Sarama Resources issues notice of intent to submit claims to arbitration
Yahoo finance | 30th November 2023
By Sarama Resource
Sarama Resources Ltd, advises that it has formally notified the government of Burkina Faso, of the existence of an investment dispute between the Company and Burkina Faso in relation to the government’s withdrawal of the company’s rights to the Tankoro 2 Exploration Permit.
Notice of intent to submit claims
On 29 November 2023 the Company delivered to the Minister of Energy, Mines and Quarries of Burkina Faso (the "Minister"), a Notice of Intent to Submit Claims to Arbitration ("Notice of Intent") under the Agreement between the Government of Canada and the Government of Burkina Faso for the Promotion and Protection of Investments (the "BIT").
The dispute arises out of certain acts and omissions of the Government in breach of the BIT and international law, relating to Sarama’s investment in the Sanutura Project (the "Project") located in Burkina Faso.
Permitting history of the Tankoro 2 exploration property
Sarama commenced exploration activities on the Project in 2010, conducting its initial activities on the Tankoro Exploration Permit (the "Original Permit"). The Original Permit was granted in November 2008 and the Company acquired, by commercial agreement, the rights to the Original Permit in January 2011. The Original Permit was subject to statutory renewals in 2011 and 2014, followed by an exceptional renewal in 2017. The Original Permit expired in December 2020, after which time it underwent a full re-issue process. On 24 November 2021 the Minister granted Sarama the Tankoro 2 Permit, which substantially covered the same area as the Original Permit and invited the Company to pay the grant fee. The Company paid the grant fee within the requisite timeframe and was issued a receipt for payment. The Company expected to receive the arrêté (or title certificate) from the Minister in due course, as was customary following payment of the grant fees.
Origin of dispute
On 31 August 2023, the Company received notification (the "Notification") from the Minister that the Company’s application for the Tankoro 2 Permit, received in August 2021 and approved in November 2021 (resulting in the granting of the Tankoro 2 Permit to Sarama), had been purportedly "rejected", which was inconsistent with, and contradictory to, prior formal correspondence from the Government. Sarama advised the Government that since the Permit had already been granted, it could not be rejected.
On 6 September 2023 during his public presentation at the Africa Down Under Mining Conference in Perth, the Minister, Simon-Pierre Boussim, stated that the Tankoro 2 Permit was available for purchase. Based on the notification from the Minister and his subsequent actions, the Company has been forced to interpret the Minister’s letter of 25 August 2023 as withdrawing the Company’s rights to the Tankoro 2 Permit. The Minister has not responded to subsequent correspondence from the Company on the matter.
Basis for claims to arbitration
The Tankoro 2 Permit pertains to the Tankoro Deposit which was the central component of the Project and contained 85% of the Project mineral resource. A preliminary economic assessment on the Project was in progress and due for imminent completion and release; however, following receipt of the Notification, this study and all work on the permit was suspended.
The unlawful withdrawal of the Tankoro 2 Permit by the Minister, resulting in the removal of the rights to the land conferred thereunder, has effectively rendered the Project valueless to Sarama, consequently destroying the value of the Company’s investment in the Project.
Notice of intent to pursue claim and forward process
The Notice of Intent is necessary to preserve Sarama’s rights to initiate arbitration should a resolution with the Government not be reached. The filing of the Notice of Intent initiates a 60-day consultation period between the parties during which time they are to attempt to amicably settle the dispute. If no amicable settlement is reached in this period, then Sarama will have no alternative but to initiate international arbitration proceedings in accordance with the BIT between Canada and Burkina Faso.
The Company will seek full compensation for the loss suffered which may include, but will not be limited to, the value of the Tankoro 2 Permit, the value of the Company’s historic investments in the Project, the value of the Project at the time the Tankoro 2 Permit was withdrawn and damages the Company has suffered as a result of the Government’s actions.
The Company will file a material change report setting out the full text of the Notice of Intent, which will be available under Sarama’s profile on SEDAR+ at www.sedarplus.ca and on ASX at www.asx.com.au.
The Company has engaged Boies Schiller Flexner (UK) LLP ("BSF"), a leading international law firm, to assist with legal matters pertaining to the dispute (refer to news release dated 17 October 2023). BSF is an internationally recognised dispute resolution law firm with extensive experience representing investors in international investment arbitrations in the mining and natural resources sectors worldwide.
Bondi deposit, Karankasso project JV and potential opportunities
The Company retains 100% ownership of its remaining fully issued exploration permits which includes the Djarkadougou 2 Exploration Permit, granted 30 July 2021 followed by the receipt of the arrêté on 6 January 2023 and hosts the Bondi Deposit (0.5Moz Au Inferred Mineral Resource(1)). The Company also retains an 18 percent interest in the Karankasso Project JV (0.7Moz Au Inferred Mineral Resource(2)). The Company is still considering the full impact of the actions of the Government on the Company’s investments in the Karankasso Project JV and the Koumandara Project.
Sarama is also advancing a number of potential opportunities outside Burkina Faso to leverage its infrastructure and geological knowledge and looks forward to providing further information in due course.
For further information, please contact:
Sarama Resources Ltd
t: +61 8 9363 7600