Durango State Government Clarifies That Ejido Conflict is Unrelated to Labour Unrest in the Mine.

Mexico City, Mexico - The Ejido La Sierrita has entered its second week in peaceful protest of Excellon Resources, Inc.'s La Platosa mine in Durango, Mexico. The Ejido protest has ceased all operation in the mine.

The company, in a press release Monday morning, continued to make unsubstantiated claims that the Ejido and its members are able to maintain their protest because they are remunerated by union officials. "We have had an ongoing relationship with the mine for six years that has to do with our land rental contract," said David Espinoza, President of the General Assembly of the Ejido La Sierrita, "We do not receive money from any union. The Company is simply trying to deflect attention from its own failure over the last year to work with the Ejido. We find this to be very irresponsible. Instead of sitting to talk with us to resolve this matter, the Company continues to avoid the main issues at conflict."

The Ejido president repeated the fact that the Sindicato Nacional de Trabajadores Mineros Metalúrgicos, Siderúrgicos y Similares de la República Mexicana (SNTMMSSRM) are allies with the Ejido and are in solidarity with the Ejido's struggle. Nonetheless, he clarified that, as with any Ejido decision, this protest was solely the result of an almost unanimous vote by the Ejido's voting body of communal landowners, the General Assembly, and their demand was an equal and just relationship between the Ejido and Excellon.

The State Government has also clarified that the Ejido protest is not led by workers or labor unions. In a recent news report by the newspaper "Contexto de Durango", the Durango State Labour Secretar, Arturo Yáñez Cuellar, agreed that this "is a [community] matter, and not a labor issue" and made clear that the State Government has arranged for payment of workers while the Company and Ejido resolve the land rental conflict. "The employment situation is totally independent from the Ejidal matter . . ."1

The Company also falsely claims that the Ejido, advised by the non-governmental organization Proyecto de Derechos Económicos Sociales y Culturales, A.C. (ProDESC), refuses to meet with the government. "On the contrary, the Ejido and ProDESC have been in constant contact with various government officials over the last week urging their intervention. In fact, on Monday morning, we met with government officials to talk about the conflict and it was the Company who refused to send a representative. It is the Company that has refused to come to the table." Said Alejandra Ancheita, Executive Director of ProDESC.

"Excellon continues to keep its shareholders in the dark regarding its own responsibility in this unfortunate turn of events. We only hope that Excellon management will come quickly to resolve this matter with the Ejido so that both parties may move forward to benefit mutually from the La Platosa mine," said Mr. Espinoza. The company's handling and disclosure of material risk information related to the community conflict was the subject of a recent request for investigation submitted to the Ontario Securities Commission by the Justice and Corporate Accountability Project (JCAP) on July 13, 2012.

Background Information:

In 2008, after three months of conflict between the company and the Ejido, the two parties signed a new land rental contract which included important progress for both parties. The contract also established clauses in which the company was obligated to contribute to development projects for the Ejido that would better the quality of life of the community.

Nonetheless, in the last four years, the company has failed to comply, and has even violated, the clauses of this agreement. The Ejido members have tried to sit with company representatives and review the violations of the land rental contract to resolve the conflict since November of 2011 without success.

"Ejido members were forced to initiate this protest after almost eight months of attempts to dialogue with Excellon to resolve several non-compliance and violations of the land rental agreement that it signed with us in 2008," said Daniel Pacheco, Ejido member. "It is unfortunate that a company that earned 30 million dollars in gross profit in one year, largely from the La Platosa mine, can't make the minimal commitment to support development of our community," he added.

The Ejido General Assembly, after exhausting its efforts at dialogue and due to the unwillingness of the company to work together, decided to exercise its legitimate right to peacefully protest the company's La Platosa operations. The Ejido hopes that the company will comply with the clauses of the land rental agreement including its obligation to build a water treatment plant for water expelled from the mine, the granting of concessions for transportation of minerals and food services in the mine, just rental payments, among others.

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Contact: Alejandra Ancheita, ProDESC (Proyecto de Derechos Humanos, Económicos, Sociales y Culturales), (tel) +55-5212-2230, +55-5212-2229, +55-3334-6045, alejandra@prodesc.org.mx