An international tribunal has unanimously rejected the Government of El Salvador’s preliminary objections in the latest chapter to a long-standing dispute between the Central American country and Pacific Rim Mining Corp.’s (TSX:PMU) El Dorado gold project.
Pacific Rim had filed for arbitration in the International Centre for Settlement of Investment Disputes in 2009 to recoup at least $77 million from the El Salvadoran government, the amount it claims it invested before the government halted the project in 2008 due to environmental concerns and amid popular protests.
The previous El Salvadoran administration had given the project the go-ahead.
With the government’s preliminary rejections rejected, the case can proceed.
Pacific Rim maintains its project is environmentally sound and alleges that El Salvador violated the U.S.-Central American Free Trade Agreement (CAFTA) and the Investment Law of El Salvador by blocking the project.
“This is a positive and crucial step in the CAFTA process for PacRim,” said Tom Shrake, Pacific Rim’s president and CEO. “We are, however, reticent to celebrate as we believe a more productive outcome is possible for both the Salvadoran people and foreign investors. With this phase of the arbitration now completed, we hope to resume a mutually beneficial dialogue with the [Government of El Salvador] to resolve the impasse on the El Dorado project.”
El Dorado is Pacific Rim’s flagship project. The company, which is not producing revenue, said in July that its ability to continue as a “going concern” is dependent on its ability to raise new capital.
Its El Dorado project has polarized citizens in the region. Pacific Rim has denied allegations it had any role in the deaths of numerous activists who opposed the project.
The company’s shares were up $0.01 to $0.17 during mid-day trading Tuesday.
Pacific Rim’s share price range during the past week: between $0.16 and $0.18; 52-week high: $0.40; 52-week low: $0.16.