TSX-V-listed Montero Mining and Exploration’s legal representatives in Tanzania have received $8-million in cash, the second instalment of the $27-million settlement between the company and the country in connection with Tanzania’s expropriation of Montero’s Wigu Hill rare earth element project, as announced last year.

The final instalment of $7-million is due to be paid on or before February 28.

The final net proceeds to be received by the company are not certain at this time as final legal costs and other expenses Montero incurred in connection with defence and settlement of the expropriation will be determined following receipt of the final instalment, the company points out.

After receipt of the final instalment, it is expected that Montero will finalise its analysis regarding the distribution of funds including any potential distribution to shareholders.

Also, Montero says it will retain funds to cover legal, taxation and administrative expenses, including potential costs for arbitral proceedings, or enforcement actions in the event of delays or nonpayment of the final instalment. The latter will now be the sole responsibility of Montero.

The company expects to announce an update on its distribution plans during the second quarter.

Montero president and CEO Dr Tony Harwood has welcomed the receipt of the second instalment.

Further, Montero and Tanzania jointly requested the arbitral tribunal to suspend the International Centre for Settlement of Investment Disputes (ICSID) arbitration proceedings after receiving the first settlement payment.

Upon receipt of the final instalment as scheduled, the parties expect to formally request the tribunal to discontinue the ICSID arbitration in its entirety.

The conclusion of the ICSID arbitration and payment of the remaining instalment is conditional on Tanzania’s compliance with the settlement agreement, Montero points out.

The agreement does not provide for any security for the benefit of Montero in case Tanzania would not pay any instalment, in which case Montero can either resume the ICSID arbitration or seek enforcement of the settlement agreement, it adds.