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Montauk Metals Secures Litigation Funding Against the Republic of Colombia

November 10, 2023

Montauk Metals Secures Litigation Funding Against the Republic of Colombia

Montauk Metals Inc. (TSX-V: MTK) (the “Company” or “Montauk”) is pleased to announce that it has secured litigation funding for its arbitration proceedings (the “Arbitration”) brought by the Company against the Republic of Colombia (“Colombia”) to enforce the Company’s rights to compensation under the Canada-Colombia Free Trade Agreement (the “FTA”), as previously described in its news releases of March 27, 2018, February 25, 2019, February 10, 2020, November 23, 2021, September 1, 2023 and October 5, 2023, and subject to certain conditions and approvals as noted below. Background of the Claim Montauk contends that Colombia breached its obligations owed to the Company, including specific obligations under the FTA. The claims include Colombia’s refusal or failure to compensate the Company for the losses incurred as a consequence of Colombia’s prohibition of mining in the páramos (high altitude eco-systems). On March 21, 2018, Montauk filed a Request for Arbitration against the Republic of Colombia before the International Centre for Settlement of Investment Disputes (“ICSID”). The Arbitration is being conducted in two phases. Phase One will determine whether the ICSID Tribunal adjudicating Montauk’s claims (the “Tribunal”) under the FTA has jurisdiction over this case and whether Colombia has breached its obligations under the FTA and is liable for compensation to the Company. Assuming that ICSID decides in favour of Montauk in Phase 1 (the “Phase 1 Decision”), Phase 2 will involve determining the quantum of damages awarded to Montauk to compensate it for losses incurred. The Company estimates it has suffered more than USD $16 million in sunk costs and total loss of the value of up to USD $180 million in the Reina de Oro project, as well as legal and arbitration fees. Typically, an arbitral award will include an award of costs payable by the unsuccessful party to the successful party to reimburse it for its legal and arbitration fees. Certain costs of the proceedings, including arbitration fees and disbursements, have exceeded the Company’s original estimates as the Company was also required to pay Colombia’s 50% share of the arbitration fees. The Company must make an additional payment of US$200,000 to ICSID (the “ICSID Payment”) before a ruling on Phase 1 is rendered. If the Company fails to pay the required amount of US$ 200,000 to obtain a ruling on or before November 9, 2023 (the “Payment Deadline”), the ICSID Acting Secretary-General may exercise its discretion to discontinue the Arbitration. The ICSID Payment is expected to result in the issuance of a decision on jurisdiction and liability. Extension of the Payment Deadline The Company expects to apply today to ICSID to request an extension to the Payment Deadline (the “Extension”). The Company refrained from submitting an Extension application until it had received a litigation funding commitment, with such commitment being received today following the approval of the Omni’s (as defined below) investment committee. The Company strongly believes in the merits of its case and has obtained litigation funding to fund the ICSID Payment, subject to certain conditions as noted below. The Company is optimistic that ICSID will consider the Extension request. Litigation Funding Montauk has entered into a loan and option agreement (the “Loan Agreement”) with Omni Bridgeway (Fund 5) Canada Investments Ltd. (“Omni”), pursuant to which Omni has agreed to lend the Company US$200,000 (the “Loan Amount”) to fund the ICSID Payment in order for the Tribunal to render a ruling on Phase One. The Loan Amount will accrue interest at a rate of twenty percent (20%), compounded annually. In the event the Tribunal in the Arbitration finds that it does not have jurisdiction over the dispute and/or that Colombia did not breach its duties to the Company and/or any outcome which otherwise renders a Phase 2 Election (as defined below) non-viable in the sole view of Omni, the Loan Amount and any and all accrued interest must be repaid by the Company within sixty (60) days after Omni notifies the Company that Omni will not make the Phase 2 Election. The repayment of the Loan Amount and any such accrued interest shall be payable regardless of whether the Arbitration is successful and is a recourse obligation of the Company, payable from any and all assets of the Company. In connection with the Loan Agreement, the Company will deliver a promissory note (the “Note”) to Omni evidencing its obligation to repay Omni the Loan Amount and any accrued interest. In