South American Silver Gets Arbitration Funding
South American Silver Corporation — which is incorporated in Bermuda — has announced that it has entered into an agreement with a third party funder prepared to cover the company’s future costs and expenses related to the international arbitration proceedings against the Plurinational State of Bolivia for the expropriation of the Malku Khota project.
On July 12, 2012, Bolivian president Evo Morales announced his intention to revoke South American Silver’s permit for the Malku Khota concession by decree and the matter went into arbitration shortly afterwards. Malku Khota is considered one of the largest known undeveloped silver and indium resources in the world
The funding is on a non-recourse basis and includes costs and expenses of the enforcement of any award rendered by the arbitration tribunal. No broker has acted in the transaction.
The fund specializes in the funding of international arbitration proceedings and in providing assistance in connection with the enforcement of arbitration awards.
“South American Silver continues to have control over the conduct of the international arbitration proceedings and to have the right to settle with Bolivia, discontinue proceedings, pursue the proceedings to trial and take any action it considers appropriate to enforce any resulting judgment or award,” said a company spokesman.
Under the terms of the privileged arbitration funding agreement, the company has given certain warranties and covenants to the fund and has provided security for its obligations.
“In consideration for the funding, the company has agreed to pay to the Fund a portion of any recoveries received pursuant to the arbitration proceedings or any settlement with Bolivia,” said the South American Silver spokesman.
Phillip Brodie-Hall, president and CEO of South American Silver said, “This is a significant milestone for South American Silver and is very good news for our shareholders.
“The fact that a large and respected international investment fund is prepared to put its money at risk to support our case speaks volumes for the validity and value of our claim against Bolivia.
“This agreement provides us with the funds we need to pursue our case against Bolivia, at the same time freeing-up cash to allow us to actively invest in our core business of acquiring, exploring and developing quality mineral projects.”
