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Sarama Resources Secures Funding for Burkina Faso Arbitration Claim

By Harry Moran |
October 25, 2024

Sarama Resources Secures Funding for Burkina Faso Arbitration Claim

Sarama Resources Ltd. (“Sarama” or the “Company”) (ASX:SRR)(TSXV:SWA) is pleased to advise that it has entered into a Litigation Funding Agreement (“LFA”) with Locke Capital II LLC, an arm’s length party that specializes in providing funding for dispute resolution (the “Funder”) to commence international arbitration proceedings in relation to its investment dispute (the “Dispute”) with the Government of Burkina Faso (the “Government”).

The Dispute pertains to the illegal withdrawal of the Company’s rights to the Tankoro 2 Exploration Permit (the “Permit”) (refer news release 5 September 2023). The Permit covered the Tankoro Deposit which was the focal point of the Company’s Sanutura Project (the “Project”) which featured a multi-million ounce gold resource.

Litigation Funding Agreement

The LFA provides a four-year non-recourse loan facility (“Facility”) of US$4.4 million to the Company to cover all fees and expenses related to its Claim to Arbitration (the “Claim”).

Security of the Facility is limited to the Claim, associated potential proceeds and all benefits arising from the property and assets of the subsidiary companies comprising the ownership chain (the “Chain”) pertaining to the Project (refer Annual Information Form, 2 April 2024). The Facility has been structured to enable the Company to continue to operate and consolidate its business outside the Chain without encumbrance or lien from the LFA.

All monies advanced through the Facility are non-recourse and repayable only in the event of a successful Claim or settlement of the Dispute that results in the receipt of Proceeds (“Proceeds”) by the Company or in the event of a default by Sarama under the LFA. In the event of the occurrence of a material adverse change under the LFA, the Funder shall be entitled to recover only those funds which were advanced but remain unspent. The Funder’s return is directly tied to the successful award and settlement of the Claim, with the total amount payable being a function of time and total Proceeds receipted. The priorities for distribution of receipted Proceeds are set out in the LFA and where commercially and legally sensitive, shall remain confidential.

If there is no settlement or award (or no default by Sarama under the LFA), the Company does not have an obligation to repay the loan. A detailed budget has been approved as part of the LFA, which covers all expected legal and ancillary costs associated with the arbitration process.

Plans for Arbitration

On 29 November 2023, the Company issued a Notice of Intent to Submit Claims to Arbitration under a bilateral investment treaty between Canada and Burkina Faso. The Government of Burkina Faso did not respond substantively to the Company’s efforts to reach an amicable resolution of the dispute. With funding to support legal costs secured, the Company is now preparing to lodge a Request for Arbitration with the World Bank’s International Centre for Settlement of Investment Disputes (“ICSID”). The Company will seek full compensation for the loss suffered which may include, but will not be limited to, the value of the Permit, the value of the Company’s historic investments in the Project, the value of the Project at the time the Permit was withdrawn and damages the Company has suffered as a direct result of the Government’s actions. The Project hosted a multi-million-ounce gold resource which was the subject of a substantially complete Preliminary Economic Assessment and fast-tracked development study at the time of the Government’s illegal actions.

The Company has engaged Boies Schiller Flexner (UK) LLP (“BSF”), a leading international law firm, to assist with legal matters pertaining to the dispute (refer news release 17 October 2023). BSF is an internationally recognised dispute resolution law firm with extensive experience representing investors in international investment arbitrations in the mining and natural resources sectors worldwide.

Background to Claim

On 31 August 2023, the Company received notification from the Minister of Energy, Mines and Quarries of Burkina Faso (the “Minister”) that the Company’s application for the Permit, received in August 2021 and granted to Sarama in November 2021 had been purportedly “rejected”, even though the previous Minister had approved the Permit in accordance with the applicable laws nearly two years prior.

On 6 September 2023, during his public presentation at the Africa Down Under Mining Conference in Perth, the Minister, Simon-Pierre Boussim, stated that the Permit was available for purchase. Based on the notification from the Minister and his subsequent actions, the Company was forced to interpret the Minister’s letter of 25 August 2023 as withdrawing the Company’s rights to the Permit. The Minister did not respond to subsequent correspondence from the Company on the matter.

The unlawful withdrawal of the Permit by the Minister, resulting in the removal of the rights to the land conferred thereunder, has rendered the Project valueless to Sarama, consequently destroying the value of the Company’s investment in the Project.

