• Costa Rica Real Estate

Costa Rica to spend $2 million annually in fight against cancelled gold mine project

January 20, 2016

The government of Costa Rica announced Tuesday morning that it was ready to suit up and meet Infinto Gold, Ltd. at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).

The move comes after the Canadian mining company filed a Request for Arbitration in the latest phase of a three-year legal battle over the annulled Las Crucitas gold mining concession in northern Costa Rica.

Infinito Gold announced that it had filed an arbitration request with ICSID Monday, asking for $94 million in damages from lost investments in the gold mining project between 1993 and 2010, plus legal fees and interest.

“We hope to prove that (the government of Costa Rica) does not have to make any payment, or should minimize the payment, by presenting all evidence from courts that annulled the concession. This is because (the company) never complied with legal requirements, and therefore, there never was a concession,” Environment Minister René Castro said Tuesday morning.

Castro did not mention specific evidence the government planned to present in its defense, citing the pending arbitration.

He said Costa Rica would seek between $3.5 million and $5 million in damages from the British Columbia-based company.

The minister said that the government had allocated $2 million annually in legal fees to meet Infinito Gold at the Washington, D.C.-based ICSID.

Castro said the arbitration was a sign of respect between “serious” parties in lieu of an international trial.

“This is the only avenue I see today. The possibility they mentioned of returning to the project is not legally viable,” he said, citing a November 2011 law banning open-pit mining in Costa Rica.

Castro, who will leave his post as environment minister on May 8 when a new administration takes office, said the arbitration would continue without interruption through the transfer of power.

The ICSID arbitration could take three years to resolve, according to Castro and previous statements from Yokebec Soto, a spokeswoman for Industrias Infintio, S.A., the wholly owned subsidiary of Infinito Gold, Ltd. that managed the Crucitas concession.

Costa Rica and Infinito Gold have been locked in a marathon legal dispute over the annulled gold mining concession near the Nicaraguan border after an appeals court revoked Industrias Infinito’s gold-mining concession in November 2010.

The company exhausted its legal recourse in Costa Rica after it lost an appeal in November 2011 with the Supreme Court’s Civil and Administrative Law Branch.

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