Dominican Republic gets 51%; Barrick Gold Corp. 49%
Santo Domingo.- After months of talks, protests and proposals, Dominican Republic and Barrick Gold Corp. on Wednesday reached a new agreement on the contract for the mine at Pueblo Viejo, Cotuí (northeast).
In a press conference after a meeting of several hours between senior officials and Barrick Gold executives in the National Palace, the government announced the pact to amend the contract, to be submitted to Congress as soon as possible.
“The objective of this review was to achieve a more balanced agreement for both parties and more in line with the Dominican reality, so we will sign a memorandum of understanding between the parties,” said Presidency chief of staff Gustavo Montalvo.
Among other points, the agreement will raise Government revenue by more than US$1.5 billion over the project’s duration, in addition to the US$10.0 billion projected in March 2013, and raises the profit split from 37.1% to 51.3 % for the country, and lowers Barrick’s from 62.9% to 48.7%
According to the document read by Montalvo, the projected tax revenue is US$11.6 billion, of which Pueblo Viejo will provide US$2.2 billion during the 2013-2016 period, subject to a gold price of US$1,600 per ounce. “The parties agreed to eliminate the 10% internal rate of return for the tax on the stake of net income to take effect.”
The agreement eliminates Barrick’s privilege of starting payments to the State when the investment of capital is completed, for which tax payment tax would be immediate.
With the provisions, it will now take the Canadian miner until 2026 to recover its investment, and not bu 2016 as was stipulated.
Barrick Gold Pueblo Viejo CEO
For Barrick Gold Pueblo Viejo CEO Manuel Rocha the agreement is evidence of the miner’s commitment with Dominican Republic, from where he affirms will leave only if expelled. “We believe in the Dominican Republic ,we believe the democratically elected government here, what’s needed now is that we both do our part, it’s clear that Barrick Gold didn’t come just for a bit, we came to stay. We will work to stay unless we are expelled.”
Category: DR News |