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Canadian gold explorer Winshear Gold (TSXV: WINS) has ended a longstanding dispute with the Tanzanian government in regards to the company’s licences for the SMP project. On Monday, the parties have reached a $30 million settlement, of which the company would receive approximately $18.5 million after subtracting the payment of funding and legal costs.
Winshear had previously been seeking at least $96 million in damages through the International Court for the Settlement of Investment Disputes (ICSID), alleging that the government of Tanzania had breached its obligations under the Canada-Tanzania Bilateral Investment Treaty.
The company had been conducting exploration at SMP project since 2006, and published an NI-43-101-compliant resource. Subsequently, it applied for and was granted four retention licences covering the resource area.
However, in 2017, Tanzania announced wide-ranging amendments to its mining regulation, which abolished the “retention licence” classification. Winshear’s retention licences were cancelled in 2018, and the rights to the licensed areas were transferred to the government.
In late 2019, the Mining Commission of Tanzania announced a public invitation to tender for the joint development of areas previously covered by the company’s licences. According to Winshear, the abolition of the SMP licences and the removal of the rights to the land rendered its project “valueless.”
As a response to what it considers to be an “illegal expropriation of the SMP gold project” by the Tanzanian government resulting in the loss of a mining asset, Winshear began international arbitration proceedings in July 2020, seeking compensation in line with its investment in Tanzania and the value of the project at the time that tenure was “expropriated.”
“This settlement is good for both Tanzania and Winshear and we are pleased to reach a mutually acceptable conclusion to this matter. It is time for both Parties to move on and we wish Tanzania success in attracting new investment,” Winshear CEO Richard Williams said in a press release on Monday.
Winshear is one of three mining companies that have requested compensation from the Tanzania government through the ICSID tribunal over licence expropriation claims.
Earlier this year, Indiana Resources (ASX: IDA) also settled its dispute with the African nation, with the ICSID awarding $109 million to the Australia-listed miner for “unlawful expropriation” of the Ntaka Hill nickel project.
Comments
Bobby44
Beautiful nation. Wonderful people. Crappy politics creates a poor judicial system and lousy investment climate. I own no stock in any company that does business in nations like this. Yes, past dealings make me bitter too.