A summary of recent events (claims)The recent drop in PLU sp has been directly related to the updates showed at Sidemcat; as Alex warned, the state of the 32 claims have been changed to expired ("Extinguido" in Spanish). A group of 12 claims were updated on October and the week after the sp went from 0.25 to 0.20, and today the second group (the reamining 20 claims, including Ocacasa 4) has been updated the same way.
To further discuss the situation, let me first summarize the recent events on the claims issue, and for that I will use the file of one of the claims in the first group (Colibri II):
July 11th. The Mining Council issues Administrative Resolution N° 360-2019-MEM/CM dismissing Macusani's Appeal for Review (Recurso de Revision) and thus confirming Colibri II's expiration.
August 14th. Macusani presents a writing before the Mining Council requesting the Ex Officio Nullity ("Nulidad de Oficio") of Colibri II's expiration Resolution, detailing several arguments that weren't mentioned in the Appeal for Review, like:
1) INGEMMET illegally classified Macusani's appeal as an Appeal before the Mining Council, even though Macusani was in its right to follow first an appeal process before INGEMMET.
2) INGEMMET didn't include their (internal) proofs when notifying Macusani about the late payment of the validity rights, and the legal precedent exists that in that case the notification cannot be considered to be made.
3) INGEMMET didn't comply with their duty to inform Macusani about its right to correct the written request presented, in particular, about its right to present the missing vouchers within a 48 hours term. Moreover, INGEMMET illegaly rejected the said vouchers when they where submited on July 3rd.
4) Macusani paid the validity rights as soon as it was practicable.
5) To declare the expiration of claims, the General Mining Law is clear in stating that the claims must be included in the list published in the "El Peruano" gazette, which didn't happen with the 32 Macusani's mining claims.
August 22nd. The Mining Council received Macusani's writing and issued a response saying:
VIEWED:
The writing N° (...), dated August 14th, presented by Mr. Ulises Raul Solis Llapa, (...), through which he demands the nullity of (...)
CONSIDERING:
(...) That, also, it should be noted that no appeal can be interposed against the resolution of the Mining Council, in accordance with the provisions of Article 61 of the Mining Procedures Regulation, approved by Supreme Decree No. 018-92-EM, which states that the mining administrative procedure concludes with the resolution issued in the last instance by the Mining Council, which may be contradicted in the Judiciary through a contentious administrative action (judicial appeal); in consecuense;
IT IS DECIDED:
There is no place for what is requested by Macusani Yellowcake S.A.C.- Notify.-
September 2nd. Macusani presented the same argument before INGEMMET's President, requesting that he sends the document to the Mining Council so it can declare "Absolute nullity" (Nulidad Abosoluta) of the expiration resolution.
September 3rd. Macusani presented a summary of its argumentations before the Mining Council's President (Fernando Gala Soldevilla), recommending the Council to declare the Ex Officio Nullity of expiration Resolution.
September 12th. The Mining Council reviewed Macusani's writing and, based again on Article 61 of the Mining Procedures Regulation, issued the same response: "There is no place for what is requested by Macusani Yellowcake S.A.C.".
September 17th. Macusani sent a writing to the Mining Council's President requesting that the effects of the ratified INGEMMET's Resolution be suspended, to avoid that INGEMMET put the claims for sale or, even worse, that INGEMMET itself declares the 32 claims as unclaimable (for 5 years), presumably to do research in those claims. The reason for this request was obviously to make the concessions appear as "VALID" (VIGENTE) on Sidemcat until the trial ends.
Is INGEMMET able to dispose of the claims before the trial ends? To answer this question we have to refer to Article 54 of the General Mining Law:
Article 54.- In case of judicial controversy over the validity of a concession, the obligation to pay the monetary obligations to keep the concession valid remains in place. The holder is also obliged to comply with the pecuniary obligations within the deadlines established in this Law, while the trial lasts, under penalty of abandonment of the instance with respect to the concession in dispute.
Once the payment has been made by the holder, he must credit them in the respective file.
Once the dispute is over and if the litigant lose, he may request reimbursement of the amounts paid.
That is, the Law is saying "you have to comply with all your pecuaniary duties to keep the concession valid until the trial ends". That implicitly means that you tie up the claim until the trial ends. That is, if you apply only the general legislation for administrative procedures, you conclude (like my lawyer, who is not specialized in mining affairs) that INGEMMET can dispose of the claims, but if you consider the specific legislation (General Mining Law) it is clear that Macusani can keep the claims valid no matter what INGEMMET' Sidemcat says.
September 24th. The Mining Council reviewed Macusani's writing and, based again on Article 61 of the Mining Procedures Regulation, issued the same response: "There is no place forwhat is requested by Macusani Yellowcake S.A.C.". They further recommended Macusani that, from that time on, it should present it contentious appeal before the Judiciary.
October 3rd. The Minining Council sent the file back to INGEMMET.
October 4th. Macusani presented an appeal before the Judiciary (file number 10759) for the first group of claims: Chilcuno, Huarituna I, Huarituna II, Huarituna 3, Chachazoniza 2, Colibri II, Triunfador 3, Samilio IV, Triunfador 4, Chachaconiza, Chapi "U" and Triunfador 2.
The same day Macusani presented the appeal (file number 10760) for the second group of claims: Chapi III, Chapi V, Huiquiza 3, Triunfador I, Chapi II, Colibri I, Corani U2, Ocacasa 4, Porsiaca Estrella, Liocco, Samilio I, Sillatoco, Tantamaco 6, Tantamaco 7,Tantamaco II, Triunfador 5, Tuparamani, Lincoln XXIX, Lincoln XXVI and Lincoln XXXII.
October 15th. The judicial appeal for the second group (20 claims) was admitted by the Judiciary, which notified INGEMMET and MINEM so they can submit their discharges.
October 18th. INGEMMET updated its database to show claims of the first group (12 claims) as "expired" (Extinguido) and declared "executed" (Ejecutoriada) the expiration Resolution.
October 24th: The judicial appeal for the first group (12 claims) was admitted by the Judiciary, which notified INGEMMET and MINEM so they can submit their discharges.
So now the situation for the 32 claims is the same than that of the Minera Colibri's claims (Jhoncito VII, Jhoncito VIII, Jhoncito IX and Jhoncito X), which figure as expired on Sidemcat since 2018, but which are still tied up by Minera Colibri because it has complied with the corresponding validity payments.
November 6th. INGEMMET updated its database to show claims of the second group (20 claims) as "expired" (Extinguido).
If we assume, as it seems from this summary, that the administrative channel has been exhausted, then it's pretty obvious that the 32 claims will figure as expired on Sidemcat until the trial ends. And I think that what has pushed some investors to sell their shares, they saw the Sidemcat updates and took an "I will sell before somebody else notes out" kind of attitude.
The question now is: Does PLU management think the administrative channel has been exhausted? If so, how long will we have to wait before a constrained PEA is released? If the answers are "yes" and "in short time (less than 3 months)", then I think we may be running out of bad news to further drop the sp. Just think how will the PEA (even if constrained) look like: fast ramp up to 60k tones per year and then to 100k tons per year, with a total cost per ton of LCE lower than spodumene competitors (my bet is around $4,000 per ton of LCE).