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Antofagasta JV With Barrick Gold Awarded $5.84 Bln In Damages Against Pakistan

Miner Antofagasta Plc. (ANFGY.PK,ANTO.L) announced Monday that an international arbitration tribunal of the World Bank's International Centre for Settlement of Investment Disputes or ICSID has awarded $5.84 billion in damages to Tethyan Copper Co. Pty Limited.

The ruling comes after more than seven years of arbitration claims filed against the Islamic Republic of Pakistan following the unlawful denial of a mining lease for the Reko Diq project in Pakistan in 2011.

Tethyan Copper is a joint venture held equally by Antofagasta and Barrick Gold Corp.

The company said the damages include compensation of $4.087 billion by reference to the fair market value of the Reko Diq project at the time of the mining lease denial, and interest until the date of the award of $1.753 billion.

The Tribunal also awarded Tethyan Copper just under $62 million in costs incurred in enforcing its rights.

William Hayes, Tethyan Copper Chairman, said, "We remain willing to discuss the potential for a negotiated settlement with Pakistan and will continue to protect our commercial interests and legal rights until the conclusion of this dispute."

Antofagasta said the award is binding on the parties. Under the ICSID Convention, there are limited grounds for challenging the award. The company does not expect to recognize the proceeds in its financial statements until received.

Tethyan Copper had completed a feasibility study before the denial of the mining lease application. The study showed that Reko Diq was one of the world's largest undeveloped copper and gold deposits, and had a potential mine life of over 50 years and an estimated initial capital investment of over $3 billion.

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