NG (and OREA?) vs France over Montagne d'OrThe following comments are based on the article below actually being accurate.
According to a quotation attributed to him in Feb’ 2020, Macron appears now to be against Montagne d’Or, regardless of his longtime past support.
While the likes of Newmont, Barrick (Reunion) will likely mothball their FG nascent exploration projects, swallow exploration costs and move on, NG is clearly legally pursuing its US$4.5 bill Montagne d’Or valuation. They cannot forgo 10 years of project work, being in a zoned area for mining, having the support of Macron through at least 2019, spending approx., 50-100 mill' in sunken costs and having actualised a BFS demonstrating (hopefully) a US$ 8 bill (NG + OREA) valuation and have designed the newest ESG compliant gold mine on the map.
Further, we learn from the article that NG actually notified the French of litigation 14 months ago! (Sept’ 2020). They tried unsuccessfully to negotiate an acceptable outcome before going to a formal arbitration in June 2021. Now we are 15 months into this overall litigation and we found out about last month! NG concern for OREA and their shareholders - yes right.
Clearly, the French did not give in on this project during negotiations despite knowing the 1989 investment treaty between France and Russia would be invoked later. Therefore, the question is does the NG formal arbitration ask for the Montagne d'Or concessions to be renewed and if not then for damages? Or, is NG acknowledging French commitment to environmentalism and trying to cash in for damages with no request for concession renewal?
IMHO, I think the project is over! NG is not going to want the concessions back knowing that the French may well reject the mine in 2 years’ time after any submission. Then more years of litigation. Further, note NG is also giving France a chance to kill both the Montagne d'Or mine and future gold exploration in FG in one fell swoop (or at least till Macron has gone and likewise the environmtalists in his gov'). However, such a deal would likley be shrouded in confidentiality.
So boy, is OREA now in a dilemma! They are not Russian so by themselves I don’t see how they can also use the 1989 treaty. Notice NG did not litigate under the JV company but uner 2 Russian subsiduaries, so it may well be only a Russian company that can so use this treaty (Im not a lawyer)?
Seems OREA by themselves would be looking at trying to get an arbitration funder (taking 25 – 33% award commission + costs). OREA may also be excluded from the NG litigation documentation; even any new BFS. Then only to spend 2 - 5 years in court and for maybe (if awarded) the more usual sunken costs award of around US 30 mill (15 cents per share and thats before all the funder deductions)! An absolute waste of time!
Therefore, OREA appears to be over a barrel! Again, going it themselves is a waste. That leaves selling out to the only entity that will buy them, obviously NG. The Russians have valued OREA at about 350 bill (OREA damages would be around 340 mil). However, do you think that NG would offer anywhere near the (11%) damages claim and remember nobody is likely to counter bid? Dream on. In fact, while NG’s damages claim would go to around 800 mill, they would probably be delighted to see the French settle with them for 50% of that.
IMO, OREA might get 25% from NG of their damage amount (85 mill = 40 cents?) and a potential spinoff of the Suriname project, that's if OREA even confirms its acceptance. While for me this would represent an overall investment profit, as a win loss in terms of speculative time held; it would represent a disaster.
However, I’d be very interested in any perspective from other OREA holders. Apparently, we represent around 70% of the share base now, so there have to be others out there holding for some reason? Anyone care to ‘jump in’?
Mountain of gold: the French state attacked for having withdrawn the project https://www.alternatives-economiques.fr/mathilde-dupre/montagne-dor-letat-francais-attaque-retire-projet/00100904 Nov 5 2021
Two Russian investors would have initiated proceedings against France in September 2020,
according to the specialized information site IAReporter . They do so on the basis of the bilateral investment protection agreement which has linked France and Russia since 1991. This dispute aims at the non-renewal by the State of mining concessions, in 2019, to the company Montagne d'Or , in Guyana…
GLTA -
https://twitter.com/EarthsRare