Lupaka Gold is sueing the Peruvian government

Lupaka Gold (TSX-V: LPK) has filed a petition with the World Bank's International Center for Settlement of Investment Disputes for arbitration over what it believes is insufficient support for the Peruvian government in a social conflict who has brought all work at the Invicta mine to a standstill in the past two years.

The Canadian miner is demanding more than $ 100 million in compensation. The motion 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 dispute arises from the violations of the free trade agreement by Peru in connection with Lupaka's investments in Peru. More precisely, the dispute stems from the actions of the Republic of Peru, namely the illegal activities of its subdivision, the Paran Municipality, which are illegally involved in Lupaka's project , which is held through Invicta Mining Corp., has penetrated and permanently blocked the site, as well as the lack of support from the Peruvian police, prosecutors and central government officials to lift the illegal blockade and restore Lupaka's rights to his investments "said the company in a media statement.

The protest action has been taking place since October 2018. The road in front of the mine’s main gate has since been blocked and access to the site has been restricted. According to Lupaka, the blockers were often violent and "did not hesitate to fire rifles and the mining personnel and people of the Lacsanga community who own the surface rights and with whom the company's subsidiary, Invicta Mining, signed mutually beneficial agreements." has to threaten ".

"Both Lacsanga and IMC asked the authorities for assistance in lifting the blockade and re-establishing access to the mine. This assistance was not provided," said Lupaka Gold's submission to ICSID. Given that the conflict was not resolved, Lupaka was unable to process the ore at the mine and create enough cash flow to repay a gold loan that funded Invicta's development. This situation resulted in the lender closing the loan in August 2019 and Lupaka losing its investment. "Lupaka's loss of IMC and the mine was a result of the acts and omissions of Peru. Lupaka has therefore initiated arbitration proceedings against the Republic of Peru for more than $ 100 million in compensation, which will continue in the course of the arbitration is to be quantified, "said the company's announcement.

Before the situation began, the Lupaka subsidiary had tapped around 3,000 meters of underground mine workings, signed municipal contracts with the Lacsanga municipality, completed a 29-kilometer access road sufficient for 40-ton ore trucks, and numerous metallurgical tests on the order of a few a hundred to a few thousand tons. In September 2018, the IMC requested a final inspection of the completed work to allow dismantling to begin, but then the demonstrators started beating the plant. Lupaka had projected a six year mine life and total production of 185,000 ounces of gold equivalent.