa mine expressed their support for unions other than the USW Union. + The blockade was immediately recognized as illegal by local and state governments, and criminal charges for trespass were laid against the blockaders. These remain outstanding. + ProDESC’s website (see www.ProDESC.org.mx/english) endorses and encourages illegal actions, while also stating that a key objective of the group is self-perpetuating funding. + ProDESC’s stated ideological objectives and reliance on funding from unions undertine its tack of expertise in the very fields — small business development and commercial contracts - that would serve its supposed “clients” best and revitalize the Ejido community. + Further, while ProDESC purports to act in the name of human rights, the Ejido actually living in the community number only 25-30 persons, while the illegal blockade has severely affected the livelihoods of almost 300 Excellon workers, numerous third party workers, and an estimated 380 local families that rely ‘on direct and indirect income from La Piatosa. + Excellon does not require the Ejido's surface rights to either (i) continue producing silver and growing the mineable resource at the La Platosa Mine, or (ji) continue effective exploration programs elsewhere on the La Platosa Property, including on the promising Rincon del Caido target. =XN Excellon Resoutces lnc Suite 900-20 Victoria Steet. Toronto. Ontario. Canada, MSC 2N8 T:4163681130 Fi 416.364.6735 W; ExcellonResoutees.com ‘000091 Status of the Illegal Blockade ‘The Company has the full support of the state and federal governments and is working closely with them to end this action as soon as possible so that the workers can return to the mine and resume thelr livelihoods. The Company ran out of its stockpiled ore at Miguel Auza shortly after the blockade and has not been in production since. Mining and exploration activities at La Platosa have been suspended and the mine remains on care and maintenance USW Union Interest in the Illegal Blockade Although superficially an Ejido related dispute, the Company understands that the real root of the illegal blockade action, and the reason for the USW Union-funding of the action, is an attempt by that union to gain control of the La Platosa mine, against the expressed will of the majority of the mine's workers and in contravention of Mexican, labour laws and regulations. Since 2005, the mine workers at La Platosa have been represented by the Sindicato Nacional “Presidente Adolfo Lopez Mateos” de Trabajadores y Empleados del Comercio en General y Escuelas Particulares, Similares y Conexos de la Republica Mexicana, a nationally certified union that has been in existence for over 30 years and represents approximately 1,500 workers in mining and various other industries across Mexico. On July 5, 2012, a vote was held to select the representative union at La Platosa. As required by state and federal labour laws, representatives of the Ministry of Labour were in attendance as were officials of each union involved. The certified results of the vote will not be official until the Labour Authority completes the formal tabulation process as per the requirements of Mexican labour iaw, but the Company understands that the election did not favour the USW Union, with over 60% of workers voting for other unions. The illegal blockade commenced three days later, supported by the USW Union, The Sindicato Nacional Minero Metalirgico Napole6n Gémez Sada, which represents approximately 5,200 workers in many of Mexico's major companies and is the USW Union's primary rival in Mexico, won the most votes based (on initial results from the July 5" election. Excellon is committed to support the union elected by the employees of La Platosa as certified by the Labour Authority in due course. Who are the Ejido? In the Mexican system of government an “ejido” is an area of communal land ownership (surface rights only) nominally used for agriculture. Within the law there is provision for individual community members (Ejidtarios) to possess and farm a specific parcel and hold tile to the surface rights of such parcel. Ejidos are registered with Mexico's National Agrarian Registry. Today, some Ejiditarios still farm the land, though many others have become business leaders in their states and ‘communities with the development of hotels and other commercial buildings and endeavours on their collective lands. Excellon’s relationship with the Ejide de La ierrita Community Historically, Excelion has been a strong partner of the Ejido community and the Ejido make up approximately 12% (30 of 250) of the La Platosa workforce. Excellon holds @ 100% interest in the underlying mineral rights on the Ejido property, with the Ejido holding the surface rights, The current lease agreement between Excellion and the Ejido for 1,100 hectares of surface rights provides a compensation scheme that is widely considered to be one of the most generous paid to any similar landowner group in Mexico. The surface rights are rugged, semi-desert terrain that is generally non-arable. The agreement was finalized and ratified in 2008. ProDESC provided support and counsel to the Ejido during the =XN ‘000092