Lupaka Gold has received a favourable final award from the Arbitral Tribunal in its arbitration against the Republic of Peru concerning Lupaka’s Invicta gold project.
The dispute, initiated over violations of the Free Trade Agreement (FTA) between Canada and Peru, has concluded with the tribunal ordering Peru to pay Lupaka $65m.
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The award includes $40.4m in compensation with interest, and $4.2m for costs and expenses related to the arbitration.
Interest on these amounts is calculated at the London Interbank Offered Rate (LIBOR) plus 4% up to 30 June 2023, and United States Treasury (UST) plus 5% thereafter, compounded annually.
The award also mandates compound interest on the arbitration costs at UST plus 5% from the date of the award until the final payment.
The arbitration request was lodged in October 2020 under the International Centre for Settlement of Investment Disputes (ICSID) Convention and the FTA’s provisions in Washington DC.
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By GlobalDataThe dispute centres on the Republic of Peru’s failure to support Lupaka in the face of illegal actions by the Community of Parán, which included an invasion and blockade of the Invicta project site, operated by Lupaka through Invicta Mining.
Before the blockade in September 2018, Invicta Mining had made significant progress on the project, including the development of 3,000m of underground workings, securing community agreements, constructing a 29km access road and conducting extensive metallurgical testing.
However, the blockade erected by the neighbouring Community of Parán halted the final inspection required for exploitation to commence, leading to the arbitration claim.
Lupaka CEO Gordon Ellis stated: “Receipt of the final award is exceptionally good news and a key step in our arbitration proceedings against the Republic of Peru.
“However, it does not necessarily mean that the company will recover the amounts awarded in the immediate future. We may have a few more hoops to jump through prior to the company actually receiving any cash.”
Lupaka is consulting with legal counsel to determine next steps and will prioritise payments to its funding partner, Benchwalk, upon receipt of the award proceeds.