Sarama’s President, CEO & MD, Andrew Dinning, commented:

“The establishment of a non-recourse funding facility to cover all expenses related to the Company’s arbitration case represents a major step forward in its pursuit of redress for the substantial damages suffered as a result of the Government of Burkina Faso’s illegal actions.

Sarama’s legal representatives, Boies Schiller Flexner, are highly experienced and have a very successful track record in international investment disputes, including an arbitration claim brought by Indiana Resources (ASX:IDA) against Tanzania which saw the company recently receive the first tranche of a US$90M settlement.

The Company will now proceed with filing a Request for Arbitration and intends to prosecute its case to the fullest extent possible.”

CAUTION REGARDING FORWARD LOOKING INFORMATION

Information in this news release that is not a statement of historical fact constitutes forward-looking information. Such forward looking information includes, but is not limited to: the sufficiency and continued availability of funding for arbitration; statements regarding the possibility of initiating international arbitration proceedings in accordance with the bilateral investment treaty between Canada and Burkina Faso; the impact, if any, of the actions of the Government on the Company’s investments in mineral projects in Burkina Faso; the ability for the Company to successfully recover proceeds of an award or settlement from Burkina Faso; the filing of the material change report; the occurrence of an event of default or material adverse change under the LFA; and providing further information in due course. Actual results may vary from the forward-looking information due to known and unknown risks, uncertainties and other factors. Such factors include, among others, risks related to the uncertainty as to the outcome of arbitration; the success of the Claim; foreign country and political risks, including risks relating to foreign operations and expropriation or nationalization of mining operations; delays in obtaining or failure to obtain governmental permits, or non-compliance with permits; as well as those factors disclosed in the Company’s publicly filed documents. Readers should not place undue reliance on forward-looking information.

Sarama does not undertake to update any forward-looking information, except as required by applicable laws.

About the author

Harry Moran

Harry Moran

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Announcements Consumer

Legal-Bay Expands Pre-Settlement Funding Services

By John Freund |

Legal-Bay announced an expansion of its legal funding services, aiming to offer clients more flexible options for pre-settlement funding. The move reflects rising demand from plaintiffs who need interim cash while cases progress and highlights the competitive dynamics in consumer legal funding.

According to the company, the initiative is intended to broaden availability of non-recourse advances and to streamline decisioning so applicants can access funds more predictably during litigation. Although the funder did not disclose detailed terms, the emphasis on flexibility suggests adjustments to how advances are sized and timed relative to case milestones, as well as potential enhancements to intake and support. For claimants, the changes could translate into more tailored funding paths during a period of financial strain.

A press release in PR Newswire states that Legal-Bay is expanding its legal funding services to provide clients with more flexible options for pre-settlement funding, signaling a renewed focus on access and responsiveness. The release characterizes the update as a client-centric step and reiterates the company’s commitment to supporting plaintiffs seeking bridge financing while their matters are pending. It does not enumerate product features, timelines or pricing, but it frames the initiative as an effort to meet a wider range of circumstances and case timelines.

For the litigation finance industry, expansions like this reinforce steady demand among cash-constrained plaintiffs and continued product iteration by consumer funders. If flexibility becomes a wider theme, expect tighter competition on approval speed, disclosures and service quality, alongside ongoing attention to compliance in states evaluating consumer legal funding rules.

Announcements Commercial People Moves

Pogust Goodhead Appoints Gemma Anderson as Partner, Strengthening Mariana Leadership Team 

By John Freund |

Pogust Goodhead today announces the appointment of Gemma Anderson as partner, a standout addition that reflects the firm’s continued growth and investment in senior talent as the Mariana case advances through the High Court in London. 

Gemma will work on the Mariana litigation alongside Jonathan Wheeler, who leads the case for the firm. Her appointment reunites the pair after fourteen years working together at Morrison & Foerster, where they collaborated on numerous high-stakes disputes. 

Gemma is a highly experienced commercial litigator specialising in complex cross-border disputes. She joins PG from Quinn Emanuel’s London office, where she has spent the last two years as a partner focused on significant, high value commercial cases.  

Alicia Alinia, CEO at Pogust Goodhead, said: “Gemma’s appointment is a fantastic moment for Pogust Goodhead. Her arrival is a clear signal of the team and platform we are building for the future - deep expertise, strong leadership, and the capacity to run major international cases at scale. We’re delighted to welcome her as a partner”. 

