The Predictive Discovery Ltd (ASX: PDI) share price has returned from its trading halt and is crashing lower.
At the time of writing, the Guinea-based gold explorer's shares are down 34% to 15.5 cents.
Why is the Predictive Discovery share price down 34%?
Investors have been selling down the Predictive Discovery share price this morning following the release of an update on its Bankan Project in Guinea.
According to the release, the company has become aware of a pending media report questioning the legality for Predictive Discovery to establish mining operations on part of the area covered under the Bankan Project.
The release notes that the Bankan Project comprises the Kaninko, Saman, Bokoro and Argo Exploration Permits. Management highlights that these are in good standing and give the company rights to undertake exploration activities as per the Mining Act.
The Company has informed the media outlet that its exploration activities are compliant with the Mining Act and that the Guinean authorities, in particular the Ministry of Mines and Geology and the Ministry of Environment, support its activities.
However, what appears to have spooked investors is that the two known Bankan deposits and some other parts of the Kaninko and Saman permits are located within the Outer Buffer Zone of the Upper Niger National Park.
The Outer Buffer Zone of the Upper Niger National Park is a protected area where the mining of mineral deposits is not permitted.
Though, it is worth noting that there are precedents in Guinea for Mining Permits to be granted within highly environmentally sensitive areas. It also stressed that it has been operating on the area under duly and validly issued Exploration Permits, in compliance with its obligations under the Mining Act and the terms of its Exploration Permits.
Management revealed that it has engaged with the Ministries of Mines and Environment.
This is regarding the overlap and the possible solutions that can be implemented to allow it to produce gold from the Bankan deposits while ensuring that the highest environmental safeguards are put in place to mitigate the impact of its activities on the protection objectives.
Predictive Discovery's Managing Director, Paul Roberts, commented: "We have built strong relationships with the Guinean authorities, in particular the Ministry of Mines and Geology as well as the Ministry of Environment, who have been supportive of the Bankan Gold Project since the outset, and we look forward to finding a mutually satisfactory solution that will allow the benefits of our gold discoveries to be realised in many forms by the community and our shareholders."
"We will take an ESG-led approach to all our activities within Guinea and believe that our social and environmental practices are critical to the long-term success of our Bankan Gold Project as they will deliver important and tangible benefits for the local community, while assisting the Government to improve its conservation efforts in the region," he added.