Orla Mining files US$400 million arbitration request in Panama
Orla Mining Ltd. [OLA-TSX] said it has filed a request for arbitration against the Government of Panama under the Canada-Panama Free Trade Agreement regarding the cancellation of the Cerro Quema mining concession in late 2023.
The company’s preliminary estimate for its claim is US$400 million, plus pre-award and post award interest.
The Cerro Quema Project is located on the Azuero Peninsula in the Los Santos Province of Southwestern Panama, about 45 kilometres southwest of the city of Chitre. The project includes a pre-feasibility stage, open pit, heap leach gold project, a copper-gold sulphide resource, and various exploration targets.
The company said it believes that Cerro Quema could be an important social and economic contributor to Panama, creating employment and skills development opportunities and contributing tax, royalty, and other fiscal benefits to the host communities and governments.
Orla said a notice of intent to arbitrate was filed with the Government of Panama under the FTV on March 28, 2024. This was intended to facilitate a 30-day consultation period to reach an amicable resolution to the company’s claim. As no resolution was reached, the company has proceeded with the Request to Arbitrate.
Although the company intends to vigorously pursue these legal remedies, Orla said its preference is a constructive resolution with the Government of Panama that results in a positive outcome for all stakeholders.
On Thursday, Ora shares eased 0.38% or $0.02 to $5.27. The shares currently trade in a 52-week range of $6.52 and $3.53.
Orla has two material gold projects. They include the Camino Rojo in Zacatecas State, Mexico, and the South Railroad in Nevada. Orla is operating the Camino Rojo Oxide Gold Mine, a gold and silver open-pit heap leach mine. The property is 100% owned by Orla and covers 139,000 hectares. It contains a large oxide and sulphide mineral resource.
Orla is also developing the South Railroad, a feasibility-stage, open pit, heap leach gold project located on the Carlin Trend in Nevada.
Orla recently said it plans to spend $14 million this year on exploration at its South Railroad property. The announcement coincided with the completion of Orla’s previously announced acquisition of Contact Gold Corp.
Contact’s key asset is the 100%-owned Pony Creek property, a 4,500-hectare exploration land package strategically located adjacent to Orla’s South Railway property.
Contact Gold’s other key asset is its Green Springs gold project. Green Springs is located near the southern end of the Cortez Trend of Carlin-type gold deposits in White Pine County. The project is located south of Waterton Precious Metals Fund 11 Cayman LP’s Mount Hamilton deposit.
Green Springs is an early-stage exploration property covering 18.5 square kilometres, and encompassing shallow past-producing open pits and numerous targets that were not mined.
The project is subject to an earn-in right held by Centerra Gold Inc. [CG-TSX, CAGDF-OTC], which can earn a 70% stake in the project by completing a four-year, $10 million exploration program.