Panthera Resources - Arbitration Funding for up to US$10.5 million
28/02/2023 07:00
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RNS Number : 2125R Panthera Resources PLC 28 February 2023
28 February 2023
Panthera Resources Plc
("Panthera" or the "Company")
Bhukia Project
Conditional Agreement on Arbitration Funding for up to US$10,500,000
Gold exploration and development company Panthera Resources Plc (AIM: PAT),
with assets in West Africa and India, is pleased to announce that the
Company's subsidiary, Indo Gold Pty Ltd ("IGPL"), has executed a conditional
arbitration funding agreement (the "AFA") for up to US$10.5 million in
litigation financing with LCM Funding SG Pty Ltd ("LCM Funding" or the
"Funder"). LCM Funding is a subsidiary of Litigation Capital Management
Limited ("LCM"), a firm quoted on the AIM Market of the London Stock Exchange.
LCM is a leading global litigation financier with significant expertise in
international arbitration and cross-border dsputes, including bilateral
investment treaty claims over mineral resource assets.
Highlights
· Conditional AFA entered into with LCM Funding to support the
damages claim against the Republic of India for breaches of its obligations
under the Australia-India Bilateral Investment Treaty (the "BIT").
· The AFA provides funding for up to US$10.5 million to support
all ordinary course costs associated with IGPL pursuing the BIT claim (the
"Claim").
· All monies advanced through the AFA are non‐recourse and
only repayable in the event of a successful recovery pursuant to the Claim.
· Appointment of Fasken Martineau LLP ("Fasken"), a leading
international law firm with extensive experience in mining, international
arbitration and dispute resolution, as counsel to pursue the Claim.
Commenting on the announcement, Mark Bolton, Managing Director of Panthera
said:
"We are pleased that LCM has chosen to partner with Panthera. Its
willingness to support our Claim is a tremendous vote of confidence. The AFA
reflects an equitable sharing of the risk and reward between the partners.
The AFA ensures that Panthera has the necessary resources to fully prosecute
the merits of its Claim under the treaty.
We extend our appreciation to Fasken who have committed significant resources
over an extended period in support of the Company's pursuit of financing and
the advancement of the Claim."
Arbitration Funding Agreement
Amongst other conditions precedent, LCM Funding has two months from the date
of entering into the AFA to complete its detailed due diligence in relation to
the Claim (the "LCM Funding Due Diligence"). Following successful completion
of the LCM Funding Due Diligence, the parties can move to complete a Funding
Confirmation Notice.
Following completion of the Funding Confirmation Notice, LCM Funding will
provide up to US$10.5 million in non‐recourse financing to IGPL (the
"Facility") for use in prosecuting the Claim. For the avoidance of doubt, IGPL
will receive little of the Facility to defray ongoing operating costs. If no
award and/or recovery are achieved, then LCM Funding is not entitled to any
repayment of the Facility.
In the event that there is a award and/or recovery, LCM Funding shall be
entitled, in the first instance, to the amounts it has deployed from the
Facility, as well as the greater of:
a) approximately US$1.05 million being 10% of the Funding
Limit;
b) a Funder's commission (the "Commission") of between 5% and
15% of the damages recovered, based upon the number of years that have passed
from the date of the Funding Confirmation Notice; or
c) a multiple (the "Multiple") of between 2 and 4.25 times the
total of the Facility, based upon the number of years that have passed from
the date of the Funding Confirmation Notice.
Time period Multiple Commission
Funding Confirmation Notice to its one-year anniversary 2 5%
1st year anniversary of Funding Confirmation Notice to 2nd anniversary 2.5 7.5%
thereof
2nd year anniversary of Funding Confirmation Notice to 3rd anniversary 3 10%
thereof
3rd year anniversary of Funding Confirmation Notice to 4th anniversary 3.75 12.5%
thereof
Any time following the prior period 4.25 15%
Following the fith year, the Funder is additionally entitled to an agreed
interest rate at 25% per annum on the Deployed Funding until receipt of
damages payments.
In the event that the settlement or award includes the value or benefit of any
property other than cash, pursuant to the terms of the AFA, IGPL are required
to realise and convert this property to cash and then apply it in accordance
with the above.
Notwithstanding the positive nature of discussions to date with the Funder,
there can be no assurance that the Funder's due diligence will be
satisfactory. Furthermore, there can be no certainty as to the outcome of
the Claim.
Background to Claim
The Bhukia Project comprises legal rights that the Company holds via its
Australian subsidiary, IGPL, in respect of an area that was the subject of a
rejected Prospecting Licence Application in Rajasthan, India. The Company made
its initial investment in Bhukia (through IGPL) in January 2005. The Company
provided all of the funding and managed the joint venture exploration
programmes. The work programmes were carried out in accordance with
government rules and regulations and reported on time and in a professional
manner.
