[miningmx.com] — ASX-listed explorer Liuri Gold (Liuri) is taking legal action against the Zambian government after its mining licence for the Luiri Hill gold project was cancelled.
Liuri MD Mike Sperinck told the Africa Down Under conference being held in Perth, Western Australia that the company had lodged its appeal to the Zambian High Court on August 27.
This was after an appeal to the Zambian minister of mines against the cancellation was turned down.
Sperinck said the licence had been cancelled on the grounds that the company had not started mining.
He pointed out the terms of the mining licence awarded in 2003 did not specify a time line or any scheduled dates by which Luiri had to start production.
That was because of the undeveloped state of the project when Luiri took it over.
Sperinck told delegates: “The area had last been mined in 2000. All the prior data gathered had been lost and there was no defined resource.
“The Mines Ministry was keen for us to take it over, but that meant we had to start from scratch. We had to carry out a drilling programme, define a resource and carry out feasibility work.
“On that basis we have raised and spent $9m on the project since 2004.
“In May 2010 we received a letter notifying us that we were in default, because of our alleged failure to start mining according to the terms of the mining licence.
“Our legal guys have very strong opinions supporting Luiri’s standpoint on this. We are confident of our legal position and we have also applied for a stay on the property, which prevents it being given to a third party while the legal processes are under way.
“At the same time we are carrying out a lobbying process with the Zambian government in parallel with the legal action.’
Sperinck said it would preferable to settle the dispute through negotiation because the legal process could take two years to complete, during which nothing could happen on the property.
In reply to questions from the floor, Sperinck confirmed that a number of mining companies in Zambia had recently received similar letters of expropriation from the government.
“I don’t want to provide the names, but some of these companies have managed to resolve their issues with the government.’
Asked if there was another mining company after the Luiri permit, he replied: “There is speculation about another party, but I am not prepared to get into that.’
