Panthera Res. Company Research (PAT)

Panthera’s valuation has been enhanced following the recent filing of a damages claim relating to an alleged breach of India’s obligations under the Australia India Bilateral Investment Treaty (ABIT). The breach refers to the de-facto expropriation of Panthera’s Bhukia gold project in Rajasthan, northwestern India. Panthera is seeking damages of $1.58bn net of taxes from the Republic of India (ROI). Based on the Geological Survey of India’s (GSI) resource estimate of 7.2m oz Au, the implied valuation is $219/ oz. While this significantly exceeds our estimate of $104/oz based on an absolute valuation of $750m it is nevertheless entirely plausible vis-à-vis our sample of mid-tier gold miners. The case against the ROI depends on the arbitral panel’s acceptance of the argument that Bhukia would have evolved as a world class mine without moves by the GOR preventing Panthera from obtaining its right to a Prospecting Licence and Mining Lease. A legislative change in 2021 removed this right but equitable and fair compensation is required under the ABIT.