Lupaka Gold's Arbitration Claim: Uncertainty and Opportunity

VANCOUVER, British Columbia - Lupaka Gold Corp. (TSX-V: LPK, FRA: LQP) has received an update on its ongoing arbitration claim against the Republic of Peru, with the final ruling expected in the first quarter of 2025. The claim, which has been ongoing for five years, involves a dispute over the Company's Invicta gold project in Peru. As the arbitration process continues, investors and stakeholders are left to navigate the uncertainty and potential implications for Lupaka's mining operations and shareholder value.

The delay in the arbitration process can negatively impact Lupaka's ability to secure new investments and partnerships. A study on investor-state dispute settlement (ISDS) arbitration cases found that such delays can reduce merger flows, particularly in weak-institution or less developed target countries (Source: Number 2). This substantiation effect may deter potential investors and partners from engaging with Lupaka until the arbitration process is resolved. Additionally, the uncertainty surrounding the outcome of the arbitration can create a risk-averse environment, further discouraging new investments and partnerships.

The ongoing arbitration claim has also impacted Lupaka's operational costs and cash flow management. The arbitration process involves legal fees and other expenses, which can be significant. According to the company, it has the financial backing of Bench Walk Advisors, a global litigation financier with over USD 250 million of capital deployed across in excess of 100 commercial cases. This financial support can help Lupaka manage its cash flow during the arbitration process. However, the uncertainty and potential costs associated with the arbitration may also impact Lupaka's operational decisions and cash flow management.

A favorable ruling for Lupaka in its ongoing arbitration claim against the Republic of Peru could significantly boost its mining operations and shareholder value. The claim, which has been ongoing for five years, involves a dispute over the Company's Invicta gold project in Peru. A positive outcome could potentially unlock the project's full potential, leading to increased gold production and revenue. This, in turn, could drive up Lupaka's share price, as seen in similar cases where successful arbitration claims have led to substantial share price increases (e.g., Lundin Mining Corp. and its arbitration win in 2019). Moreover, a successful resolution could enhance Lupaka's reputation and investor confidence, attracting further investment and potentially leading to strategic partnerships or acquisitions.



To mitigate potential risks from an unfavorable ruling, Lupaka could consider diversifying its portfolio, strengthening its financial position, engaging in strategic partnerships, reviewing and optimizing operations, and maintaining strong legal representation. By implementing these strategic moves, Lupaka can better position itself to navigate the uncertainties associated with the arbitration process and ensure the long-term success of the company.

In conclusion, the ongoing arbitration claim against the Republic of Peru presents both challenges and opportunities for Lupaka Gold Corp. While the delay in the arbitration process can negatively impact the company's ability to secure new investments and partnerships, a favorable ruling could significantly boost its mining operations and shareholder value. As the final ruling approaches, investors and stakeholders should closely monitor the situation and consider the potential implications for Lupaka's future prospects.