TORONTO/MELBOURNE Oct 14 OceanaGold Corp
has lost a claim seeking some $284 million in
compensation from El Salvador for failing to issue permits
allowing it to dig a gold mine in the Central American country,
according to an arbitration decision announced on Friday.
The World Bank's International Centre for Settlement of
Investment Disputes (ICSID) found in favour of El Salvador,
OceanaGold said in a press release, and the government was
awarded $8 million to cover legal costs for the claim, first
brought by Vancouver-based Pacific Rim Mining in 2009.
Pacific Rim was taken over in 2013 by OceanaGold, which
continued to pursue the claim while at the same time trying to
negotiate with the El Salvadoran government to win mining and
environmental permits for its El Dorado project.
OceanaGold estimates El Dorado holds 1.5 million ounces of
gold and 11.4 million ounces of silver resources.
The company said in a statement that it was disappointed
with the tribunal's decision and would review the ruling before
evaluating the next steps for its El Salvador unit.
Pacific Rim first applied for a mining concession in 2005.
El Salvador, however, has blocked new mining permits since 2008
amid concerns about potential damage to a major river and water
supplies from cyanide, which is used to extract gold and silver
A coalition of non-profit groups, backed by the charity
Oxfam, have long campaigned against mining in impoverished El
Salvador, questioning whether mines with short lives can really
aid long term development.
OceanaGold, which has assets in the Philippines, New Zealand
and the United States, expects to produce 385,000 to 425,000
ounces of gold and 19,000 to 21,000 tonnes of copper in 2016.
(Reporting by Susan Taylor and Sonali Paul; editing by Grant