Jonathan Wheeler, partner and lead for the Mariana litigation, said: “Gemma is an exceptional disputes lawyer and a natural fit for the Mariana team. We worked closely for fourteen years at Morrison & Foerster, and I’ve seen first-hand the rigour and relentless drive she brings to complex cross-border matters. Her appointment strengthens our ability to deliver for clients as we build on the milestone liability decision and move into the next phase of the case.” 

Gemma Anderson said:  “I’m thrilled to be joining Pogust Goodhead at such a pivotal moment for the Mariana litigation. This is a truly landmark case - not only for the communities affected, but for what it represents globally on access to justice and corporate accountability. I’m looking forward to working with Jonathan and the wider team to help secure a fair outcome for hundreds of thousands of victims.” 

The Mariana proceedings in England involve over 600,000 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 14 November 2025, the case is now in its second stage, focused on damages and the quantification of losses. 

Announcements Case Developments Commercial

High Court Refuses BHP Permission to Appeal Landmark Mariana Liability Judgment 

By John Freund |

Pogust Goodhead welcomes the decision of Mrs Justice O’Farrell DBE refusing BHP’s application for permission to appeal the High Court’s judgment on liability in the Mariana disaster litigation. The ruling marks a major step forward in the pursuit of justice for over 620,000 Brazilian claimants affected by the worst environmental disaster in the country’s history. 

The refusal leaves the High Court’s findings undisturbed at first instance: that BHP is liable under Brazilian law for its role in the catastrophic collapse of the Fundão dam in 2015. In a landmark ruling handed down last November, the Court found the collapse was caused by BHP’s negligence, imprudence and/or lack of skill, confirmed that all claimants are in time and stated that municipalities can pursue their claims in England. 

In today’s ruling, following the consequentials hearing held last December, the court concluded that BHP’s proposed grounds of appeal have “no real prospect of success”. 

In her judgment, Mrs Justice O’Farrell stated:  “In summary, despite the clear and careful submissions of Ms Fatima KC, leading counsel for the defendants, the appeal has no real prospect of success. There is no other compelling reason for the appeal to be heard. Although the Judgment may be of interest to other parties in other jurisdictions, it is a decision on issues of Brazilian law established as fact in this jurisdiction, together with factual and expert evidence. For the above reasons, permission to appeal is refused”. 

At the December hearing, the claimants - represented by Pogust Goodhead - argued that BHP’s application was an attempt to overturn detailed findings of fact reached after an extensive five-month trial, by recasting its disagreement with the outcome as alleged procedural flaws. The claimants submitted that appellate courts do not re-try factual findings and that BHP’s approach was, in substance, an attempt to secure a retrial. 

Today’s judgment confirmed that the liability judgment involved findings of Brazilian law as fact, based on extensive expert and factual evidence, and rejected the defendants’ arguments, who now have 28 days to apply to the Court of Appeal.  

Jonathan Wheeler, Partner at Pogust Goodhead and lead of the Mariana litigation, said:  “This is a major step forward. Today’s decision reinforces the strength and robustness of the High Court’s findings and brings hundreds of thousands of claimants a step closer to redress for the immense harm they have suffered.” 

“BHP’s application for permission to appeal shows it continues to treat this as a case to be managed, not a humanitarian and environmental disaster that demands a just outcome. Every further procedural manoeuvre brings more delay, more cost and more harm for people who have already waited more than a decade for proper compensation.” 

Mônica dos Santos, a resident of Bento Rodrigues (a district in Mariana) whose house was buried by the avalanche of tailings, commented:  "This is an important victory. Ten years have passed since the crime, and more than 80 residents of Bento Rodrigues have died without receiving their new homes. Hundreds of us have not received fair compensation for what we have been through. It is unacceptable that, after so much suffering and so many lives interrupted, the company is still trying to delay the process to escape its responsibility." 

Legal costs 

The Court confirmed that the claimants were the successful party and ordered the defendants to pay 90% of the claimants’ Stage 1 Trial costs, subject to detailed assessment, and to make a £43 million payment on account. The Court also made clear that the order relates to Stage 1 Trial costs only; broader case costs will depend on the ultimate outcome of the proceedings. 

The costs award reflects the scale and complexity of the Mariana case and the way PG has conducted this litigation for more than seven years on a no-win, no-fee basis - funding an unprecedented claimant cohort and extensive client-facing infrastructure in Brazil without charging clients. This recovery is separate from any damages award and does not reduce, replace or affect the compensation clients may ultimately receive.