Toronto, Ontario – November 23, 2021 – Further to its news release dated February 10, 2020, Galway Gold Inc. (TSX-V: GLW) (“Galway Gold” or the “Company“) announces an update to the status of the Company’s arbitration claim against the Republic of Colombia brought under the Canada-Colombia Free Trade Agreement (“FTA“) to enforce Galway Gold’s rights under the FTA, as well to provide an update on a similar claim filed by miner Eco Oro Minerals Corp. (“Eco Oro”) against Colombia, which is based on the same FTA and legislative changes and Colombian Court decisions as Galway Gold’s claim.
While Galway Gold’s arbitration is proceeding toward a hearing, an important decision in a similar proceeding involving Eco Oro was recently issued.
“Although the decision of the Tribunal in the Eco Oro arbitration is not binding on the Tribunal in Galway Gold’s arbitration, we are obviously encouraged that the Eco Oro Tribunal accepted jurisdiction and found liability on behalf of Colombia and in favor of Eco Oro,” says Robert Hinchcliffe, President and CEO of Galway Gold. “We look forward to a final decision from the Eco Oro Tribunal determining the quantum of damages to be awarded to Eco Oro.”
Galway Gold’s Arbitration Claim
In an arbitration proceeding under the arbitration rules of the International Centre for Settlement of Investment Disputes (“ICSID”), Galway Gold contends that Colombia breached its obligations owed to Galway Gold, including specific obligations under the FTA. The claims include Colombia’s refusal or failure to compensate the Company for the losses incurred as a consequence of Colombia’s prohibition of mining in the páramos (high altitude eco-systems). Galway Gold seeks damages for all losses, including the value of its property and rights, and the Company’s costs incurred in the acquisition and development of its investment in the Reina de Oro mining project.
On December 12, 2019, the Arbitral Tribunal issued a procedural order, which, among other things, bifurcated the procedure into two phases. Phase One is a determination of jurisdiction and liability issues. Phase Two is a determination of damages, discovery jurisdiction and liability as found.
Galway Gold has submitted its memorials and witness statements to Arbitral Tribunal and Colombia has submitted its memorials and witness statements. The Arbitration Tribunal is currently reviewing the materials and the hearing on jurisdiction and liability is currently scheduled to proceed on June 20-24, 2022.
If the Tribunal rules that it has jurisdiction and finds Colombia to be liable damages to Galway Gold, a second hearing (and briefing scheduling) will be ordered as part of the Phase Two procedure. Any damages to be awarded to Galway Gold will be determined at this Phase Two hearing.
Developments in the Eco Oro Arbitration
Eco Oro also has an arbitration against Colombia under the FTA pending before ICSID. In its arbitration, Eco Oro has alleged that Colombia breached its obligations under the FTA in failing to compensate Eco Oro for the losses incurred as a consequence of Colombia’s prohibition of mining in the páramos. The prohibition on mining is based upon the same FTA and legislative changes and Colombian Court decisions. As such, we believe that Eco Oro’s claims against Colombia are similar to Galway Gold’s claims against Colombia.
On September 9, 2021 the Tribunal in the Eco Oro arbitration issued its “Decision on Jurisdiction, Liability and Directions on Quantum” (the “Decision”). According to a Procedural Order issue by the Tribunal, the Tribunal ruled that it had jurisdiction over the claims raised by Eco Oro, and that Colombia acted in breach of Article 805 of the FTA, entitling Eco Oro to damages. The Procedural Order also ordered the parties to file additional submissions in response to certain questions regarding the quantum of Eco Doro’s damages. These questions essentially must be responded to within 120 days, although depending on the parties’ position, there may be an additional 120 days briefing period. After the matter is fully briefed, the Tribunal in the Eco Oro arbitration is expected to render a decision on the amount of damages.
Each Tribunal considers each case before it on its own facts, and the Tribunal in Galway Gold’s arbitration is not bound by any decision made by the Tribunal in Eco Oro’s arbitration. Nonetheless, Galway Gold believes that the recent Decision issued by the Tribunal in the Eco Oro arbitration finding jurisdiction and liability by Colombia (in an amount to be determined) provides useful guidance in Galway Gold’s arbitration.
Further announcements will be made on the status of the arbitration proceedings.
Galway Gold Inc.
Cautionary Note Regarding Forward-Looking Statements:This News Release includes certain “forward-looking statements” which are not comprised of historical facts. Forward-looking statements include estimates and statements that describe Galway Gold’s future plans, objectives or goals, including words to the effect that Galway Gold or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, or “plan”. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to Galway Gold, Galway Gold provides no assurance that actual results will meet management’s expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, statements related to the termination of the Reina de Oro project, the ability to recover damages with respect to the termination of the Reina de Oro project in any amount or not at all, the applicability of the results of the Eco Oro arbitration to the potential outcome of the Galway Gold arbitration, Galway Gold’s objectives, goals or future strategic plans and new corporate opportunities, and the Company’s ability to find a viable resource project in Colombia or an alternative mining jurisdiction. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to an inability to recover damages in respect of the termination of the Reina de Oro project, failure to identify a viable resource project, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital and operating costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, and those risks set out in Galway Gold’s public documents filed on SEDAR. Although Galway Gold has attempted to identify important factors that could cause actual actions, events, or results to differ materially from those described in the forward-looking information, there may be other factors that cause actions, events, or results not to be as anticipated, estimated, or intended. There can be no assurance that forward-looking information will prove to be accurate. The forward-looking information contained herein is presented for the purposes of assisting investors in understanding Galway Gold’s plans, objectives, and goals and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking information. Galway Gold does not undertake to update any forward-looking information, except in accordance with applicable securities laws. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.