Bhukia Auction

Gold exploration and development company Panthera Resources Plc (AIM: PAT), with assets in West Africa and India, provides the following update on the dispute with the Republic of India ("India") over the latter's breaches of its obligations under the 1999 Agreement between the Government of Australia and the Government of the Republic of India on the Promotion and Protection of Investments (the "Treaty") in relation to the Bhukia project.

The Company advises that the Government of Rajasthan ("GoR") has announced the preferred bidder with the 'Highest Final Price Offer' of 65.3% for a mining lease for the Bhukiya-Jagpura block. This follows the issuance of a notice by the GoR on 6 March 2024 inviting bids in the auction of a mining lease of the Bhukiya-Jagpura block, substantively covering the Bhukia project.

Commentary

The 'Highest Final Price Offer' of 65.3%, as payable to the GoR, refers to the percentage of value of mineral despatched each month multiplied by the sale price of the mineral on the month of despatch as published by the Indian Bureau of Mines. We note that the Geological Survey of India ("GSI") has reported a mineral resource of 7.15 Moz of gold with a calculated inground value of US$16.7 billion based on the closing gold price of US$2,329/ounce on 24 June 2024.

In addition, in order for the preferred bidder to be considered the successful bidder and qualify for the grant of a mining lease, an upfront payment and a performance security (in the form of a bank guarantee) must be provided by the preferred bidder to the GoR as follows:

Upfront Payment: approximately US$60 million (₹500 crore)

Performance Security: approximately US$60 million (₹500 crore)

From the results of its earlier work at Bhukia, coupled with the evaluation of the subsequent GSI reports, the Company believes that the mineral resource potential of Bhukia significantly exceeds that reported by the GSI.

IGPL's Treaty Claims

The Bhukia Project comprises of legal rights that the Company holds via its Australian subsidiary, Indo Gold Pty Ltd ("IGPL"), in respect of an area that was the subject of a rejected Prospecting Licence Application in Rajasthan by Metal Mining Pvt Ltd ("MMI"). MMI is a wholly owned subsidiary of IGPL.

The Company made its initial investment in Bhukia (through IGPL) in or around 2005. IGPL provided substantial funding and managed the joint venture exploration programmes. The work programmes were carried out in accordance with government rules and regulations and reported on time and in a professional manner.

IGPL's right to be granted a Prospecting Licence over Bhukia, through its joint venture holding, has been consistently frustrated over an extended period by the GoR. The Prospecting Licence Application over Bhukia was rejected by the GoR again in August 2018, despite an agreement and the GoR's promise to grant the Prospecting Licence, on various spurious and legally untenable grounds.

In 2021, India passed a new act ("MMDR2021") to amend the Mines and Minerals (Development and Regulation) Act of 2015 ("MMDR2015"). Under Clause 13 of the MMDR2021, the preferential right to a prospecting licence and subsequently, a mining lease, lapsed and provisions were included in the MMDR2021 to reimburse parties for expenditures incurred. Under the Treaty, IGPL is entitled to fair and equitable compensation, not merely reimbursement of expenditures.

The acts and omissions by the GoR and India, culminating in the enactment of the MMDR2021 and the dismissal in September 2023 of MMI's writ petition, amount to breaches by India of its obligations under the Treaty, including but not limited to, Article 3 (Promotion and Protection of Investments), Article 4 (Treatment of Investments) and Article 7 (Expropriation and Nationalisation). IGPL will be seeking damages from India.

There can be no certainty as to the outcome of IGPL's Treaty claims.

Bhukia Background

The GSI, an agency of the Government of India, published a report in 2014 after the completion of over 150 drill holes (Bulletin Series A (April 2014)), wherein it reported at that point in time indicated and inferred resource estimates of 6.7 Moz gold (excluding additional resources subsequently found through additional drilling by the GSI). The estimate was reportedly prepared according to the UNFC code 333. More recently, the GoR issued a gazette notification containing an updated resource estimate of 113.52 Mt at 1.96 g/t and 0.14% Cu, which amounts to 7.2 Moz of gold plus copper with accessory nickel and cobalt. It is not reported what code was followed in preparing the updated estimate.

LCM Litigation Financing

On 25 August 2023, the Company announced that IGPL had secured up to US$13.6 million in litigation financing ("Facility") with LCM Funding SG Pty Ltd ("LCM Funding" or the "Funder"). LCM Funding is a subsidiary of Litigation Capital Management Limited ("LCM"), a firm quoted on the AIM Market of the London Stock Exchange. LCM is a leading global disputes funder with significant expertise in international arbitration and cross-border disputes, including bilateral investment treaty claims over mineral resource assets.

Glossary