Consolidated Zinc Limited announced on 3 December 2019 it had terminated the mining contractor, Caminos y Construcciones Ganti S.A. de C.V. (Ganti), at its Plomosas Project which is 100% owned by the Company's Mexican subsidiary Minera Latin American Zinc S.A.P.I de C.V. ("MLAZ"). The Company's decision to terminate the mining contract with Ganti, was a result of an annual review of the contractor's performance and productivity, and a review of their progress claims which identified significant overcharging and their underperformance at the Plomosas mine. MLAZ has disputed the cost claims submitted by Ganti, which in MLAZ's opinion are not in accordance with the mining contract. Rather than follow the contractual conflict resolution scheme, Ganti submitted legal proceedings in the Federal District Court of Mexico ("the Court") against MLAZ. Ganti's submission to the Court claims final costs outstanding of Mexican Peso 23,632,639 (inclusive of 16% VAT) (approximately USD 1,255,719). MLAZ's audits and review have identified a substantially lower sum than this. This legal proceeding enables Ganti to appoint a finance professional, whose role would be to conduct a monthly review of the MLAZ financial reports, to identify surplus cashflow to be paid and held by the Court to guarantee payment of the disputed amounts. This was authorised by the Court, in as much as Ganti was required to place a bond with the Court to guarantee any eventual damages that could be caused to MLAZ as a result of the legal claim and bond requirement. Under Mexican Law, MLAZ has the right to place a bond with the Court for the claimed amount, which can either be satisfied in cash paid to the Court or by guarantee ("the Bond") in order to prevent Ganti from exercising its right to appoint a finance professional to conduct a monthly review of the MLAZ financial reports. MLAZ has been advised by its Mexican lawyers there is no deadline determined to place the Bond with the Court. Notwithstanding the above, MLAZ has the right to appeal the right of Ganti to appoint a finance professional and the review of MLAZ's monthly financial reports. MLAZ believes this claim to be frivolous and unsubstantiated and intend to vigorously defend this position. MLAZ is in discussions with a Mexican based entity, MGX Meouchi, a bond gent who provides guarantee facilities of this nature for legal disputes to meet the Bond requirements. This Court decision came as a surprise as Ganti and MLAZ were working to finalise all outstanding matters in accordance with the contract. MLAZ was not informed of any application to the Court or of the Court's decision until the 200+ page order had been issued and delivered to MLAZ. The Mexican legal system is based on French Napoleonic law, which differs significantly from English based legal systems. Legal disputes of this nature can take more than one year to resolve and there can be no reliable timeframe for resolution of the Bond or the disputed final amounts due under the mining contract unless agreement is reached sooner. Whilst MLAZ continues to seek to negotiate in good faith with Ganti, it will vigorously defend the Ganti claim. The Plomosas mine operations continue to operate with owner mining being undertaken and this ruling currently does not impact the mining operations or production. The Company will continue to keep shareholders fully informed as this this legal matter progresses.