addition, the Company has granted Omni an option, exercisable in the sole discretion of Omni (the “Phase 2 Election”) to provide litigation funding to the Company pursuant to a litigation funding agreement (the “LFA”). The LFA is expected to provide an initial amount of up to US$2,325,000 (the “Non-Recourse Funding Amount”) subject to certain conditions. The Non-Recourse Funding Amount may be increased in certain circumstances as may be agreed upon between the Corporation and Omni. If Omni elects to provide the Non-Recourse Funding Amount for Phase 2 and the enforcement of any award obtained by the Company in the Arbitration, the Loan Amount and interest shall be repaid through proceeds recovered in the litigation (and in the event there are no proceeds recovered in the litigation, such amount inclusive of such interest shall be payable by the Company at the conclusion of the litigation). Omni’s return on the Non-Recourse Funding Amount (the “Omni Return”) will be limited solely to recovery from the amount of money for which the Arbitration is settled, or for which a final, non- appealable award is given in favour of the Corporation (the “Litigation Proceeds”). The Omni Return shall be an amount calculated as the sum of (i) a multiple of the amounts actually incurred of the Non-Recourse Litigation Funding Amount and (ii) a percentage of the gross recovery proceeds, both calculated when the recovery proceeds are received, as set out in the table below:
MonthsMultiplePercentage
0-122.0x12% 
12-243.0x14% 
24+3.5x16% 
The Litigation Proceeds, if received, will be disbursed in the following order of priority: (a) Omni shall be reimbursed the Recourse Loan and the amounts actually incurred of the Non-Recourse Funding Amount; (b) Omni shall be paid the Omni Return and legal counsel shall be paid their legal fees; and (c) the balance shall be paid to the Corporation. In connection with the Loan Agreement, Note and LFA, the Company has agreed to grant Omni a continuing first priority security interest over any and all assets of the Company (whether presently held or acquired after the date hereof), including the Company’s interest in any Litigation Proceeds. The Loan Agreement is subject to certain conditions and the receipt of all necessary approvals and regulatory approvals, including the approval of the TSX Venture Exchange and the approval of the shareholders of the Company. The LFA is subject to the foregoing conditions and approvals and is subject to the settlement of the definitive LFA. The principal terms and conditions and the LFA have been agreed upon in the Loan Agreement. The Company has scheduled a special meeting of shareholders to be held on December 14, 2023 (the “Meeting”) at which shareholders of the Company will vote to ratify the Loan Agreement and approve the LFA. Additional information pertaining to the Loan Agreement and LFA may be found in the management information circular pertaining to the Meeting that is expected to be available on the Company’s profile on SEDAR+ on or around November 22, 2023. The Company cannot guarantee that it will be successful at the Arbitration, or that the estimated amounts disclosed herein will not be revised as the Arbitration proceeds. The Company also cannot guarantee that it will be able to recover all or part of its legal and arbitration costs from Colombia even if it is successful at the Arbitration. Assuming the Extension is granted and the Arbitration proceeds, the ruling from the Tribunal would be expected to be on or about the first quarter of 2024. Management of the Company will continue to provide updates on material developments of the status of the Arbitration. RISK DISCLOSURE STATEMENT: At the present time, the Company’s payment obligations are substantially in excess of its cash balances and it has no other assets. The Company is not solvent and cannot continue as a going concern.   Trading in shares of the Company and any investment in the Company is highly speculative. No trading in securities of the Company or investment should be made without being able to lose the entire amount of such funds. See below, “Cautionary Note Regarding Forward-Looking Statements”. Investors are advised to seek professional advice before making any decision to trade in or invest in the securities of the Company.
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Announcements Commercial

ILFA Welcomes Commissioner McGrath’s Rejection of EU Regulation for Third-Party Litigation Funding

By John Freund |

On 18 November 2025, European Commissioner for Justice Michael McGrath closed the final meeting of the EU’s High-Level Forum on Justice for Growth with a clear statement that the Commission does not plan new legislation on Third Party Litigation Funding (TPLF). 

