Summary

Source: icsid.worldbank.org

TABLE OF CONTENTS

1. INTRODUCTION
2. FACTUAL BACKGROUND TO THE CLAIM
2.1 Sarama is a Canadian Company that Invested Substantially in Gold Exploration and Development Projects in Burkina Faso
2.2 Sarama's Development of the Sanutura Project and the Additional Projects
2.3 Burkina Faso's Hostile Acts Destroyed the Claimant's Investments in the Project and the Additional Projects
3. THE TRIBUNAL HAS JURISDICTION OVER THE DISPUTE AND THE CLAIMANT'S CLAIMS ARE ADMISSIBLE
3.1 The Tribunal has Jurisdiction Ratione Personae
3.2 The Tribunal Has Jurisdiction Ratione Materiae
3.3 The Tribunal Has Jurisdiction Ratione Temporis
3.4 The Tribunal Has Jurisdiction Ratione Voluntatis
3.5 The Claimant Satisfied All Requirements Set Out in Article 22 of the BIT
3.6 The Claimant Has Satisfied All Jurisdictional Requirements Under the ICSID Convention
4. BURKINA FASO BREACHED ITS OBLIGATIONS UNDER THE BIT
4.1 Burkina Faso Unlawfully Expropriated The Claimant's Protected Investments
4.2 Burkina Faso Failed to Accord The Claimant's Protected Investments Fair and Equitable Treatment
4.3 Burkina Faso Failed to Accord the Claimant and Its Protected Investments National and Most Favoured Nation Treatment
5. SUMMARY OF SARAMA'S DAMAGES
5.1 Fair Market Value Is the Appropriate Standard of Compesation under the BIT
5.2 Burkina Faso Owes Sarama Substantial Damages for Its Breaches of the BIT Under Both the MEE and Market Approaches
5.3 Sarama Is Entitled to Compound Pre- and Post-Award Interest on Amounts Awarded
5.4 Sarama Is Also Entitled to Its Costs and Fees Incurred in Connection with the Arbitration
6. REQUEST FOR RELIEF

1. INTRODUCTION

1. Sarama Resources Ltd ("Sarama" or the "Claimant") submits this Memorial in support of its claims against the People's Republic of Burkina Faso ("Burkina Faso" or the "Respondent") under the Agreement between the Government of Canada and the Government of Burkina Faso for the Promotion and Protection of Investments (the "BIT"),1 and in accordance with Rule 30 of the ICSID Arbitration Rules and the procedural calendar established by the Tribunal.2

2. This dispute arises out of Burkina Faso's unvarnished expropriation of the Claimant's marquee mining asset, inevitably destroying the value of Sarama's other projects in the country. Burkina Faso thereby breached the BIT in relation to the Claimant's protected investments in Burkina Faso. The Claimant made those investments in the Sanutura gold project (the "Sanutura Project" or the "Project") located in the prolific Houndé Greenstone Belt (the "Houndé Greenstone Belt"), a highly prospective gold belt in south-west Burkina Faso, and in the related Koumandara and Karankasso Projects (together, the "Additional Projects").

3. A team of experienced mining and financial professionals incorporated Sarama in Vancouver, Canada in 2010. They focussed their expertise on Burkina Faso because of its promising but underexploited geology and its attractive, transparent regulatory environment. After closely studying the geography and permitting landscape, the company acquired an exploration permit in southwest Burkina Faso (the "Tankoro Permit"), which was already home to an artisanal mining operation. Over the ensuing decade, Sarama went to lengths to establish an industrial- scale gold mine and to progress the Project toward development. It conducted a series of increasingly successful drilling campaigns comprising tens of thousands of metres, which yielded a deep understanding of a major orebody with great promise. Sarama's efforts eventually revealed a mineral resource of approximately 3 million tons of gold, which would become the focal point of the Sanutura Project.

4. Inspired by the promise of the Tankoro Permit, Sarama expanded its operations in the region.

In December 2016, Sarama acquired an exploration permit covering the nearby Bondi Deposit, a smaller but gold-rich resource located 35 kilometres of trucking distance to the northeast, as well as the two Additional Projects located to the west.

5. Sarama devised an accelerated, multi-stage approach to mining the underlying deposits. It planned a modular processing facility adjacent to its flagship Tankoro Deposit, which would serve as a shared hub for processing ore mined from the other areas of the Project. For instance, although the Bondi Deposit was too small to mine economically on its own, it would contribute high-quality feed to the central processing facility. That facility would expand to accommodate increasing quantities of ore extracted from Bondi and other deposits over their respective mine lives.

