04:36 PM EDT, 07/03/2024 (MT Newswires) -- Orla Mining ( ORLA ) said after trade Wednesday it filed a Request for Arbitration against the Government of Panama under the Canada-Panama Free Trade Agreement.

According to a statement, the Request for Arbitration asserts that measures taken by Panama in respect of the Cerro Quema Project constitute violations of Panama's legal obligations under the FTA and customary international law. The country in 2023 declined to extend mining concessions for the project and declared the area a reserve.

"The Cerro Quema Project is located on the Azuero Peninsula in the Los Santos Province of Southwestern Panama, about 45 km southwest of the city of Chitre. The project includes a pre-feasibility-stage, open-pit, heap leach gold project, a copper-gold sulphide resource, and various exploration targets. The company believes that the Cerro Quema Project could be an important social and economic contributor to Panama, creating employment and skills development opportunities and contributing tax, royalty, and other fiscal benefits to the host communities and governments," the company said .

Wednesday's statement noted a Notice of Intent to Arbitrate was filed with the Government of Panama under the FTA on March 28, 2024, which was intended to facilitate a 30-day consultation period to reach an amicable resolution to the company's claim. As no resolution was reached, the company said it has proceeded with filing the Request to Arbitrate.

Orla noted the arbitration will be facilitated and administered by the International Centre for Settlement of Investment Disputes (ICSID) in Washington, DC, under its Arbitration Rules. As part of the FTA requirements, the company has submitted an initial and preliminary estimate of damages claimed of no less than US$400 million, plus pre-award and post-award interest.

Although the company intends to vigorously pursue these legal remedies, the company said its preference is a constructive resolution with the Government of Panama that results in a positive outcome for all stakeholders.

Orla shares closed up $0.14 to $5.29 on the Toronto Stock Exchange.