He added that Forum participants also indicated that there is no need to further regulate third-party litigation funding.

Instead, Commissioner McGrath said the Commission will prioritise monitoring the implementation of the Representative Actions Directive (RAD) over any new legislative proposals. 

(video from 2.32 here). 

Paul Kong, Executive Director of the International Legal Finance Association (ILFA), said:  “We’re delighted to see Commissioner McGrath’s clear statement that EU regulation for third-party litigation funding is not planned. This appears to close any talk of the need for new regulation, which was completely without evidence and created considerable uncertainty for the sector.

Over several years, ILFA has consistently made the case that litigation funding plays a critical role in ensuring European businesses and consumers can access justice without financial limitations and are not disadvantaged against larger and financially stronger defendants. New legislation would have choked off the availability of financial support to level the playing field for claimants. 

We will continue to work closely with the Commission to share the experiences of our members on the implementation of the RAD across the EU, ensuring it also works for claimants in consumer group actions facing defendants with deep pockets.”

About ILFA

The International Legal Finance Association (ILFA) represents the global commercial legal finance community, and its mission is to engage, educate and influence legislative, regulatory and judicial landscapes as the global voice of the commercial legal finance industry. It is the only global association of commercial legal finance companies and is an independent, non-profit trade association promoting the highest standards of operation and service for the commercial legal finance sector. ILFA has local chapter representation around the world. For more information, visit www.ilfa.com or @ILFA_Official. 

About the High-Level Forum on Justice for Growth

European Commissioner for Justice Michael McGrath launched the High-Level Forum on Justice for Growth in March 2025 to bring together legal industry experts to “focus on and discuss together how justice policies can contribute to – and further support – European competitiveness and growth”. The final meeting of the Forum took place on 18 November 2025, in Brussels. 

Announcements Commercial

Pogust Goodhead Appoints Jonathan Edward Wheeler as Partner and Head of Mariana Litigation

By John Freund |

Pogust Goodhead law firm has appointed Jonathan Edward Wheeler as a partner and Head of Mariana Litigation, adding heavyweight firepower to the team driving one of the largest group claims in English legal history following the firm’s landmark liability win against BHP in the English courts.

Jonathan joins Pogust Goodhead from Morrison Foerster in London, where he was a leading commercial litigation partner, having served for seven years as office co-managing partner and for 15 years as Head of Litigation. A specialist in complex, cross-border disputes, Jonathan has extensive experience acting in high-value commercial litigation, civil fraud and asset tracing, international trust disputes, contentious insolvency and investigations across multiple jurisdictions.

In his new role, Jonathan will assume strategic leadership of the proceedings arising from the Mariana dam disaster against mining giant BHP, overseeing the continued development of the case into the damages phase and working closely with colleagues in Brazil, the UK, the Netherlands and beyond.

Howard Morris, Chairman at Pogust Goodhead said: “Jonathan is a heavyweight addition to Pogust Goodhead and to our Mariana team. His track record in running some of the most complex cross-border disputes in the English courts, together with his leadership experience, make him exactly the kind of senior figure we need after our historic liability victory. Our clients will benefit enormously from his expertise and judgment.”

Jonathan Wheeler said: “It is a privilege to join Pogust Goodhead at such a pivotal moment in the Mariana case. The recent liability judgment is a watershed for access to justice and corporate accountability. I am honoured to help lead the next phase of this extraordinary litigation and to work alongside a team that has shown such determination in seeking justice for hundreds of thousands of victims.”

Alicia Alinia, CEO at Pogust Goodhead said: “Bringing in lawyers of Jonathan’s calibre is a strategic choice. As we expand the depth and breadth of our disputes practice globally, we are investing in senior talent who can help us deliver justice at scale for our clients and build an even more resilient firm.”

