Pacific Rim speaks about its fight with El Salvador

Canadian mining company Pacific Rim, which is in a battle with the government of El Salvador to force the country to grant it gold mining permits, spoke publicly this week about its pending international arbitration under CAFTA:

On January 4, 2010, the [Government of El Salvador "GOES"] filed preliminary objections to PacRim's claims under CAFTA and El Salvador's Investment Law. Copies of the GOES's filing and PacRim's response to ICSID are available on Pacific Rim's website (www.pacrim-mining.com). Under CAFTA Article 10.20, the Tribunal is to rule on the objections on an expedited schedule, has set a hearing on the objections for May 31 and June 1, 2010, and is expected to issue a ruling by September 2010. PacRim believes that El Salvador's objections are not only completely without merit, but are also frivolous, and that GOES filed them purely as an attempt to stall the arbitration proceedings. PacRim fully expects that the Tribunal will reject the objections and proceed with the arbitration claim.

DIALOGUE WITH THE GOVERNMENT OF EL SALVADOR

The Company was discouraged to hear public comments made on January 13, 2010 by President Mauricio Funes in which he voiced environmental concerns for mining; comments which were, in the Company's opinion, groundless and ill-conceived. The Company had been encouraged by a series of meetings held in the fall of 2009 with the highest levels of President Funes' cabinet and leadership from the ruling FMLN party to discuss the environmental, technical, economic and social aspects of the proposed El Dorado mine. During all of these meetings, the Company was encouraged by the positive reactions to the technical and environmental aspects of the mine.

El Salvador has mining laws, investment laws and environmental laws in place. PacRim has complied with if not exceeded all of the requirements of these laws. The actions and inactions of the GOES over the past years have severely eroded not only Pacific Rim's market value, but also El Salvador's reputation as a place for foreign investment. Before El Salvador can hope to attract the future foreign investment sorely needed in this time of economic crises, the country must demonstrate that it is willing to protect and enforce the rights of existing foreign investors.