Canadian Lupaka Gold (TSXV LPK / Frankfurt LQP) soared to a three-year high yesterday after winning an international arbitration against Peru. Five years after these proceedings were initiated, the company was awarded $65 million in compensation. Lupaka announced this via press release.
The stock briefly surged to CAD 0.24, representing a threefold increase from its initial value and the highest price since June 2022. By the end of trading, the stock was still at CAD 0.185, which represents a daily gain of around 147%.
Lupaka Gold’s Gold Project in Peru Was Illegally Blocked
The dispute, which ended before an international arbitration court, had ignited in October 2018 due to a protest by the community of Pará. Access to Lupaka’s Invicta gold project, located approximately 120 kilometers north of the Peruvian capital Lima, was blocked.
The company considered this blockade illegal. It had significant negative impacts on ore processing at Invicta and restricted Lupaka’s ability to generate cash flow. Ultimately, this led to the company losing its project a year later, as it could no longer service its loans.
Lupaka had expected to produce 185,000 ounces of gold equivalent over a six-year mine life at the project. Before the blockade, 3,000 meters of underground development had already been completed, agreements with the Lacsanga community had been finalized, and a 29-kilometer access road capable of supporting ore haulers weighing up to 40 tons had been built.
Free Trade Agreement with Canada Violated
In the arbitration proceedings, Lupaka had accused the Peruvian government of supporting the protests and thereby breaching the Free Trade Agreement with Canada. The company had demanded $100 million in compensation.
The fact that a final decision has now been made in favor of Lupaka is described by CEO Gordon Ellis as “exceptionally good news”. However, he points out that while this was a crucial step in the arbitration process, the company should not expect the compensation to be paid out in the immediate future. According to Ellis, several hurdles still need to be overcome.
