Lupaka Gold is seeking compensation from the Peruvian government
(Kitco News) - Lupaka Gold has submitted a $100 million request for arbitration before the World Bank’s International Centre for Settlement of Investment Disputes. The claim is in relation to a lack of support from the Peruvian government in a social conflict that has halted all work at the Invicta mine over the past two years.
The compensation claim is based on Article 36 of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, known as the ICSID Convention, and Article 824 of the Free Trade Agreement between Canada and the Republic of Peru.
The company said “The dispute arises out of Peru’s breaches of the FTA in relation to Lupaka’s investments in Peru. More specifically, the dispute stems from the Republic of Peru’s actions, namely the illegal acts of its subdivision, the Community of Parán, which illegally invaded Lupaka’s project held through Invicta Mining Corp. and set up a permanent blockade to the site, as well as from the lack of support from the Peruvian police force, prosecutors and central government officials to remove the illegal blockade and restore Lupaka’s rights to its investment,”
There have recently been protests outside some of the mining areas. The road which leads to the mine's access has been blocked since 2018. Both Lacsanga and IMC requested that authorities assist to remove the blockade and restore access to the mine. This assistance was not provided.
Looking at the companies share price on the weekly chart below it is clear it has been affected by the issues. The price hit a high of $0.28 in 2018 and since has dropped 86% since. Lupaka had forecasted a six-year mine life and a total production of 185,000 gold equivalent ounces. Keep an eye on the story as if the issues in Peru resolve there could be some potential upside in store.