Another Canadian miner fights over rights in Kyrgyzstan

Another Canadian miner fights over rights in Kyrgyzstan

Locations of Stans Energy’s Kyrgyzstan projects.

Rare earth Canadian junior Stans Energy Corp. (TSX-V: HRE, OTCQX: HREEF) is seeking close to US$118 million in compensation for losses and damage from the Government of Kyrgyzstan, for what it qualifies as an “expropriatory and unlawful treatment of the company” over its Kutessay II project.

While less commented that the ongoing battle between Centerra Gold (TSX:CG) and Kyrgyz officials, Stans Energy’s claims are not minor. The company announced Thursday it has formally launched an international arbitration action against the Government of Kyrgyzstan.

The arbitration team, led by Professor Igor Zenkin, one of the leading experts on International Trade Disputes within Russia and the former Soviet Republics, will seek compensation for the effects a series of measures taken by the Central Asian country that has made “impossible” to carry out activities at Kutessay II, the firm said.

Stans acquired a 20-year mining license for the past-producing Kutessay II rare earth mine in December 2009. Two years later it bought the same processing plant that previously refined rare earth from the acquired mine.

But in March this year, the country’s General Prosecutor’s Office (SPO) filed a statement of claim against the State Agency for Geology and Mineral Resources (SGA) seeking to invalidate the process by which Stans acquired its mining licence.

“We are disappointed in the Kyrgyz government’s lack of action in quickly resolving the outstanding claims. The impact of the recent court action has frozen all development at the project site,” the firm’s Chairman of the Board and Interim President, Rodney Irwin said in a statement.

He noted that, under international law, these sorts of actions constitute compelling grounds for a company to seek damages in order to protect the interests of its shareholders.

Image courtesy of Stans Energy

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