Stans Energy kicks off fresh legal actions over Kyrgyzstan's $118 million pending payment
Canadian-based rare earths junior Stans Energy (TSX-V: HRE), (OTCQX: HREEF) said Tuesday it has appealed the Moscow City Arbitrazh Court decision of not allowing the company to get a hold of $118 million that were granted by the Kyrgyz Republic for seizing Stans’ Kutessay II rare earth mine in 2012.
The Toronto-based company acquired a 20-year mining license for the past-producing Kutessay II open pit rare earth mine in Kyrgyzstan in 2009, right before prices for the coveted elements began soaring. Soon enough, Stans Energy and its project drew interest form outsiders and, in May 2011, the firm completed the purchase of the Kashka Rare Earth Processing Plant (KRP), the same plant that previously refined REEs from Kutessay II ores.
But it call came crumbling down three years ago, when a Kyrgyz parliamentary committee decided the company’s licence for Kutessay should be revoked, claiming the acquisition process was tainted.
What does Centerra Gold has to do with all this?
Stans was able to prove its innocence and, in June last year, was awarded $118 million in an arbitration case against Kyrgyzstan. The victory, however, was short-lived as the legal battle took a negative turn last April. A Moscow court ruled against the company, deciding to hold off the millions Stans Energy was expecting.
The battle then moved to Canada, as the Kyrgyz Republic owns a stake in fellow miner Centerra Gold (TSX: CG) and those shares can easily be seized if the country refuses to pay Stans Energy. So far, the junior miner is winning: in October last year a court ordered the freeze of 47 million Centerra shares.