CLAIM OVERVIEW
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Claim Overview
In December 2024, Sarama Resources formally commenced international arbitration proceedings against the People’s Republic of Burkina Faso (“Burkina Faso”) in response to Burkina Faso’s unlawful expropriation of Sarama’s flagship Sanutura Project (the “Project”), which hosts multi-million-ounce gold resources and was in the early stages of mine development.
Sarama is committed to pursuing full and fair compensation and protecting shareholder value through internationally recognized legal mechanisms.
Claim Background
In August 2023, Sarama received official notification from Burkina Faso’s Ministry of Energy, Mines and Quarries that its application for its 100%-owned Tankoro 2 Exploration Permit (the “Permit”) – which, notably, had already been approved by Burkina Faso nearly two years earlier – had been purportedly “rejected” retroactively [see Announcement 6 Sept 2023]. The Permit covered the Tankoro Deposit, which contains a Mineral Resource of 0.6 million ounces of gold (Indicated) and 1.9 million ounces of gold (Inferred) and formed the core of the Project – a large-scale gold development in the highly prospective Houndé Greenstone Belt in southwest Burkina Faso.
At the time of expropriation, Sarama was nearing completion of a Preliminary Economic Assessment (PEA) for the development of a mine at the Project. All project activities were suspended following the expropriation.
Sarama, as a Canadian company, has access to investment protections under a bilateral investment treaty (“BIT”) entered into between Canada and Burkina Faso in 2017. Pursuant to the BIT, Sarama has initiated dispute resolution by arbitration and is seeking compensation by way of damages from Burkina Faso.
Despite efforts to resolve the dispute amicably, Burkina Faso failed to engage during the mandated 60-day consultation period following Sarama’s Notice of Intent to Arbitrate in November 2023 [see Announcement 29 Nov 2023]. As a result, in December 2024, Sarama filed a formal Request for Arbitration with the International Centre for Settlement of Investment Disputes (ICSID), part of the World Bank Group, pursuant to the BIT [see Announcement 12 Dec 2024].
Litigation Funding Secured
In October 2024, Sarama entered into a Litigation Funding Agreement (LFA) with Locke Capital II LLC a specialist in dispute resolution financing [see Announcement 24 Oct 2024]. The LFA provides a US$4.4 million non-recourse loan facility to cover all legal and arbitration-related costs. The facility is secured solely against the arbitration claim and any resulting proceeds, with no impact on Sarama’s broader operations outside the Project’s ownership structure.
Repayment is required only in the event of a successful claim, settlement, or in the case of a default by Sarama under the LFA. If a material adverse change occurs, only unspent funds are recoverable. The funder’s return is directly tied to the outcome and timing of a successful arbitration process and/or settlement.
Formal Commencement of Arbitration
On 12 December 2024, Sarama formally commenced arbitration by filing a Request for Arbitration with ICSID. This action followed Burkina Faso’s failure to respond to Sarama’s request for consultation to attempt to resolve the dispute amicably in its Notice of Intent to Arbitrate, sent to Burkina Faso pursuant to the BIT.
Sarama is seeking no less than US$120 million in damages. A qualified quantum expert will provide an independent valuation to support the final compensation amount that will be submitted to the arbitration tribunal.
Experienced Legal Representation
Sarama is represented by Boies Schiller Flexner (UK) LLP [see Announcement 18 Oct 2023], a globally recognized law firm with extensive expertise in investor-state arbitration. The firm has a proven track record in mining-sector disputes, having successfully represented Indiana Resources Ltd (ASX: IDA) against Tanzania and GreenX Metals Ltd (ASX: GRX) against Poland in similar expropriation claims.
