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Due to the sanctions imposed by the U.S. Department of Treasury Office of Foreign Asset Control (“OFAC”), a mining and a smelting company in Guatemala, Compañía Guatemalteca de Níquel (CGN) and Compania Procesadora de Niquel de Izabal SA (Pronico) are forced to temporarily suspend their day to day industrial operations. To maximize the prospects for being able to resume operations, the Subsidiaries launched an initiative for the partial voluntary termination of employment contracts. According to Guatemalan law, voluntary termination of employment contracts is possible with compensation in an amount equal to 4 or 5 salary payments. The remaining staff will work on ensuring effective control of environmental risks, safety, and preserving existing infrastructure. 


28 FEBRUARY 2023, El Estor, Guatemala. Since the end of last year, Solway’s subsidiaries CGN and PRONICO have been facing unforeseen difficulties caused by the sanctions imposed on the companies by the U.S. Department of Treasury OFAC decision of November 18, 2022, based on allegations of corruption and misinformation of alleged Russian ownership and connection to Mayaniquel.


Starting from the moment the sanctions were instituted, Solway Investment Group (SIG) has been extremely proactive, responsive, transparent, and forthcoming with the United States Government and the Guatemalan government. This includes: immediately terminating the two sanctioned employees, connecting with the United States Treasury OFAC and reaching out to the US State Department. Intending to minimize potentially severe consequences to the employees, business partners and people of Guatemala, Solway, and its lawyers in the US, have been working to have certain licences granted by OFAC for continuing operations and other short-term remedies in Guatemala in order to help alleviate the severity of the sanctions on the company and the people of Guatemala.


Solway Investment Group has gone further and launched an elaborate independent probe led by experienced and respected retired US government investigators into alleged wrongdoings reportedly committed by the companies or their former employees in Guatemala. The probe is winding down soon. It is anticipated that the results will be presented to the US government and the board of directors of Solway tending to make significant corrections and changes to the subsidiaries and how the business is managed and governed as part of a wider commitment to redress any corruption if it exists, and to implement procedures, systems and a culture of zero tolerance for corruption that aims to prevent and deter recurrence of such activity.


Through its lawyers in the US, Solway submitted an application to the US authorities OFAC in November 2022 for a temporary licence to get permission for certain vital business transactions to fulfil our obligations. Unfortunately, despite significant efforts, the period for obtaining this licence is delayed for reasons beyond Solway’s control. As a result, continuing operations becomes impossible under the circumstances where export licences of the companies are not renewed, and the companies are being choked from receiving revenue from production, shipping and sales.  With financial losses mounting and no relief from the sanctions in sight, Solway would have had no other choice than putting production into temporary care and maintenance mode and releasing most of the personnel.


In order to maximize the prospects for being able to resume operations in Guatemala someday soon, consistent with Guatemalan law, Solway’s Subsidiaries launched an initiative for the partial voluntary discontinuation of employment agreements. Every employee who agrees to a voluntary termination of work obligation is entitled to the compensation,in an amount equal to 4 or 5 salary payments,


As of today, almost 500 employees accepted the offer. Those who chose to stay with the companies will be engaged in the necessary activities related to complying with Guatemalan law during the operations halt, including minimizing and controlling environmental risks, protection of deposits with goods and materials, minor reparation work and preservation of the existing infrastructure.


We are thankful to all our employees, partners and many others for the faith, trust and support in these difficult times.We believe that with perseverance, integrity and hard work, we will be able to resume operations in due course and continue to be a thriving force for the local people and community.