GeoDan2 - thanks for posting the information.
Nobody outside of Mordashov and his NG confidants know the reason for filing this lawsuit back around June 7. (By the way read Mordashov when the news talks about specific lawsuit claimants and NG).
I could have understood if this action had occurred after the French SC challenge of around Sept 17. But this June filing date?
As to the post asking if this was all speculation and is it good or bad for OREA; yes, its all speculation and it may be very bad for OREA. Ask yourself why did NG not inform its own junior partner? Why go into legal confrontation only for their own 55%. Everybody should now be aware that NG is, based on this evidence, for itself (now clearly, they don’t believe in partnering, even pre mine award).
NG apparently according to a posted article are asking the C of Arbitration for 1/2 bill US$ in compensation for a project. Remember, a project that has not even been taken from them by the French? The present case in French SC is about exploration license renewal, not a mine expropriation!
I am not clear (not a miner or lawyer) but even if the SC does rule against NG (general view is this is unlikely), then this still does not preclude NG from submitting the reports and apps for the mine permit. Nearly all FG licenses are presently up for renewal, but the explorers still have the authority to ‘run’ their sites.
NG must know that this legal action initiated in June will likely hold negative repercussions for Macron’s Presidential reelection. Environmentalists will see this as attack on France and the Rainforest and lay at least some blame on Macron’s past supportive Montagne d’Or sentiments. Yes, this really seems to be the approach to take to obtain French political support for a FG mine award.
So, what can we deduce from this potentially highly negative NG move? My view is Mordashov has decided for whatever reasons he wants out of Montagne d’Or (and I am sure Putin is very aware of this move). But he wants ‘compensation’; ½ bill’ US. He knows the C of Arbitration if they give awards against states usually go for around sunken costs (e.g., Stans Energy and South American Silver were so awarded). They have been larger awards but getting them enforced in world courts has proven a major problem for companies/funders in the past and can add years to the whole process. A disaster for shareholders usually.
However, NG has a BFS and it is probably updated to 2021. No way does the 2018 BFS lead to a 55% mine claim of 4.5 billion US $ (see my previous post). However, if the NG unreleased infill drill results of 2018 have added 1 - 1.5 million oz P&P, and/or along with oz upgrades and mine cost savings, etc, then now it just might. This is the data that banks make loans against and courts insist on when considering requested award amounts. Without this 'recognised' data based evidence you stand little chance in the C of Arbitration of a signifcant award.
Unfortunately, I have seen such cases take 3 – 7 years to arrive at an award if one is made (not including getting the award). Further, there is a C of Arbitration initial 6-month pre lawsuit submission process if my memory serves me correctly, that requires ‘claimants’ to have observed specific interactions with the respondent (France), and I am not sure NG has actually taken these steps.
Yet, even if NG has followed correct initially procedures for C of Arb’ submission, France is highly unlikely to settle out of court. Why would they when a ‘sunken cost’ award, if made, would be around 100 mills?
Mordashov clearly knows all this stuff; – i.e., lawsuit might not meet C of Arbitration pre submission requirements, unlikely pre award settlement, years to an award if made, likely to be around sunken costs. Does all this sound like an attractive risk reward scenario for NG to have committed this action?
So, again, why did NG do this if it clearly wants out of Montagne d’Or? Speculation might be NG saw this legal action as the only way to bring to the market now, the new value of Montagne d’Or. A 4.5 bill US $ valuation (via new BFS provability, especially, if it is to be used in a Court of Arb’ case?) with a sell offer of at least 500 mills.
IMHO, no Western public gold major would risk such an offer due to shareholder revolt, but would a Chinese entity on the hunt in S. America (under state 'encouragment' especially for gold) - risk 11% cash mine valuation for a longer term 9 times return? Would the French agree to see this potential lawsuit removed from around Macron’s pre-election neck along with recognition of a permit submission left until well after the election (the Chinese think in decades not on any impact in the next few months)?
What does this all mean for OREA? What a mess! Forget there are already small royalty agreements on Montagne d’Or for I believe OREA investors Sandstrom and Euro Res’ (IamG). Factor those in for any NG outcomes.
If NG were bought out that would mean OREA has a new controlling project partner. Unless OREA offered to be bought out at the same time. At a 3 + bill mine valuation for OREA’s 45% this would give a 300 mill (10%) buyout on the same valuation as NG.
Montagne d'Or US $ 800 mill buyout for maybe 4 mill P&P oz plus along with a large potential gold expansion via the 400m on strike and the 100m below the deepest BFS pit hole identified by exploratory drilling done 2018 by then Columbus gold (now OREA), just before NG took over project managership.
There again, if NG is forced to go the full legal route, then OREA 45% Montagne d’Or is in limbo for potentially years. Doubtful anyone would buy in such circumstances. Further, if NG gets an award, then they are out of Montagne and France regains major share of the project which it kills and/or….? Or, does OREA take an offer to sell out to NG now for a ‘fire sale’ (NG does not want partners in mining and probably likewise in legal cases)? Or does OREA find its own funders (33% commission and costs) to take on France for years in court?
Sound like a absolute mess?
Again, all speculation but anyone (including those who may who may have mine or legal knowledge in this sector) is very welcome to add to the ‘thinking’ here.
Yes, I have a significant holding in OREA and hence my contemplation and concern.
GLTA -
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