REG - Panthera Resources - Funding Confirmation Notice: US$13.6 million

Panthera ResourcesAnnouncement

25/08/2023 07:00

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RNS Number : 4518K  Panthera Resources PLC  25 August 2023

25 August 2023

 

Panthera Resources Plc

("Panthera" or the "Company")

 

Bhukia Project

Arbitration Funding Confirmation Notice

 

Gold exploration and development company Panthera Resources Plc (AIM: PAT),
with assets in West Africa and India, is pleased to announce that LCM Funding
SG Pty Ltd ("LCM Funding" or the "Funder") has successfully completed its due
diligence and issued the Funding Confirmation Notice (the "FCN"). Following
such issuance, an unconditional funding facility has been made available for
the Company's subsidiary, Indo Gold Pty Ltd ("IGPL"), to support IGPL's claims
against the Republic of India ("India") arising from the 1999 Agreement
between the Government of Australia and the Government of the Republic of
India ("GoI") on the Promotion and Protection of Investments (the "Treaty").

 

On 28 February 2023, the Company announced that IGPL had entered into a
conditional arbitration funding agreement (the "AFA") for up to US$10.5
million (the "Facility") in litigation financing with LCM Funding.  The
Facility has now been increased to US$13.6 million, following the positive
results of a comprehensive and robust due diligence process by LCM Funding.

 

Highlights

 

·        Issue of Funding Confirmation Notice for increased
unconditional funding Facility of US$13.6 million.

·        All monies advanced through the AFA are non‐recourse and
only repayable in the event of a successful recovery.

·        Appointment of several industry leading advisors and experts
in support of IGPL's claims against India.

 

Commenting on the announcement, Mark Bolton, Managing Director of Panthera
said:

 

"Following an extended due diligence process, we are pleased that LCM has
reaffirmed its view that IGPL has a meritorious claim against the Republic of
India.  LCM's detailed examination, supported by advice from multiple legal,
mining and valuation experts over many months reinforces the view that an
actionable expropriation, amongst other Treaty breaches perpetrated by India,
has occurred to an asset of substantial value to the Company.

 

In addition to working with Fasken, IGPL has used this period to select
several leading investment treaty law and mining industry advisors and experts
to assist in the arbitration.  The increased Facility ensures that IGPL has
the necessary resources to fully - and successfully - prosecute the merits of
its claims under the Treaty.

 

We again thank Fasken for their ongoing support of the Company's financing and
the advancement of IGPL's Treaty claims."

 

In addition, Mike Higgins, Panthera's Chairman says:

 

"I would like to thank Mark Bolton for his dedicated pursuit and achievement
of what we hope and expect will be, eventually, a very positive outcome for
the Company. Over the many years since I co-founded the group in 2005, there
have been many attempts to settle matters with governments in India over
obstacles to Bhukia permitting.  None were successful.

 

Obviously, our objective all along was to have put the major gold discovery at
Bhukia into production many years ago. Nevertheless, with no other choice, we
take this arbitration approach cautiously and yet steadfast in our belief in
our rights and confident of the final, successful, outcome.

 

I also would like to thank all involved in getting us to this point,
especially the Panthera board and the Fasken team."

 

AFA with LCM

 

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.

 

Upon issuance of the FCN, LCM Funding will provide up to US$13.6 million in
non‐recourse financing to IGPL for use 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.

 

In the event that there is an 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$1.36 million being 10% of the Funding
Limit (which is the amount of the Facility);

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.

 

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 a portion of its interest in the property, or secure
external finance, to secure sufficient cash and then apply it in accordance
with the above.

 

IGPL's Treaty Claims

 

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.  IGPL
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.

 

IGPL'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 ("Rajasthan").  The Prospecting
Licence Application over Bhukia was rejected by Rajasthan again 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 at this time.

 

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 Act
to reimburse parties for expenditures incurred.   Under the Treaty, IGPL is
entitled to fair and equitable compensation, not merely reimbursement of
expenditures.

 

IGPL's investment in Bhukia was expropriated by the actions of Rajasthan and
India through multiple acts culminating in the enactment of MMDR2021, contrary
to Article 7(1) of Treaty. India has also breached the obligation to accord
fair and equitable treatment to IGPL and its investment under Article 3 of the
Treaty.

 

The claim for compensation will involve, among others, 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.

 

Notwithstanding the positive progress with LCM, there can be no certainty as
to the outcome of IGPL's Treaty claims.

 

Bhukia Background

 

The Company completed a total of 21 holes drilled by IGPL and 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 (2008). The resource was updated in 2017 to
comply with JORC 2012.  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)

Kelly Gardiner / Stefano Aquilino (Sales & Corporate Broking)

 

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, Fausi MM, 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.

 

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