6. In late 2021, as the expiration date of its Tankoro Permit approached, Sarama lodged a new permit application with the Ministry. The Ministry approved the application as a matter of routine, and Sarama paid the requisite fee, thereby becoming the legal owner of the Tankoro 2 Permit.

7. By 2022, with its new permit in hand, Sarama began to prepare a preliminary economic assessment ("PEA") and was in advanced negotiations with prefabricated plant manufacturers and specialist mining lenders. This work did not go unnoticed. Sarama gained international recognition for the quality and scale of the mineral resource it had uncovered and for its novel approach to mine development. For instance, at the 2022 Mining Indaba Conference in Cape Town, South Africa - arguably the world's largest mining conference - an independent panel of mine finance professionals awarded Sarama the "Investment Battlefield" award, which aims to recognise the year's most outstanding junior mining company.

8. That recognition did little to insulate Sarama and its carefully defined investment strategy from the political upheaval and resultant resource nationalism that followed in Burkina Faso. In September 2022, Capitaine Ibrahim Traoré, a fervently anti-Western 34-year-old military strongman, seized power in a coup d'état. In a campaign to rid Burkina Faso of "economic imperialism", Capitaine Traoré targeted investments in the gold mining sector by Western investors, including Sarama, whilst ingratiating himself with Vladimir Putin's Russia and its Wagner Group mercenaries.

9. Simon-Pierre Boussim, Capitaine Traoré's hand-picked Minister of Mines, soon began to impose irregular demands upon Sarama for bizarre diplomatic assistance and extraordinary payments as unlawful preconditions for issuing the arrêté -- i.e., the formal title paperwork -- for the Tankoro 2 Permit. In 2023, in one of a series of strange shifts in regulatory position, Minister Boussim informed Sarama that the Tankoro Deposit had allegedly become a "State- owned asset", even though the Ministry had validly granted the permit in November 2021. The Minister offered to issue the arrêté only if Sarama could satisfy two unrelated and illegitimate demands: first, to secure the reversal of a Canadian ban on exporting drone software technology; and subsequently, to make an arbitrary payment to the Ministry of 6 billion CFA francs (approximately US$ 10.68 million) that had no basis in Burkinabe law.

10. As a junior miner, Sarama was patently in no position to influence the Canadian government's foreign policy and defence decisions. Nor could it comply with the Minister's exorbitant payment demand as all of its cash was dedicated to exploration and mine development efforts.

Although Sarama attempted to negotiate a mutually satisfactory resolution, it ultimately could not accede to Burkina Faso's illegal demands.

11. On 25 August 2023, the Ministry retaliated for Sarama's inability to meet its ever-changing demands by revoking retroactively the Tankoro 2 Permit. The Ministry did not attempt to hide its retaliatory intent. The letter offered no pretext, no reasoning or even any legal basis for the measure. Indeed, its sole justification was Sarama's "inability to pay" the arbitrary and excessive sum that the Ministry had demanded. As Minister Boussim's letter made clear, the Ministry's demands amounted to little more than a naked cash grab.

12. The Minister quickly capitalised on the unlawful revocation of Sarama's permit. In September 2023, speaking at a mining conference in Perth, Australia, he advertised the Tankoro 2 Permit as being open "for sale". Not long after, the Ministry sold the permit and the property to a Burkinabe company beneficially owned by a political ally of Capitaine Traoré. The Ministry thereby ensured the Tankoro 2 Permit was permanently beyond Sarama's grasp. These discriminatory actions had no basis in Burkinabe law and were antithetical to the requirements of due process and transparency under international law.

13. The Tankoro 2 Permit had been the centrepiece of Sarama's investments in Burkina Faso. As such, its revocation had devastating and inevitable consequences for all of Sarama's projects. Indeed, Burkina Faso's unlawful revocation of the Tankoro 2 Permit destroyed not just Sarama's investment in developing the Tankoro Deposit, but the value of the entire Sanutura Project, including the Bondi Deposit. Because the Bondi Deposit was too small to mine economically on its own, divorced from the Tankoro Deposit it lost substantially all of its value. It became a stranded asset marketable only at a distressed price.

