This is not legal advice, and should not be used to frame your investing decisions. I do NOT have access to the full suite of documentation required to make an informed decision. This is purely for interest in the arbitration using public data. Do not trade on this information or rely on the contents of this post.
I predict a positive arbitration outcome, either on the estoppel found in the expropriation restriction thanks to the Danish Constitution, or alternatively to the rectification damages due to inducement of spend by the Government of Greenland over the past decade.
License:
"the licensee is entitled to be granted an exploitation licence under [the] Mineral Resources Act. The exploitation licence will be granted as indicated in sections... The exploitation licence will cover the same mineral resources as covered by the exploration licence...The exploitation licence will be granted for a period of 30 years from the signing by the Government of Greenland. [...]".
There is no question as to whether GGG has a right to be granted an exploitation license, the question at law is whether the restrictive Act binds against the transition from exploration to exploitation. Unfortunately for you guys, I'd say the Act does restrict the granting of an exploration license, as GGG have a right to a license, which is distinct from a right to transition an existing license. The fun legal issue is that the Act has NO application to the extent it is an expropriation of property rights protected under the Danish Constitution. The right to be granted an exploitation license is a property right. So there is a very real possibility of the Act not binding the project.(There is nothing stopping the Government playing foul down the line, which is why the lawyers are seeking an order for the exploitation license to be granted).Even if the expropriation bar is not made out, there are clear grounds for contractual inducement, breach of loyalty, breach of IL, breach of ECHR, unilateral frustration, all of which will allow damages. Damages are an art, and I do not have the docs required to assess. Damages likely capped at $90-130 million, minus any expenses that occurred prior to the date of inducement and those which should have been reasonably mitigated. I have ZERO information regarding the spend and timelines of inducement, so grain of salt. Could be $130m for costs to date, but could also include opportunity loss in the billions.
Possible outcomes of Arbitration (binding unless there is an administrative error):
1. Decision of Government stands, no damages (highly unlikely)
2. The Act applies to the license, but is estopped due to expropriation (likely)
3. The Act does apply to the License and there is no expropriation (possible, but I don't see how)
- If yes to (3), then
- Rectification, likely between $90-130 million AUD. GGG may also claim for loss of opportunity on top of that amount, but no clue how that works in Denmark (rectification almost guaranteed if exploitation is barred by the new legislation, however quantum is very hard to measure from arms length and is highly discretionary.
IMOP, the mine either proceeds to granting of an exploitation license, or GGG receive damages greater than the current market cap.
I'm more interested in whether they are successful in bringing the Crown as a second respondent into the arbitration, their grounds are... interesting,... to say the least.
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