Sarama Resources Seeks Arbitration Against Burkina Faso

In the dynamic world of investments, some investors are drawn to the thrill of options and risky stocks, while others, like myself, prefer the stability and predictability of "boring but lucrative" investments. Today, we'll explore a recent development in the mining sector that exemplifies this preference: Sarama Resources' decision to submit a request for arbitration against Burkina Faso.



Sarama Resources, a Canadian-Australian mining company, has formally commenced international arbitration proceedings against the State of Burkina Faso. The dispute centers around the expropriation of the Company's Sanutura Project, which featured a multi-million ounce gold resource. The Company is seeking full compensation for the loss and damages suffered as a result of certain acts and omissions by the Government of Burkina Faso.

The arbitration claim will be pursued according to the established and enforceable legal framework of the International Centre for Investment Disputes (ICSID), which has a proven track record of handling investor-state disputes. ICSID has previously awarded significant damages to claimants, such as A$180M and A$490M, in similar cases. Sarama expects to appoint a quantum expert who will prepare a professional damages assessment for review by the arbitration tribunal.

Sarama has engaged Boies Schiller Flexner (UK) LLP, a leading international law firm, to assist with legal matters pertaining to the dispute. The Company has also secured a non-recourse litigation funding facility of A$6.7M to cover all fees and expenses related to its Claim to Arbitration. This funding, provided by Locke Capital II LLC, enables Sarama to pursue its arbitration claim more aggressively without putting its core business at risk.

If successful, Sarama will seek damages of no less than A$180 million, which could significantly boost the company's financial position. The funding facility ensures that Sarama's pursuit of compensation is not hindered by financial limitations, potentially leading to a more favorable outcome in the arbitration process.

In conclusion, Sarama Resources' decision to pursue arbitration against Burkina Faso demonstrates the value of stability and predictability in investments. By securing non-recourse funding and engaging a reputable law firm, Sarama is positioning itself to maximize its chances of success in the arbitration process. As investors, we should appreciate the importance of such strategic moves in protecting and enhancing the value of our investments.