REG - Panthera Resources - Bhukia Auction

Panthera ResourcesAnnouncement

26/06/2024 07:00

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RNS Number : 9312T  Panthera Resources PLC  26 June 2024

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK Market Abuse
Regulation

 

26 June 2024

 

Panthera Resources Plc

("Panthera" or the "Company")

 

Bhukia Auction

 

Gold exploration and development company Panthera Resources Plc (AIM: PAT),
with assets in West Africa and India, provides the following update on the
dispute with the Republic of India ("India") over the latter's breaches of its
obligations under the 1999 Agreement between the Government of Australia and
the Government of the Republic of India on the Promotion and Protection of
Investments (the "Treaty") in relation to the Bhukia project.

 

The Company advises that the Government of Rajasthan ("GoR") has announced the
preferred bidder with the 'Highest Final Price Offer' of 65.3% for a mining
lease for the Bhukiya-Jagpura block.  This follows the issuance of a notice
by the GoR on 6 March 2024 inviting bids in the auction of a mining lease of
the Bhukiya-Jagpura block, substantively covering the Bhukia project.

 

Commentary

 

The 'Highest Final Price Offer' of 65.3%, as payable to the GoR, refers to the
percentage of value of mineral despatched each month multiplied by the sale
price of the mineral on the month of despatch as published by the Indian
Bureau of Mines.  We note that the Geological Survey of India ("GSI") has
reported a mineral resource of 7.15 Moz of gold with a calculated inground
value of US$16.7 billion based on the closing gold price of US$2,329/ounce on
24 June 2024.

 

In addition, in order for the preferred bidder to be considered the successful
bidder and qualify for the grant of a mining lease, an upfront payment and a
performance security (in the form of a bank guarantee) must be provided by the
preferred bidder to the GoR as follows:

 

Upfront Payment:                approximately US$60 million
(₹500 crore)

Performance Security:        approximately US$60 million (₹500 crore)

 

From the results of its earlier work at Bhukia, coupled with the evaluation of
the subsequent GSI reports, the Company believes that the mineral resource
potential of Bhukia significantly exceeds that reported by the GSI.

 

IGPL's Treaty Claims

 

The Bhukia Project comprises of legal rights that the Company holds via its
Australian subsidiary, Indo Gold Pty Ltd ("IGPL"), in respect of an area that
was the subject of a rejected Prospecting Licence Application in Rajasthan by
Metal Mining Pvt Ltd ("MMI").  MMI is a wholly owned subsidiary of IGPL.

 

The Company made its initial investment in Bhukia (through IGPL) in or around
2005.  IGPL provided substantial 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.

 

IGPL's right to be granted a Prospecting Licence over Bhukia, through its
joint venture holding, has been consistently frustrated over an extended
period by the GoR. The Prospecting Licence Application over Bhukia was
rejected by the GoR again in August 2018, despite an agreement and the GoR's
promise to grant the Prospecting Licence, on various spurious and legally
untenable grounds.

 

In 2021, India passed a new act ("MMDR2021") to amend the Mines and Minerals
(Development and Regulation) Act of 2015 ("MMDR2015").  Under Clause 13 of
the MMDR2021, the preferential right to a prospecting licence and
subsequently, a mining lease, lapsed and provisions were included in the
MMDR2021 to reimburse parties for expenditures incurred.  Under the Treaty,
IGPL is entitled to fair and equitable compensation, not merely reimbursement
of expenditures.

 

The acts and omissions by the GoR and India, culminating in the enactment of
the MMDR2021 and the dismissal in September 2023 of MMI's writ petition,
amount to breaches by India of its obligations under the Treaty, including but
not limited to, Article 3 (Promotion and Protection of Investments), Article 4
(Treatment of Investments) and Article 7 (Expropriation and Nationalisation).
IGPL will be seeking damages from India.

 

There can be no certainty as to the outcome of IGPL's Treaty claims.

 

Bhukia Background

 

The Company completed a total of 20 holes drilled between 2005 and 2006 and in
October 2006 reported a JORC compliant mineral resource estimate of 38.5 Mt @
1.4 g/t Au for some 1.74 Moz gold using a cutoff of 0.5 g/t Au (updated in
2017 to comply with JORC 2012). In 2007, it advised shareholders of its plan
to undertake a first-phase, systematic drill-out campaign upon grant of a
prospecting licence, on well-defined exploration targets of 6 Moz gold.  Its
vision from early on was that Bhukia represented an exceptional gold project
capable of supporting a large, low-cost, open pit gold mining operation with
low stripping ratios and copper and cobalt by-product credits.

 

The GSI, an agency of the Government of India, published a report in 2014
after the completion of over 150 drill holes (Bulletin Series A (April 2014)),
wherein it reported at that point in time indicated and inferred resource
estimates of 6.7 Moz gold (excluding additional resources subsequently found
through additional drilling by the GSI). The estimate was reportedly prepared
according to the UNFC code 333. More recently, the GoR issued a gazette
notification containing an updated resource estimate of 113.52 Mt at 1.96 g/t
and 0.14% Cu, which amounts to 7.2 Moz of gold plus copper with accessory
nickel and cobalt. It is not reported what code was followed in preparing the
updated estimate.

 

LCM Litigation Financing

 

On 25 August 2023, the Company announced that IGPL had secured up to US$13.6
million in litigation financing ("Facility") 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 disputes funder with significant
expertise in international arbitration and cross-border disputes, including
bilateral investment treaty claims over mineral resource assets.

 

The non‐recourse Facility is to be used by IGPL in prosecuting its Treaty
claims against India. If no award and/or recovery are achieved, then LCM
Funding is not entitled to any repayment of the Facility.

 

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)

Guy McDougall / Kelly Gardiner

 

Novum Securities Limited (Joint
Broker)
+44 (0) 20 7399 9400

Colin
Rowbury

 

Subscribe for Regular Updates

 

Follow the Company on Twitter at @PantheraPLC
(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.

 

Glossary

 

 JORC:    Australasian Code for Reporting of Mineral Resources and Ore Reserves' of
          December 2012 ("JORC Code") as prepared by the Joint Ore Reserves Committee of
          the Australasian Institute of Mining and Metallurgy. Terms including Measured,
          Indicated and Inferred Resources as defined therein

 Mt:      Million Tonnes (Metric)

 g/t:     Grammes per Tonne (Metric)

 Moz:     Million Ounces (Troy)

 Au:      The chemical element for Gold

 

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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