Eco Oro Minerals Corp. wants US$764 million in compensation from the Colombian government over issues it faced developing the Angostura gold-silver property.
It is the first time Eco Oro has pinned down the amount of compensation it claims Colombia owes in damages, and it did so in a filing made to the World Bank's International Centre for Settlement of Investment Disputes, as confirmed by a company spokesperson. The company also reviewed some of the details of its claim in its March 20 release.
The junior explorer filed for international arbitration in December 2016 and has alleged the Colombian government unfairly blocked Angostura's development by creating a protected area that covered part of the project.
It is not clear how long the case will take to unfold. A legal expert in international arbitration, who did not want to be named, told S&P Global Market Intelligence that timelines vary widely. Typically, they take a couple of years but, in extreme instances, can drag on for more than a decade. Cases involving states usually take longer.
"States do not work fast," the expert said in an interview. "And working with a state is cumbersome."
Eco Oro contends the government misled it, as the exploration company delineated resources at Angostura and spent US$250 million on the project to advance the deposit toward development. The company said the government signaled that it supported Angostura and defined it as a project of national interest in 2013.
In 2014, the government moved forward with creating a conservation area that would limit mining in some areas. Eco Oro said its project was to be excluded from the conservation area, known as the Santurbán Páramo.
But after a court decision and subsequent moves by the government, the conservation area was extended across most of the concession that covered the Angostura deposit. Doing so made it impossible to develop the project.
For that, Eco Oro said it is owed compensation, estimating Angostura's fair market value at US$696 million and adding US$68 million in interest as the basis for its compensation request.
A spokesperson for the Colombian government could not immediately be reached for comment.
Eco Oro said a three-person tribunal will hear its case and consider the issue of compensation.
While every case is different, states tend to win, according to the legal expert, who said that "states prevailed in more than half of the cases" when looking at recent statistics. The expert spoke generally and was not talking about Eco Oro's claim specifically.
Outcomes hinge on details of a case as well as bilateral treaties that govern what protections a company may deserve and vary from country to country, he said.
Angostura hosts measured and indicated resources containing 2.2 million ounces of gold and 9.4 million ounces of silver within 15.1 million tonnes grading 4.57 g/t of gold and 19.3 g/t of silver, with inferred resources containing 1 million ounces of gold and 4.2 million ounces of silver within 6.9 million tonnes grading 4.70 g/t of gold and 19.0 g/t of silver.
The resource estimate was completed in June 2015 and uses a cutoff of 2.5 g/t of gold.