Lupaka Gold skyrockets on arbitration win against Peru

[Redator]

Shares of Lupaka Gold (TSXV: LPK, FRA: LQP) skyrocketed to a three-year high on Wednesday after the Canadian miner after winning $65 million in its international arbitration case against Peru, five years after launching the case.

In a press release, the company confirmed it has the final award from the International Centre for Settlement of Investment Disputes (ICSID) in the arbitration it initiated against the Peruvian government back in 2020.

Shares of Lukapa Gold gained as much as three-fold from C$0.08 to C$0.24 on the news, for its highest since June 2022. As of 1:40 p.m. ET, the stock traded at C$0.14 for an intraday gain of 167% and a market capitalization of C$4.1 million.

The dispute stems from a protest by the community of Parán in October 2018 that blockaded access to Lupaka’s Invicta gold development project, located 120 kilometres north of the capital city Lima.

The blockade, which the company considered to be illegal, severely impacted its ore processing operations and limited cash flow generation. A year later, Lupaka lost the project due to its inability to pay back its lender.

Before the situation started, Lupaka had completed 3,000 metres of underground workings, agreements from the community of Lacsanga and a 29-kilometre access road sufficient to handle 40-tonne ore trucks. The project was forecast to produce 185,000 oz. of gold equivalent over a six-year life.

In the arbitration launched in November 2020, the British Columbia-based gold miner alleged that the Peruvian government had supported this protest, thus breaching its free trade agreement with Canada. In its claim, it was seeking compensation of more than $100 million.

In the arbitral tribunal’s decision this week, the Peruvian government was ordered to pay Lupaka a total amount of $65 million.

Lupaka’s CEO Gordon Ellis said while receipt of the final award is “exceptionally good news” and a key step in arbitration proceedings against Peru, it “does not necessarily mean that the company will recover the amounts awarded in the immediate future.”