Canadian gold exploration firm, Winshear Gold Corp. (TSX-V: WINS), has announced the successful conclusion of its settlement agreement with the United Republic of Tanzania concerning the dispute over the company’s SMP Gold Project.
The dispute originated from Winshear, previously known as Helio Resource, and its investment in the SMP Gold Project located in the Saza Shear Zone within the Lupa Goldfields of southwestern Tanzania.
Winshear began its exploration activities for this project in 2006.
Through its Tanzanian subsidiary, the company obtained four Retention Licences covering the mineral resource areas.
These licenses were initially valid for five years, with an option for a five-year extension before the necessity to apply for a Mining Licence.
However, in 2017, Tanzania introduced significant amendments to the Mining Act 2010.
A prominent change was the removal of the Retention Licence classification without offering a replacement.
In January 2018, Tanzania enacted the Mining (Mineral Rights) Regulations 2018.
According to these regulations, all retention licenses issued before January 10, 2018, were nullified.
Consequently, rights to areas under these licenses, including those of the SMP project, were transferred to the Tanzanian government.
Winshear argues that these legislative changes made the SMP Gold Project worthless.
In January 2020, they delivered a Notice of Intent to the Tanzanian Attorney General, signaling their intention to arbitrate based on the 2013 Investment Protection Agreement between Canada and Tanzania.
This action officially acknowledged the investment dispute between Winshear and the Tanzanian government.
The arbitration took place in February 2023, with a judgment anticipated within the subsequent six months.
In October 2023, both parties settled on a sum of USD 30,000,000 to resolve the dispute and end the arbitration. The company received the funds on October 16, 2023.
After deducting funding and legal expenses, Winshear’s net amount stands at approximately USD 18,500,000.
Richard Williams, CEO of Winshear Gold, remarked, “This settlement benefits both Tanzania and Winshear. We are delighted to arrive at a mutually agreeable resolution. It’s time for both parties to move forward, and we wish Tanzania success in securing new investments. We extend our sincere gratitude to our legal team, Lalive, for their diligent preparation and presentation of our case.”
Another international mining company, Montero Mining & Exploration (TSX.V:MON), is currently engaged in a legal battle with the Tanzanian government, having initiated arbitration proceedings due to the confiscation of Retention Licences.
Montero seeks CAD 90 million in damages related to its Wigu Hill Rare Earth Element project in Tanzania’s Morogoro region.
Additionally, another international mining company awaits a settlement of USD 113 million.
In June 2023, Indiana Resources Limited (ASX: IDA) was granted USD 109.5 million as compensation for the unauthorized takeover of the Ntaka Hill Nickel Project in southern Tanzania.
Indiana’s legal representatives dispatched a payment demand letter to the Tanzanian Solicitor General for USD 113,603,591.83, due by August 17, 2023.
Bronwyn Barnes, Executive Chairman of the company, stated, “We anticipate Tanzania fulfilling its commitments under the bilateral investment treaty, reflecting its reputation in the global community.”