Orea Mining Corp. [OREA-TSX, OREAF-OTCQX, 3CG-FRA] shares soared in heavy trading Thursday, after the company and its joint venture partner announced that they had won a lawsuit against the French Government over the 5.0-million-ounce Montagne d’Or gold deposit.
The shares advanced on the news, rising 44.4% or $0.04 to 13 cents on volume of over 5.75 million, making Orea the volume leader on the TSX, Thursday. The shares are currently trading in a 52-week range of 23.5 cents and $0.08.
The stock market rally followed the announcement that the Administrative Court of Appeal of Bordeaux has rejected the French Government’s appeal and request for a stay of execution of a December, 2020 court decision, which ordered the French government to renew its Montagne d’Or mining concessions within six months.
Montagne d’Or, located in French Guiana, France, is a permitting-stage open pit gold mining project that hosts proven reserves of 8.25 million tonnes at 1.99 g/t (530,000 ounces gold gold) and probable reserves of 45.87 million tonnes at 1.50 g/t (2.2 million ounces of gold).
A 2017 bankable feasibility study envisions average annual gold production of 237,000 ounces over the first 10 years of mine life at an average grade of 1.73 g/t gold and all-in-sustaining cost of US$749 an ounce.
The Montagne d’Or joint venture, owned 44.99% by Orea and 55.01% by United Kingdom-based Nord Gold SE [NORD-LSE] submitted renewal applications for a 25-year period for two core mining concessions in December, 2016.
In the absence of a timely decision from the Minister of Economy in charge of the mines, and in order to protect its rights, the joint venture filed proceedings in February and March 2019 in the Administrative Court of Cayenne in French Guiana to invalidate any implicit refusal as a result of the French government having failed to respond within the legal deadline and to order the State to extend mining concessions for a period of 25 years and, in the alternative, to reconsider its request for an extension.
The court rendered its decision on December 24, 2020, and concluded that the implicit refusals were cancelled and ordered the State to extend the mining concessions within a period of six months from the notification of the court judgement.
The Minister of Economy, and a non-governmental organisation (NGO) permitted to intervene in the case, had two months to appeal the decision.
In its, the Court of Appeal concluded that the arguments put forth by the French Government were without merit and that the joint venture submitted complete applications and met all the requirements for the renewal of the mining concessions.
The government has two months to file one final appeal to the Supreme Court. An appeal, if filed, would, in principle, have no suspensive effect, said Orea in its press release, adding that the Supreme Court would not reconsider the facts and would limit its review to interpretation of relevant law.