14. Burkina Faso's measures likewise denied Sarama the ability to utilise the Sanutura Project to generate the cash necessary to develop the Additional Projects. What is more, those measures sapped the confidence of potential investors who could otherwise have provided the funds to do so. In the absence of funding, Sarama's exploration work at the Koumandara Project ground to a halt, erasing the project's potential value. This left Sarama with only one option: to realise the properties de minimis residual value through a distressed asset sale. Sarama's interest in the Karankasso Project is doomed to meet a similar fate. Without the ability to meet minimum expenditures Sarama's interests in that venture will gradually dilute until it approaches zero.

15. By virtue of its retroactive and unlawful revocation of the Tankoro 2 Permit, Burkina Faso breached its obligations under the BIT, including its obligation not to expropriate Sarama's investments under Article 10 of the BIT and its obligations to accord Sarama's investments fair and equitable treatment, national treatment, and most favoured nation treatment under Articles 6, 4, and 5, respectively.

16. Sarama is entitled to full compensation for Burkina Faso's treaty breaches. Under the standard of compensation set forth in Article 10(2) of the BIT, Burkina Faso must compensate Sarama for the fair market value of its lost investments.

17. Sarama provides the factual background to its claims in section 2. The Tribunal has jurisdiction over the dispute and Sarama's claims are admissible, as demonstrated in section 3. Burkina Faso's breaches of its obligations under the BIT are set out in section 4. Sarama's case on damages and its request for relief are set out in sections 5 and 6, respectively.

18. This Memorial is supported by the following witness statements:

(a) Andrew Robert Mune Dinning, Executive Chairman and Chief Executive Officer of the Claimant.3

(b) Paul Schmiede, Vice President of Corporate Development of the Claimant.4

(c) Jack Hamilton, Vice President of Exploration of the Claimant.5

19. In addition, the Memorial is supported by the expert report of Edmond Richards and Simon Procopiou, respectively a partner and a director at Accuracy who specialise in the assessment of damages.6

20. This Memorial is accompanied by the Claimant's factual exhibits C-0074 to C-0381 and legal authorities CL-0005 to CL-0131, listed in the Claimant's Index of Factual Exhibits and Legal Authorities.

2. FACTUAL BACKGROUND TO THE CLAIM

21. Sarama is a Canadian company founded with a strategic focus on West Africa, and particularly on Burkina Faso - once an attractive jurisdiction for foreign investment. Sarama invested in gold exploration and development projects in Burkina Faso through locally incorporated subsidiaries (section 2.1).

22. Over the span of a decade, Sarama invested substantially in the Sanutura Project, which it advanced through to pre-development. After discovering the promising Tankoro Deposit, Sarama later acquired the nearby Bondi Deposit, laying the groundwork for a multi-deposit project which would process ore through a single, central facility. Sarama secured the required permits and approvals and commenced work on an accelerated development pathway. To that end, it actively advanced several workstreams towards the completion of a detailed Preliminary Economic Assessment ("PEA") that would allow it to skip the preparation of a Pre-Feasibility Study ("PFS") and move directly to a Definitive Feasibility Study ("DFS") and, ultimately, construction of the Project (section 2.2).

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6. REQUEST FOR RELIEF

488. For the reasons set forth in this Memorial, the Claimant respectfully requests the Tribunal to:

(a) DECLARE that Burkina Faso has breached its obligation not to expropriate the Claimant's investments under Article 10 of the BIT;

(b) DECLARE that Burkina Faso has breached its obligation to accord the Claimant's investments fair and equitable treatment under Article 6 of the BIT;

(c) DECLARE that Burkina Faso has breached its obligations to accord the Claimant's investments national treatment and most favoured nation treatment under Articles 4 and 5 of the BIT;

(d) ORDER Burkina Faso to pay compensation for the loss and damage sustained by the Claimant as a result of Burkina Faso's breaches of its obligations under the BIT, in the amount of US$ 242 million, to be updated to include any further losses the Claimant may incur;

(e) ORDER Burkina Faso to bear the costs of the arbitration and compensate the Claimant for all its costs and expenses incurred in relation to the present arbitration, including the fees and expenses of its counsel, witnesses and experts, reasonable funding fees, the fees and expenses of the Tribunal, and ICSID's other costs and fees;

(f) ORDER Burkina Faso to pay pre- and post-Award interest on all sums awarded at a rate of SOFR +6%, compounded annually;

(g) DECLARE that the Award is net of all Burkinabe taxes; and

(h) AWARD such other and further relief as the Tribunal deems appropriate.

489. The Claimant reserves its rights to further amend, develop, and quantify its claims and to present further arguments and evidence in the course of the arbitration, in accordance with the ICSID Convention and the ICSID Arbitration Rules.

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Footnotes omitted