SMP Gold Project
Introduction
Winshear has retained LALIVE (London) LLP as legal counsel to pursue its arbitration claims against the Tanzanian government regarding breaches of Tanzania’s obligations under the Canada-Tanzania Bilateral Investment Treaty (BIT) relating to the SMP Gold project in Tanzania. The Company has reached agreement with Delta Capital Partners Management LLC to fund its arbitration expenses in return for receiving percentage of any settlement moving forward so that the Company may focus all of its equity funding on exploration of its Peruvian mineral projects.
Historical Background
The dispute arises out of certain acts and omissions of Tanzania in breach of the BIT and international law, relating to the Company’s investment in the SMP Gold Project located in southwest Tanzania (“the Project”). The Company commenced exploration activities on the Project in 2006 culminating in an NI-43-101-compliant, drill-defined mineral resource. Subsequently, the Company, through its Tanzanian subsidiary, applied for and was granted four Retention Licences which covered the Project’s mineral resource areas (the “SMP Retention Licences”).
In July 2017, the Government of Tanzania announced wide-ranging and severe amendments to the Mining Act 2010, which, inter alia, abolished the legislative basis for the Retention Licence classification with no replacement classification. On 10 January 2018, Tanzania published the Mining (Mineral Rights) Regulations 2018. Under Regulation 21 of said Regulations, Tanzania cancelled all Retention Licences issued prior to 10 January 2018, at which point they ceased to have any legal effect.
The rights over all areas under Retention Licences, including those under the SMP Retention Licences, were immediately transferred to the government of Tanzania. On 19 December 2019, the Mining Commission of Tanzania announced a public invitation to tender for the joint development of areas previously covered by Retention Licences, including the SMP Retention Licences (the “19 December Tender”). The abolition of the SMP Retention Licences and the removal of the rights to the land conferred thereunder has rendered the Project valueless.
Thus, as a direct consequence of the legislative, regulatory and other measures by Tanzania, the Company has lost completely its investment.
Current Status
- Winshear has written off the value of the SMP gold deposit as a result of Tanzania cancelling the SMP Retention Licences and transferring the rights there under to the government.
- The Company filed the 180-day Notice of Intent to file arbitration on January 10, 2020 to protect its substantial investment.
- The Company commenced international arbitration proceedings on July 14, 2020 after the 180 day notice period expired without communication from the Tanzanian Government.
- On December 7, 2020, Winshear secured funding from Delta Capital Partners Management LLC for the arbitration proceedings.
- As of the first quarter of 2021, the arbitration process is ongoing.
Winshear confirms that it is taking all necessary actions to preserve its rights and protect its investments in Tanzania. The Company’s desire is for both parties to reach a mutually acceptable outcome.