VANCOUVER, March 20, 2018 /CNW/ - Eco Oro Minerals
Corp. ("Eco Oro" or the
"Company") (CSE: EOM) has filed a memorial on the
merits (the "Memorial") with the World Bank's International
Centre for Settlement of Investment Disputes ("ICSID") in
its arbitration (the "Arbitration") against the Republic of
Colombia ("Colombia").
Eco Oro is seeking USD$764 million as compensation for the damages
it has sustained as a result of Colombian State measures that have
destroyed the fair market value of Eco
Oro's investments in the Colombian mining sector and
deprived Eco Oro of its rights under
its principal mining title, Concession Contract 3452
("Concession 3452"), comprising the Angostura gold and
silver deposit (the "Project").
Eco Oro was one of the first
foreign mining companies to invest in Colombia's gold mining sector. The Company has
invested over US$250 million to
develop the Project. As a result of these investments, Eco Oro declared resources for the Angostura
deposit where none existed before and the deposit is now one of the
largest in Colombia. Eco Oro made these investments in reliance on
Colombia's commitments in its
mining titles, including Concession 3452, that were stabilized
pursuant to Colombian law. The Colombian Government made repeated
assurances of support for the Project, even declaring it to be a
"project of national interest". Eco
Oro itself has been lauded for its social programs and its
environmental practices, receiving awards both internationally and
from the Colombian authorities. In December
2014, the Colombian government issued Resolution 2090 for
the first time delineating the Santurbán Páramo in the vicinity of
the Project. Although the Resolution restricted mining in the newly
designated Páramo, it exempted certain pre-existing mining
concessions, such as Eco Oro's
Concession 3452.
Notwithstanding these commitments and assurances, the Colombian
Government, through the Colombian National Mining Agency
(Agencia Nacional de Minería or "ANM") issued a
decision in August 2016 depriving
Eco Oro of vital rights over the
majority of Concession 3452 on the basis of a Constitutional Court
decision issued in February 2016. The
government failed to dispel uncertainty with respect to
Eco Oro's rights over other areas of
the Concession. This effectively neutralized any benefit
Eco Oro could obtain from the
Project. Subsequently, in November
2017, a further decision by the Constitutional Court
overturned the whole of Resolution 2090 and required that the
Santurbán Páramo be redelineated. This process is not expected to
be completed before November 2018 and
will likely lead to increased restrictions on mining. Meanwhile,
Eco Oro has an impending deadline to
submit a mine plan to the National Mining Agency. Failure to do
this will mean Concession 3452 will be subject to termination by
the National Mining Agency. However, given the ongoing uncertainty
as to where Eco Oro can pursue
mining activities within Concession 3452 (if at all), Eco Oro has no basis upon which to create such
plans. The government has refused to grant Eco Oro a suspension of its deadline for
submitting plans. The entirety of Concession 3452 is thus in a
state of paralysis and facing potential termination.
The Memorial sets out factual and legal arguments supporting
Eco Oro's claim against Colombia and the quantum of the damages
sustained by Eco Oro. Eco Oro's claim is based on violations by
Colombia of several provisions of
the Canada-Colombia Free Trade Agreement (the "Treaty"),
including:
- Deprivation by Colombia of the
use and enjoyment by Eco Oro of its
right to mine the Angostura Project under Concession Contract 3452,
amounting to an indirect and unlawful expropriation under Article
811 and Annex 811 of the Treaty;
- Unfair and inequitable treatment by Colombia in breach of Article 805(1) of the
Treaty including the frustration Eco
Oro's legitimate expectations and failure by Colombia to provide a stable and predictable
legal and investment environment and full protection and
security.
Pursuant to the terms of the Treaty and customary international
law, Eco Oro is entitled to monetary
damages in accordance with the principle of full reparation. This
requires damages to be calculated equal to the fair market value of
the Angostura Project. Eco Oro and
its experts calculate that the fair market value of the Project was
$696 million. Eco Oro is also
claiming interest in the sum of $68
million.
The three-member Tribunal constituted to hear the Arbitration
claim will determine Colombia's
liability and any compensation due to Eco Oro. The arbitral procedure is set out in
Procedural Order No. 1. This can be found on the ICSID website
at: https://icsid.worldbank.org/en.
Company Profile
Eco Oro Minerals Corp. is a publicly-traded company and the
Arbitration is its core focus.
Forward-Looking Information
Certain statements in this press release are "forward-looking"
statements within the meaning of Canadian securities legislation.
All statements, other than statements of historical fact, included
herein are forward-looking information. Forward-looking statements
in this press release include, without limitation, statements
regarding the likelihood of the Company being successful in the
Arbitration, the impact of Colombia's measures on the Project, whether
Colombia has breached the Free
Trade Agreement, the losses that the Company has suffered, the
timing and schedule of the Arbitration and related matters.
Forward-looking statements are generally, but not always,
identified by the words "expects", "plans", "anticipates", "seeks",
"claims", "asserts", "in the event", "if", "believes", "assets",
"position", "intends", "envisages", "assumes", "recommends",
"estimates", "approximate", "projects", "potential", "indicate" and
similar expressions, or that events or conditions "will", "would",
"may", "could" or "should" occur. Forward-looking statements are
necessarily based upon the current belief, opinions and
expectations of management that, while considered reasonable by the
Company, are inherently subject to significant litigation,
business, economic, competitive, political and social uncertainties
and other contingencies. Many factors could cause the Company's
actual results to differ materially from those expressed or implied
in the forward looking statements. These factors include, among
others, whether the Company is correct with respect to its
positions and assertions regarding its dispute with Colombia, whether the Company will be
successful in the Arbitration, as well as other risk factors set
out under the heading "Risk Factors" in the Company's Annual
Information Form dated March 27,
2017, which is available on SEDAR at www.sedar.com. Although
management of the Company has attempted to identify important
factors that could cause actual results to differ materially from
those contained in forward-looking statements or forward-looking
information, there may be other factors that cause results not to
be anticipated, estimated or intended. There can be no assurance
that such statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated,
estimated or intended. Accordingly, readers should not place undue
reliance on forward-looking statements and forward-looking
information. The Company does not undertake to update any
forward-looking statements or forward-looking information that are
incorporated by reference herein, except in accordance with
applicable securities laws. Investors are cautioned not to put
undue reliance on forward-looking statements due to the inherent
uncertainty therein.
The Canadian Securities Exchange has not reviewed and does not
accept responsibility for the adequacy or accuracy of this news
release.
SOURCE Eco Oro Minerals Corp.