Galway Gold Awarded $490,000 in Arbitration against Reina de Oro
Galway Gold has been awarded a sizeable arbitration settlement over the Reina de Oro in the Vetas Gold-Silver mine in Colombia. The award totals COP$79,341,923 per month for the period from December 2013 to February 2015, totaling about $490,000 depending on the exchange rates.
However, the owners of the Reina de Oro concession were supposed to make the payment by February 20th, and failed to do so. As a result, Galway has initiated with litigation to collect the awarded damages.
Galway holds an option to take over ownership of the Vetas gold mine in Colombia, which it attempted to exercise in January 2014 for an option price of $4.3 million. The Reina de Oro owners rejected their option claim, and Galway initiated an arbitration. At issue is the interpretation of the value of the mine, which fluctuates depending on the worldwide value of gold and silver. The current owners of the option dispute the price calculation.
However, the arbitration panel has found that the current owners’ rejection of the option was improper and has cost Galway significant profits from the gold and silver extracted from the mine since the option was first officially executed. It also ruled that Galway does in fact own 100% of the mine as a result of its exercising of the option. There has been no official response from the current owners of the option, although the assumption is that they will attempt to defend their refusal to pay the settlement award.