Legal Update: Favourable Constitutional RulingSource: RNS
16 January 2023
("Centamin" or "the Company")
LSE: CEY / TSX: CEE
legal update: Favorable Constitutional Court Ruling
Martin Horgan, CEO, commented: "Today's judgment on the constitutionality of Egyptian Law No. 32 is most welcomed. We are delighted to now be in a position to apply to set aside the 2011 third party challenge to the validity of the Exploitation Licence issued under the Sukari Concession Agreement."
· Egyptian Law No. 32 of 2014 ("Law 32") was upheld as constitutional by the Egyptian Supreme Constitutional Court ("SCC") on 14 January 2023, having been under challenge since 2014
· Law 32 provides that third parties are prevented from lawfully challenging contractual agreements between the Egyptian government and an investor(s), such as the Sukari Gold Mine Concession Agreement ("Concession Agreement")
· The SCC judgment gives Centamin the right to request the Supreme Administrative Court ("SAC") to rule that the 2011 challenge to the Concession Agreement is now legally inadmissible on the basis that the original complainant had no capacity to bring the claim as he was not a party to the Concession Agreement
· As per the provisions of Egyptian Civil Procedures Law, Centamin's subsidiary, PGM, will imminently submit an application to the SAC to resume the Appeal proceedings and request the SAC to reject the original case in its entirety in accordance with the provisions of Law 32
· Operations at Sukari Gold Mine remain unaffected and continue as normal.
Sukari Gold Mine Concession Agreement Case
· The Concession Agreement between the Egyptian government, Egyptian Mineral Resource Authority ("EMRA") and Centamin's Egyptian subsidiary Pharaoh Gold Mines ("PGM"), was enacted by the Egyptian Parliament under special law No. 222 of 1994.
· On 29 September 2011, a private Egyptian individual issued proceedings in the Administrative Court against the Ministry of Petroleum and Mineral Resources ("MoP") and EMRA, in which the individual sought nullification of the Concession Agreement. The same individual also instigated similar claims against several other international companies in Egypt around the same time, most notably in relation to privatisations which took place during President Hosni Mubarak's administration (1981 to 2011).
· On 30 October 2012, the Administrative Court, as court of first instance, held that, although the Concession Agreement was valid, insufficient evidence had been presented by the MoP and EMRA to demonstrate that the 160km2 exploitation lease between PGM and EMRA had received approval from the relevant Minister as required by the Concession Agreement.
· In November 2012, Centamin's subsidiary, PGM immediately joined proceedings and filed, with EMRA and the MoP, an additional appeal against the judgment (the "Appeal") and submitted a copy of the Sukari exploitation lease which clearly shows that the 160km² exploitation lease was approved by the MoP.
· On 20 March 2013, the SAC unanimously decided to suspend the lower court's decision until a ruling was made by the SAC on the Appeal. Operations at Sukari Gold Mine have continued uninterrupted.
· On 28 June 2016, the Appeal was stayed indefinitely pending the outcome of the SCC's ruling on the constitutionality of Law 32. On the basis that the constitutionality is upheld, an application would be made to dismiss the proceedings.
Egyptian Law No. 32 of 2014
In April 2014, Law 32 was enacted by the former interim president, Adly Mansour, which prevents third parties from challenging contractual agreements between the Egyptian government and investor(s). The law applied to all prospective cases and any active cases in front of the courts where no final judgment had been given.
In July 2014 the Egyptian Center for Economic and Social Rights ("ECESR") (a non-governmental body whose aim is to protect the economic and social rights of workers) challenged the constitutionality of Law 32 before the Egyptian SCC.
Delays ensued as the SCC was overwhelmed with cases following a period of political disruption between 2011-2014 following the Hosni Mubarak government and before the current stability under the Abdel Fattah el-Sisi government.
On 14 January 2023, the SCC rendered its judgment considering that Law 32 is constitutional, meaning third parties have no legal standing to challenge contracts between the Egyptian government and investor(s). A copy of the judgement will be available in due course.
Centamin is an established gold producer, with premium listings on the London Stock Exchange and Toronto Stock Exchange. The Company's flagship asset is the Sukari Gold Mine ("Sukari"), Egypt's largest and first modern gold mine, as well as one of the world's largest producing mines. Since production began in 2009 Sukari has produced over 5 million ounces of gold, and today has a projected mine life of 14 years.
Through its large portfolio of exploration assets in Egypt and West Africa, Centamin is advancing an active pipeline of future growth prospects, including the Doropo project in Côte d'Ivoire, and over 3,000km2 of highly prospective exploration ground in Egypt's Arabian Nubian Shield.
Centamin practices responsible mining activities, recognising its responsibility to deliver operational and financial performance and create lasting mutual benefit for all stakeholders through good corporate citizenship.
FOR MORE INFORMATION please visit the website www.centamin.com or contact:
Alexandra Barter-Carse, Corporate Communications
+44 (0) 7700 713 738
Bobby Morse/ Oonagh Reidy/ George Cleary
+ 44 (0) 20 7466 5000
This announcement (including information incorporated by reference) contains "forward-looking statements" and "forward-looking information" under applicable securities laws (collectively, "forward-looking statements"), including statements with respect to future financial or operating performance. Such statements include "future-oriented financial information" or "financial outlook" with respect to prospective financial performance, financial position, EBITDA, cash flows and other financial metrics that are based on assumptions about future economic conditions and courses of action. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "believes", "expects", "expected", "budgeted", "forecasts" and "anticipates"." and include production outlook, operating schedules, production profiles, expansion and expansion plans, efficiency gains, production and cost guidance, capital expenditure outlook, exploration spend and other mine plans. Although Centamin believes that the expectations reflected in such forward-looking statements are reasonable, Centamin can give no assurance that such expectations will prove to be correct. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Centamin about future events and are therefore subject to known and unknown risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. In addition, there are a number of factors that could cause actual results, performance, achievements or developments to differ materially from those expressed or implied by such forward-looking statements; the risks and uncertainties associated with the ongoing impacts of COVID-19 or other pandemic, general business, economic, competitive, political and social uncertainties; the results of exploration activities and feasibility studies; assumptions in economic evaluations which prove to be inaccurate; currency fluctuations; changes in project parameters; future prices of gold and other metals; possible variations of ore grade or recovery rates; accidents, labour disputes and other risks of the mining industry; climatic conditions; political instability; decisions and regulatory changes enacted by governmental authorities; delays in obtaining approvals or financing or completing development or construction activities; and discovery of archaeological ruins. Financial outlook and future-ordinated financial information contained in this news release is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available. Readers are cautioned that any such financial outlook or future-ordinated financial information contained or referenced herein may not be appropriate and should not be used for purposes other than those for which it is disclosed herein. The Company and its management believe that the prospective financial information has been prepared on a reasonable basis, reflecting management's best estimates and judgments at the date hereof, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information or statements, particularly in light of the current economic climate and the significant volatility, uncertainty and disruption caused by the outbreak of COVID-19. Forward-looking statements contained herein are made as of the date of this announcement and the Company disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Accordingly, readers should not place undue reliance on forward-looking statements.
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