Almaden said a Mexican court had rejected its appeal, objecting to the reinstatement of about 7,000ha of claims it had previously dropped from the original claim block.

"The company is currently waiting to receive the reasons for this judgement in order to plan next steps," it said.

Almaden had previously filed two administrative challenges, based on Mexican legal advice that it could not be forced to own mineral rights it had formally dropped.

The company has been in a legal battle for several years over its bid to virtually halve the size of its Ixtaca land package to about 7,200ha, with the process holding up environmental permitting last year. A separate court decision in September found Mexico's environmental authority could resolve the permit application.

Almaden stressed it still held the same exploration and mining rights over the Ixtaca gold-silver project but the area was now 7,000ha larger.

It said it could not access the Ejido Lands of about 330ha at the southeast of the original claim block, in an area it had sought to drop, and said the Lands did not overlap the Ixtaca project or its environmental or social area of impact.

"We were hoping to be able to reduce our mineral claims in order to demonstrate that we have no interest in any mining or exploration activity in the area of the Ejido Tecoltemi," founder and chairman J Duane Poliquin said.

"However, the agents of the Ejido have to date prevented us from doing so, in order to allow them to continue with a case against the government of Mexico.

"This case is seeking to reform the current system of mining concessions by provoking third-party litigation involving mineral titles legally granted to companies such as Almaden.

"While we continue to study and understand the reasons for this judgement, we are also working to advance the project through ongoing permitting and exploration efforts."

A December 2018 feasibility study for Ixtaca had outlined initial capex of US$174 million, after-tax NPV5 of $310 million and IRR of 41%.

It estimated average annual production of 90,800 ounces of gold and 6.14 million ounces of silver over the life of mine, at an all-in sustaining cost of $850/oz gold-equivalent.

Almaden raised just over C$2 million in a placement at 65c per unit in August, for permitting activities at Ixtaca and general corporate purposes.

Its shares (TSX: AMM), which peaked at $1.60 in November, fell from $1.28 to 84c intraday.

They closed down 27.5% to 95c, to capitalise it at $114.6 million (US$88.7 million).