The Mariana proceedings in England involve over 600,000 of Brazilian individuals, businesses, municipalities, religious institutions and Indigenous communities affected by the 2015 Fundão dam collapse in Minas Gerais, Brazil. Following the English court’s decision on liability on the 14th of November 2025, the case will now move into the next stage focused on damages and the quantification of losses on an unprecedented scale.

Announcements Regulatory Issues

Pravati Capital Establishes Coalition to Advance Responsible Litigation Funding Regulation Across U.S. Following Arizona Law’s Passage

By John Freund |

Arizona’s Senate Bill 1215 (SB1215) will become law on Jan. 1, 2026, marking a significant milestone in the state’s role as a national leader in advancing access to justice through litigation funding, positioning Arizona as a model for other states considering similar measures. Arizona’s legislation reflects a broader movement in states such as California and Georgia, where lawmakers are weighing the benefits of litigation finance as a way to level the playing field for plaintiffs facing deep-pocketed adversaries.

To help advance these efforts, Scottsdale, Ariz.-based Pravati Capital, one of the oldest litigation finance firms in the U.S. and supporter of the bill alongside the Arizona Chamber of Commerce and Industry and the broader legal community, has formed a coalition of litigation funders, attorneys and policy advocates committed to ensuring that states pass responsible regulation that protects plaintiffs. 

The bill’s final passage underscores a consensus reached after months of negotiations and reflects bipartisan compromise, according to Alexander Chucri, founder and CEO of Pravati Capital. SB1215 ensures funding remains a viable option for plaintiffs seeking to stand on equal footing with well-capitalized corporate opponents; it requires greater transparency of legal proceedings and prohibits funding and influence by foreign countries or entities of concern as defined in the legislation. 

“Arizona’s leadership in the area of litigation funding sends a powerful signal nationally,” said Senate Majority Whip Frank Carroll, a key supporter of the legislation. “This legislation is the product of constructive negotiation that demonstrates what’s possible when all sides work toward the shared goal of preserving access to justice.”

“It closes the door on bad actors while ensuring responsible litigation finance firms can continue to help plaintiffs pursue meritorious claims,” said Chucri. “At Pravati, we welcome this as part of an ongoing dialogue.”

SB1215 took effect on September 26, 90 days after the close of the legislative session, and, with a delayed effective date, will become law on January 1. Among key provisions, SB1215:

·       Protects the integrity of cases by restricting involvement by foreign countries or entities of concern as defined in the legislation, ensuring litigation funding remains aligned with U.S. legal and ethical standards.

·       Preserves innovation in legal services, reaffirming Arizona’s pioneering role in allowing alternative business structures (ABS), law firms that permit non-lawyers decision-making authority, to expand access to legal services by partnering with litigation funding firms.   

·       Balances regulation, affirming safeguards such as prohibitions on funders controlling litigation, while maintaining transparency. 

Chucri added, “Pravati has always believed our mission — ‘to befriend, help and protect’ — is best achieved through cooperation and a willingness to educate stakeholders. We will continue to engage constructively in conversations to advance fair, responsible access to justice.” 

About Pravati Capital

Established in 2013, Pravati Capital, LLC is among the oldest litigation finance firms in the U.S., delivering a proven track record as an equalizing force in court and a unique and uncorrelated asset class to investors. Founded by Alexander Chucri, a visionary in developing the industry's first pioneering model of litigation finance in 2003, Pravati Capital brings together a seasoned team with deep experience across law, finance and successful entrepreneurial ventures. The Scottsdale, Ariz.-based firm delivers strategic capital solutions for attorneys and law firms, helps plaintiffs gain access to justice through financial support, and offers accredited investors an attractive asset class designed to perform independently of traditional markets. Pravati’s mission is its namesake: to befriend, help and protect. For more information, visit PravatiCapital.com.