The Company's right to be granted a Prospecting Licence over Bhukia, through
its joint venture holding, has been consistently frustrated over an extended
period of time by the Government of Rajasthan ("GoR"). The Prospecting
Licence Application over Bhukia was rejected by the GoR in August 2018 on
various spurious and legally untenable grounds. An interim Stay Order was
obtained from the Rajasthan High Court, which remains in place subject to
ongoing proceedings to challenge the GoR's decision.
In 2021, the Government of India ("GoI") passed a new act ("MMDR2021") to
amend the Mines and Minerals (Development and Regulation) Act of 2015
("MMDR2015"). Under Clause 13 of the MMDR2021, any pending Prespecting
Licence Applications ("PLA") were deemed to have lapsed and provisions were
included in the Act to reimburse parties for expenditures incurred. Under
the BIT, the Company is entitled to fair and equitable compensation, not
merely reimbursement of expenditures.
As described above, it is clear that the Company's investment in Bhukia was
expropriated by the GoI through the enactment of MMDR2021, contrary to Article
7(1) of BIT. The GoI has also breached the obligation to accord fair and
equitable treatment to the Company's investment under Article 3 of BIT.
The claim for compensation will involve an assessment of the market value of
the Bhukia Project immediately before the expropriation. The Company believes
that the market value of Bhukia is substantial with the project ranking among
the top undeveloped gold projects in the world.
Bhukia Background
The Company completed a total of 21 holes drilled by IGPL and reported a JORC
compliant mineral resource estimate of 1.74 million ounces at an average grade
of 1.4 g/t Au (2008). Subsequently, much more work has been done on the
project to demonstrate, with confidence, a much larger and more important gold
deposit. The Geological Survey of India, an agency of the GoI, published a
report in 2014 after the completion of over 150 drill holes (Bulletin Series A
(April 2014)), wherein it reported reserve/resource estimates that far exceed
the prior figure published by the Company. The report demonstrated the
project's merit as supporting a large, low-cost gold mining operation with low
stripping ratios and copper and cobalt bi-product credits.
Contacts
Panthera Resources PLC
Mark Bolton (Managing
Director)
+61 411 220 942
contact@pantheraresources.com
Allenby Capital Limited (Nominated Adviser & Joint
Broker) +44 (0) 20 3328 5656
John Depasquale / Vivek Bhardwaj (Corporate
Finance)
Novum Securities Limited (Joint
Broker)
+44 (0) 20 7399 9400
Colin
Rowbury
Financial Public Relations
Vigo Consulting
Ltd
+44 (0)20 7390 0230
Oliver Clark / Chris McMahon
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(https://twitter.com/PantheraPlc)
For more information and to subscribe to updates visit: pantheraresources.com
(http://pantheraresources.com)
Qualified Person
The technical information contained in this disclosure has been read and
approved by Ian S Cooper (BSc, ARSM, FAusIMM, FGS), who is a qualified
geologist and acts as the Qualified Person under the AIM Rules - Note for
Mining and Oil & Gas Companies. Mr Cooper is a geological consultant to
Panthera Resources PLC.
UK Market Abuse Regulation (UK MAR) Disclosure
The information contained within this announcement is deemed by the Company to
constitute inside information for the purposes of Regulation 11 of the Market
Abuse (Amendment) (EU Exit) Regulations 2019/310. Upon the publication of this
announcement via a Regulatory Information Service ("RIS"), this inside
information is now considered to be in the public domain.
Forward-looking Statements
This news release contains forward-looking statements that are based on the
Company's current expectations and estimates. Forward-looking statements are
frequently characterised by words such as "plan", "expect", "project",
"intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other
similar words or statements that certain events or conditions "may" or "will"
occur. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that could cause actual events or results to
differ materially from estimated or anticipated events or results implied or
expressed in such forward-looking statements. Such factors include, among
others: the actual results of current exploration activities; conclusions of
economic evaluations; changes in project parameters as plans continue to be
refined; possible variations in ore grade or recovery rates; accidents, labour
disputes and other risks of the mining industry; delays in obtaining
governmental approvals or financing; and fluctuations in metal prices. There
may be other factors that cause actions, events or results not to be as
anticipated, estimated or intended. Any forward-looking statement speaks only
as of the date on which it is made and, except as may be required by
applicable securities laws, the Company disclaims any intent or obligation to
update any forward-looking statement, whether as a result of new information,
future events or results or otherwise. Forward-looking statements are not
guarantees of future performance and accordingly, undue reliance should not be
put on such statements due to the inherent uncertainty therein.
**ENDS**
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