PERTH (miningweekly.com) – Cuba-focused gold developer Antilles Gold is claiming A$45-million in damages against the Dominican Republic government in arbitration proceedings.

The claims result from what the company called the ‘failure of government’ to meet contractual obligations related to a gold tailings processing project which was completed in at the end of 2019.

The Dominican Republic government has until March 10 to finalise its submissions to the Arbitration Tribunal, and from then the Tribunal from the World Bank’s International Center for Settlement of Investment Disputes would hear legal representations and witnesses in Washington DC, between June 5 and 9.

The Tribunals’ findings are expected by September next year, Antilles said on Tuesday.

In 2004, a subsidiary of Antilles Gold, EnviroGold (Las Lagunas) (EVGLL), entered into a contract with the Dominican Republic government to oxidize 5.4-million tonnes of sulphide gold tailings from the Pueblo Viejo mine that were stored in the Las Lagunas dam as the principle element of an environmental remediation program to limit acid mine drainage from the dam, and permitted EVGLL to extract gold and silver from the tailings, with the expectation of a profitable operation.

The basic commercial terms were that EVGLL would be exempted from any national or municipal tax, including income tax, but pay to the government 25% of the cash flow generated after recovery of EVGLL’s investment in the project, plus a 3% royalty on precious metals.

A condition precedent to the contract was the requirement for EVGLL to gain approval from the Congress of the Dominican Republic for a waiver of taxation, which EVGLL received within the stipulated time frame.

Despite these commercial terms being clearly and unequivocally established in the contract, the government, through its Taxation Department, has for seven years, lodged numerous income tax and asset tax assessments against EVGLL, together with claims for penalties and interest.