Sarama Resources has formally filed a US$242 million damages claim against Burkina Faso following the expropriation of its Tankoro 2 Exploration Permit, marking a pivotal step in its international arbitration process.
- US$242 million damages claim filed with ICSID
- Expropriation of Tankoro 2 Exploration Permit in Burkina Faso
- Non-recourse litigation funding secured for arbitration costs
- Experienced international law firm Boies Schiller Flexner engaged
- Next procedural steps scheduled for early 2026
Background to the Dispute
Sarama Resources Ltd., a Canadian gold exploration company, has escalated its legal battle against the Government of Burkina Faso by filing a detailed Memorial with the International Centre for Settlement of Investment Disputes (ICSID). The claim seeks US$242 million in damages plus interest, arising from the government’s retroactive rejection and expropriation of Sarama’s Tankoro 2 Exploration Permit. This permit was central to the Sanutura Project, a promising gold development in the Houndé Greenstone Belt, which hosts a multi-million-ounce gold resource.
The expropriation, announced in August 2023, halted all project activities just as Sarama was nearing completion of a Preliminary Economic Assessment for the mine. Sarama contends the permit’s cancellation was unlawful and is pursuing compensation under protections afforded by the Canada-Burkina Faso Bilateral Investment Treaty.
Progress in Arbitration Proceedings
The filing of the Memorial on 31 October 2025 marks a significant milestone in the arbitration process. This comprehensive document includes Sarama’s statement of case, witness testimonies, and expert reports, including an independent valuation by Accuracy London to substantiate the damages claim. The arbitration tribunal, composed of three experienced arbitrators, was constituted earlier this year, and the first procedural hearing took place in July 2025.
Burkina Faso is expected to submit its Counter-Memorial by the end of January 2026, followed by a case management conference in February to set the procedural timetable and hearing dates. The final hearing will be held in Washington D.C., where Sarama will present its case in full.
Financial and Legal Support
Sarama has secured a four-year, non-recourse litigation funding facility of US$4.4 million from Locke Capital II LLC to cover all legal and arbitration-related expenses. This arrangement limits financial risk to the project ownership structure, with repayment contingent on a successful outcome. The company’s legal representation is led by Boies Schiller Flexner (UK) LLP, a firm with a strong track record in investor-state arbitration within the natural resources sector.
Executive Chairman Andrew Dinning emphasised the company’s commitment to protecting shareholder value and achieving a fair resolution through internationally recognised mechanisms. The arbitration process, while complex and lengthy, represents Sarama’s best avenue to recover losses from what it describes as an unlawful government action.
Implications and Outlook
This arbitration highlights the geopolitical and regulatory risks inherent in mining investments in emerging markets. The outcome could set a precedent for other companies facing similar expropriations. Investors will be watching closely as the case progresses through its procedural stages in 2026, with the potential for a substantial financial award or settlement that could materially impact Sarama’s valuation and future operations.
Bottom Line?
Sarama’s arbitration filing signals a high-stakes legal showdown that could reshape investor confidence in Burkina Faso’s mining sector.
Questions in the middle?
- How will Burkina Faso respond in its Counter-Memorial due January 2026?
- What timeline and outcomes can investors realistically expect from the arbitration hearing?
- Could this case influence other mining companies’ strategies in politically sensitive jurisdictions?