Panthera Resources (LON: PAT) shares are down another 12% today. PAT shares are down because the company has lost yet another court ruling in its fight over that Indian gold mine prospect. The domestic courts have now pretty much been exhausted to it’s off to the international arbitrators to try and get this sorted. That takes years - years and years.
The basic argument is that the company spent years and substantial money on exploring and proving a gold prospect in India: “The Company made its initial investment in Bhukia (through IGPL) in January 2005. IGPL provided all of the funding and managed the joint venture exploration programmes. The work programmes were carried out in accordance with government rules and regulations and reported on time and in a professional manner.
IGPL's right to be granted a Prospecting Licence over Bhukia, through its joint venture holding, has been consistently frustrated over an extended period by the Government of Rajasthan ("Rajasthan"). The Prospecting Licence Application over Bhukia was rejected by Rajasthan again in August 2018 on various spurious and legally untenable grounds.”
Now this is a little more complex than “They stole the mine from us!” Because it is about the issue of the next set of licences. On the other hand we can think whatever we like about the Indian licence and legal system, obviously.
Panthera Resources share price from Google Finance
It takes millions to get a case through international arbitration - as well as those many years. But as we’ve said before about Panthera: “Today the announcement is that the financing has been agreed: “On 28 February 2023, the Company announced that IGPL had entered into a conditional arbitration funding agreement (the "AFA") for up to US$10.5 million (the "Facility") in litigation financing with LCM Funding. The Facility has now been increased to US$13.6 million, following the positive results of a comprehensive and robust due diligence process by LCM Funding.” OK, so that now means the arbitration case against India over that gold mine can now proceed.
Which is great, of course, but it’s also worth noting that these things take years. It’s also true that governments win the majority of such ISDR cases. So there’s uncertainty still as to the outcome plus the certain knowledge that this will take some years - we’d say between 3 and 5 based on a certain experience - to come to an actual verdict. “
One more thing to add, that litigation financing is non-recourse. So this is a contingent claim that just sits there within Panthera until decision day. The short to medium term valuation is going to be about their other mining projects, not this.