Canada’s Trimetals Mining has expressed its disappointment at the outcome of the international arbitration against the Bolivia government and slammed the $28-million award as insufficient.

Last week, the arbitration court in The Hague ruled in favour of Bolivia in the dispute with Trimetals subsidiary South American Silver over the 2012 expropriation of the Malku Khota silver project and awarded the company a total of $28-million in damages, including $18.7-million for its investment in the project and $9-million in interest.

However, Trimetals president and CEO Eric Edwards said on Friday that the company had expected more, considering the size and quality of the Malku Khota deposit.

“Given the more than two years the tribunal considering the evidence and drafting the award, including detailed damages calculations and technical evidence presented by renowned quantum and mining experts, regarding the size and quality of the massive deposit at Malku Khota and fair market value of the expropriated asset, we certainly expected a more properly reasoned, just and fair outcome and an adequate amount of compensation as opposed to simply awarding amounts invested or ‘sunk costs’ resulting from Bolivia’s illegal conduct,” he said in a statement.

The company stressed that Bolivia, in its announcement of the award, stated that the Malku Khota deposit was valued at $8-billion, despite arguing during the arbitration that South American Silver’s $307.2-milion valuation of the project was exaggerated.

“We are still evaluating the award and its contents in order to consider next steps, including, among other things, seeking annulment of the award or enforcement under the New York Convention should Bolivia refuse to pay or unduly delay payment of the amounts due and owing,” Edwards stated.

The company’s stock took a beating on the TSX on Friday, losing nearly 29% of its value to close at C$0.05 a share.

Newswire Reuters reports that the miner had previously rejected an $18-million offer from Bolivia to buyout its rights. Boliva has contended that the miner had violated the country’s environmental rules and incited unrest among its indigenous neighbours.

Trimetals said it noted that one of the three arbiters on the tribunal, Professor Francisco Orrego Vicuña, who is now deceased, disagreed with the opinion set out in the award and stated that he believed, among other things, the tribunal placed too much of the blame for issues with the indigenous communities upon South American Silver, when it was Bolivia that was responsible for maintaining public order.  Trimetals added that Vicuña also stated there was evidence that Bolivia wanted to take over the Malku Khota project before any social unrest arose and expressed the view that South American Silver was not afforded due process.

Malku Khota has a NI 43-101-qualified indicated resource of 255-million tonnes of mineralised material containing 230.3-million ounces of silver, 1 481 t of indium and 1 082 t of gallium at a grade of 28.7 g/t silver, 5.8 g/t indium and 4.3 g/t gallium (43.8 g/t silver equivalent ). Its inferred resource is 230-million tonnes, containing 140 million ounces of silver, 935 t of indium, and 1 001 t of gallium at a grade of 18.9 g/t silver, 4.1 g/t indium and 4.3 g/t gallium (33.0 g/t silver equivalent).

The company published a preliminary economic assessment (PEA) study in May 2011, showing a bulk-mineable heap leach operation with the potential to be one of the largest new silver, indium and gallium producing mines in development with more than 13.2-million ounces a year of silver production over the first five years.

The PEA showed a pre-tax net present value for the project using a 5% discount rate of $1.5-billion and an internal rate of return of 63% at the “middle price case” of $25/oz of silver.