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Shares of London-listed mining and exploration company Panthera Resources PLC (LON: PAT) edged 5.14% higher after the company explained why it hired Fasken Law Firm to explore legal options against the government of Rajasthan.
According to the company’s managing director, Mark Bolton, the Rajasthan government did not have legal grounds to reject its application for a prospecting license for the Bhukia mine, which has up to 7 million ounces of proven gold resources.
Panthera had completed a successful reconnaissance study on the Bhukia mine approved by the government, which then rejected its application to start prospecting for gold in the mine.
The miner is basing its suit on the Australia-India Bilateral Investment Treaty of 26 February 1999 following the “recent successful $1.2 billion international arbitration award in favour of Cairn Energy PLC against the Government of India conducted under a similar bilateral investment treaty.”
Panthera appointed Fasken as a legal advisor to help explore its legal options after the government of Rajasthan reneged on its promise to approve the prospecting license if the firm dropped its legal suits, which it did over two years ago.
The miner still hopes to resolve the issue amicably via negotiations but is considering legal action if discussions fail to yield a fair result.
The company is motivated by the recent award to Cairn Energy despite the Indian government saying it will appeal to international courts. The government also resisted attempts to resolve the issue via any agreement outside its current laws.
The legal path for Panthera in this currently lies with the Rajasthan High Court, which has issued a stay order as the case proceeds.
Panthera Resources share price.
Panthera Resources shares edged 5.14% higher to trade at 18.4p, rising from Tuesday’s closing price of 17.5p, but later gave up all its gains.
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